Document:

EXHIBIT
No. 10 (b)

This document constitutes part of a prospectus
covering securities

that have been registered under
the Securities Act of 1933.

Constellation Energy Group,
Inc.

Amended and Restated Executive Long-Term Incentive Plan

(Plan)

1.            Purpose.  The
purpose of this Plan is to increase shareholder value by providing a long-term
incentive to reward officers and key employees of the Company and its
Subsidiaries, who are mainly responsible for the continued growth, development,
and financial success of the Company and its Subsidiaries, and for the
continued profitable performance of the Company and its Subsidiaries.  The Plan is also designed to permit the
Company and its Subsidiaries to attract and retain talented and motivated
directors, officers and key employees and to increase their ownership of
Company common stock.  The Plan also
provides the ability to award long-term incentives that qualify for federal
income tax deduction.

2.            Definitions.  All
singular terms defined in this Plan will include the plural and vice versa.  As used herein, the following terms will have
the meaning specified below:

“Adjusted EBIT” means EBIT,
subject to, and/or after giving effect to, any adjustments applicable pursuant
to Section 9A(iv) at the time Business Criteria and Performance
Target(s) are established for any Year or Years.

“Adjusted EPS” means EPS,
subject to, and/or after giving effect to, any adjustments applicable pursuant
to Section 9A(iv) at the time Business Criteria and Performance
Target(s) are established for any Year or Years.

“Adjusted Net Income” means
Net Income, subject to, and/or after giving effect to, any adjustments
applicable pursuant to Section 9A(iv) at the time Business Criteria
and Performance Target(s) are established for any Year or Years.

“Adjusted Return on Assets”
means Return on Assets subject to, and/or after giving effect to, any
adjustments applicable pursuant to Section 9A(iv) at the time
Business Criteria and Performance Target(s) are established for any Year or
Years.

“Adjusted Return on Equity”
means Return on Equity, subject to, and/or after giving effect to, any
adjustments applicable pursuant to Section 9A(iv) at the time
Business Criteria and Performance Target(s) are established for any Year or
Years.

“Award” means individually
or collectively, Restricted Stock, Restricted Stock Units, Options, Performance
Units, Stock Appreciation Rights, Dividend Equivalents, or Equity granted under
this Plan.

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

“Book Value” means the book
value of a share of Stock determined in accordance with the Company’s regular
accounting practices as of the last business 

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day
of the month immediately preceding the month in which a Stock Appreciation
Right is exercised as provided in Section 10.

“Business Criteria” means
any one or any combination of Net Income, Adjusted Net Income, Return on
Equity, Adjusted Return on Equity, Return on Assets, Adjusted Return on Assets,
Total Shareholder Return, Stock Fair Market Value, EBIT, Adjusted EBIT, EPS or
Adjusted EPS.

“Code” means the Internal
Revenue Code of 1986, as amended. Reference in the Plan to any section of the
Code will be deemed to include any amendments or successor provisions to such
section and any regulations promulgated thereunder.

“Committee” means the
Committee on Management of the Board; provided, however, that if such Committee
fails to satisfy the disinterested administration provisions of
Section 16b-3 of the 1934 Act or the outside director provisions of
Section 162(m)(4)(C) of the Code, “Committee” shall mean a committee of
directors of the Company who satisfy the requirements of such Sections.

“Company” means
Constellation Energy Group, Inc., a Maryland corporation, or its
successor, including any “New Company” as provided in Section 15I.

“Covered Award” means any
Award granted under the Plan on or after December 18, 2005.

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

“Date of Retirement” means
the date of Retirement.

“Disability” means the
determination that a Participant is “disabled” under the Company disability
plan in effect at that time.

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

“EBIT” for any Year means
the consolidated earnings before income taxes of the Company, as reported in
the consolidated financial statements of the Company for the Year.

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

“EPS” for any Year means
diluted earnings per share of the Company, as reported in the Company’s
consolidated financial statements for the Year.

“Equity” means an Award
granted under Section 12.

“Excluded Transactions” has
the meaning set forth in Section 13.

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“Exercise Period” means the
period or periods during which a Stock Appreciation Right is exercisable as
described in Section 10.

“Fair Market Value” means
the average of the highest and lowest price at which the Stock was sold regular
way on the New York Stock Exchange-Composite Transactions on a specified date; provided, however, that notwithstanding
the foregoing, solely for purposes of determining the Option price per share of
Stock under Section 8C for Option grants made after October 19, 2006, “Fair Market
Value” means the price at which the Stock was last sold on the New York Stock
Exchange-Composite Transactions on the Date of Grant.

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

“Net Income” for any Year
means the consolidated net income of the Company, as reported in the
consolidated financial statements of the Company for the Year.

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

“Option” or “Stock Option”
means either a nonqualified stock option or an incentive stock option granted
under Section 8.

“Option Period” or “Option
Periods” means the period or periods during which an Option is exercisable as
described in Section 8.

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

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

“Performance-Based” means
that in determining the amount of a Restricted Stock or Restricted Stock Unit
Award payout, the Committee will take into account the Performance Targets.

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

“Performance Target(s)”
means the specific objective goal or goals that are timely set in writing by
the Committee pursuant to Section 9A(ii) for each Participant for the
applicable Performance Period in respect of any one or more of the Business
Criteria.

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

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

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

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

“Retirement” means
retirement on or after the “Early Retirement Date” (as such term is defined in
the Pension Plan or a Subsidiary’s retirement or pension plan).

“Return on Assets” means Net
Income divided by the average of the total assets of the Company at the end of
the four fiscal quarters of the Year, as reported by the Company in its
consolidated financial statements.

“Return on Equity” means the
Net Income divided by the average of the common shareholders equity of the
Company at the end of each of the four fiscal quarters of the Year, as reported
by the Company in its consolidated financial statements.

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

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

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

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

“Termination” means
resignation or discharge from employment with the Company or any of its
Subsidiaries except in the event of death, Disability, or Retirement.

“Total Shareholder Return”
means the sum of the change in the Fair Market Value of the Stock plus the
value of reinvested dividends and cash equivalents, over the Performance
Period.

“Year” means a fiscal year
of the Company commencing on or after January 1, 2002 that constitutes all
or part of the applicable Performance Period.

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3.             Effective Date, Duration and Stockholder Approval.

A.           Effective Date
and Stockholder Approval.  Subject to the approval of the Plan by
a majority of the outstanding shares of Stock voted at the 2002 Annual Meeting
of Stockholders, the Plan will be effective as of January 1, 2002. The
Plan was most recently amended and restated effective as of October 19,
2006.

B.            Period for
Grants of Awards.  Awards may be made as provided herein
for a period of 10 years after January 1, 2002.

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

4.              Plan Administration.  The
Committee is the Plan Administrator and has sole authority (except as specified
otherwise herein) to determine all questions of interpretation and application
of the Plan, or of the terms and conditions pursuant to which Awards are
granted, exercised or forfeited under the Plan provisions, and, in general, to
make all determinations advisable for the administration of the Plan to achieve
its stated purpose. Without limiting the generality of the foregoing, the Plan
Administrator may modify, amend, extend or renew outstanding Awards, or accept
the surrender of outstanding Awards and substitute new Awards (provided,
however, that, except as provided in Section 15H of the Plan, any
modification that would materially adversely affect any outstanding Award shall
not be made without the consent of the Participant, and provided, further, that
no modification, amendment or substitution that results in repricing a Stock
Option to a lower exercise price, other than to reflect an adjustment made
pursuant to Section 15H, shall be made without prior stockholder approval).

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

The Committee may delegate
its authority under the Plan with respect to Participants who are not directors
or executive officers.

5.             Eligibility.  Each
officer, key employee or director of the Company and its Subsidiaries may be
designated by the Committee as a Participant, from time to time, with respect
to one or more Awards. No officer, employee or director of the Company or its
Subsidiaries shall have any right to be granted an Award under this Plan. The
Plan Administrator may also grant Awards to individuals in connection with
hiring (as an officer, key employee or director), retention or otherwise, prior
to the date the individual first performs services for the Company or a
Subsidiary; provided, 

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however, that such Awards shall not become vested or exercisable prior
to the date the individual first commences performance of such services.

6.             Grant of Awards and Limitation of Number of
Shares Awarded.  The Committee may, from time to time,
grant Awards to one or more Eligible Persons, provided that subject to any
adjustment pursuant to Section 15H, the aggregate number of shares of
Stock subject to Awards that may be delivered under this Plan may not exceed
eight million (8,000,000) shares. Shares delivered by the Company under the Plan
may be authorized and unissued Stock, Stock held in the treasury of the
Company, or Stock purchased on the open market (including private purchases) in
accordance with applicable securities laws.

Any shares of Stock covered
by an Award (or portion of an Award) granted under the Plan that is forfeited
or canceled, expires or is settled in cash, including the settlement of tax
withholding obligations using shares, shall be deemed not to have been
delivered for purposes of determining the maximum number of shares available
for delivery under the Plan. Likewise, if any Option granted under the Plan is
exercised by tendering shares of Stock to the Company as full or partial
payment for such exercise under the Plan, only the number of shares issued net
of the shares tendered shall be deemed delivered for purposes of determining
the maximum number of shares available for delivery under the Plan.

The maximum number of shares
of Stock that may be issued in conjunction with Service-Based Restricted Stock
or Restricted Stock Unit Awards under Section 7 of the Plan,
Performance-Based Restricted Stock or Restricted Stock Unit or Performance Unit
Awards under Section 9 of the Plan and Equity Awards under Section 12
of the Plan shall in the aggregate be eight hundred thousand (800,000). The
maximum number of shares of Stock subject to Awards of any combination that may
be granted during any calendar year under the Plan to any one person is two
million (2,000,000); provided, however, that to the extent the maximum permissible
award is not made in a year, such amount may be carried over to subsequent
years. Such per-individual limit shall not be adjusted to effect a restoration
of shares of Stock with respect to which the related Award is terminated,
surrendered or canceled.

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

7.             Service-Based Restricted Stock and Restricted Stock Unit Awards.

A.           Grants of
Service-Based Restricted
Shares or Units.  One or more shares of Restricted Stock
or Restricted Stock Units may be granted to any Eligible Person.  The Service-Based Restricted Stock will be
issued or Restricted Stock Unit granted to the Participant on the Date of Grant
without the payment of consideration by the Participant.  The Service-Based Restricted Stock will be
issued or Restricted 

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Stock Unit granted in the name of the Participant and will bear a restrictive
legend prohibiting sale, transfer, pledge or hypothecation of the Service-Based
Restricted Stock or Restricted Stock Unit until the expiration of the
restriction period.

The Committee may also
impose such other restrictions and conditions on the Service-Based Restricted
Stock or Restricted Stock Unit as it deems appropriate.

Upon issuance to the
Participant of the Service-Based Restricted Stock the Participant will have the
right to vote the Service-Based Restricted Stock. Upon issuance to the Participant
of the Restricted Stock or grant of the Restricted Stock Unit and subject to
the Committee’s discretion, the Participant will have the right to receive the
cash dividends (or Dividend Equivalents as provided in Section 11)
distributable with respect to such shares or units, with such dividends or
Dividend Equivalents treated as compensation to the Participant. The Committee,
in its sole discretion, may direct the accumulation and payment of
distributable dividends to the Participant at such times, and in such form and
manner, as determined by the Committee.

B.            Restriction
Period.  At the time a Service-Based Restricted
Stock or Restricted Stock Unit Award is granted, the Committee will establish a
restriction period applicable to such Award which will be not less than one
year and not more than ten years. Each Restricted Stock or Restricted Stock
Unit Award may have a different restriction period, at the discretion of the
Committee.

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

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

Upon completion of the
restriction period, all Award restrictions will expire and new certificates
representing the Award will be issued (the payout) without the restrictive
legend described in Section 7A.

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D.           Waiver of
Section 83(b) Election.  Unless otherwise directed by the
Committee, as a condition of receiving an Award of Service-Based Restricted
Stock, a Participant must waive in writing the right to make an election under
Section 83(b) of the Code to report the value of the Service-Based
Restricted Stock as income on the Date of Grant.

8.            Stock Options.

A.           Grants of
Options.  One or more Options may be granted to
any Eligible Person on the Date of Grant without the payment of consideration
by the Participant.

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

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

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

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

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F.             Lapse of Option.  An
Option will lapse upon the earlier of: (i) 10 years from the Date of
Grant, or (ii) at the expiration of the Option Period set by the grant. If
the Participant ceases employment (or ceases Board membership in the case of a
director) within the Option Period and prior to the lapse of the Option, the
Option will lapse as follows: (a) Termination–any unvested Option will
lapse on the effective date of the Termination and any vested Option will lapse
90 days after the effective date of the Termination; or (b) Retirement,
Disability or death—any unvested Option will lapse on the effective date of the
Retirement, Disability or death and any vested Option will lapse on the earlier
of 60 months after the effective date of the Retirement, Disability or
death or at the expiration of the Option Period set by the Grant; provided,
however, that the Committee may modify the above if it determines in its sole
discretion that special circumstances warrant such modification.

G.            Individual
Limitation.  In the case of an Incentive Stock
Option, the aggregate Fair Market Value of the Stock for which Incentive Stock
Options (whether under this Plan or another arrangement) in any calendar year
are first exercisable will not exceed $100,000 with respect to such calendar
year (or such other individual limit as may be in effect under the Code on the
Date of Grant) plus any unused portion of such limit as the Code may permit to
be carried over.

9.            Performance-Based Restricted Stock or Restricted Stock
Units/Performance Units.

A.           Provision for Awards.

(i)        General.  For Awards under this
Section 9, the Committee will establish (a) Performance Target(s)
relative to the applicable Business Criteria, (b) the applicable
Performance Period and (c) the applicable number of shares of
Performance-Based Restricted Stock, Performance-Based Restricted Stock Units or
Performance Units that are the subject of the Award. The applicable Performance
Period and Performance Target(s) shall be determined by the Committee
consistent with the terms of the Plan and Section 162(m) of the Code.
Notwithstanding the fact that the Performance Target(s) have been attained, the
Committee may pay an Award under this Section 9 of less than the amount
determined by the formula or standard established pursuant to Section 9A(ii) or
may pay no Award at all.

(ii)       Selection of Performance Target(s).  The specific Performance
Target(s) with respect to the Business Criteria must be established by the
Committee in advance of the deadlines applicable under Section 162(m) of
the Code and while the performance relating to the Performance Target(s)
remains substantially uncertain within the meaning of Section 162(m) of
the Code. The Performance Target(s) with respect to any Performance Period may
be established on a cumulative basis or in the alternative, and may be
established on a stand-alone basis with respect to the Company or on a relative
basis with respect to any peer companies or index selected by the Committee. At
the time the Performance Target(s) are selected, the Committee shall provide,
in terms of an objective formula or standard for each Participant, the method
of 

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computing the specific amount that will represent the maximum amount of
Award payable to the Participant if the Performance Target(s) are attained. The
objective formula or standard shall preclude the use of discretion to increase
the amount of any Award earned pursuant to the terms of the Award.

(iii)      Effect of Mid-Year Commencement of Service.  If services as an executive
officer or director commence after the adoption of the Plan and the Performance
Target(s) are established for a Performance Period, the Committee may grant an
Award that is proportionately adjusted based on the period of actual service
during the Year, and the amount of any Award paid to such person shall not
exceed that proportionate amount of the applicable maximum individual Award
under Section 6.

(iv)      Adjustments.  To preserve the intended
incentives and benefits of an Award based on Adjusted EPS, Adjusted Net Income,
Adjusted Return on Assets or Adjusted Return on Equity, the Committee may
determine at the time the Performance Targets are established that certain
adjustments shall apply to the objective formula or standard with respect to
the applicable Performance Target to take into account, in whole or in part, in any manner specified
by the Committee, any one or more of the following with respect to the
Performance Period: (i) the gain, loss, income or expense resulting from
changes in accounting principles that become effective during the Performance
Period; (ii) the gain, loss, income or expense reported publicly by the
Company with respect to the Performance Period that are extraordinary or
unusual in nature or infrequent in occurrence, excluding gains or losses on the
early extinguishment of debt; (iii) the gains or losses resulting from,
and the direct expenses incurred in connection with, the disposition of a
business, in whole or in part or the sale of investments or non-core assets;
(iv) gain or loss from all or certain claims and/or litigation and all or
certain insurance recoveries relating to claims or litigation; (v) the
impact of impairment of tangible or intangible assets; (vi) the impact of
restructuring or business recharacterization activities, including but not
limited to reductions in force, that are reported publicly by the Company; and
(vii) the impact of investments or acquisitions made during the year or,
to the extent provided by the Committee, any prior year. Each of the
adjustments described in this Section 9A(iv) may relate to the
Company as a whole or any part of the Company’s business or operations, as
determined by the Committee at the time the Performance Targets are
established. The adjustments are to be determined in accordance with generally
accepted accounting principles and standards, unless another objective method
of measurement is designated by the Committee. In addition to the foregoing,
the Committee shall adjust any Business Criteria, Performance Targets or other
features of an Award that relate to or are wholly or partially based on the
number of, or the value of, any stock of the Company, to reflect any stock
dividend or split, recapitalization, combination or exchange of shares or other
similar changes in such stock.

(v)       Committee Discretion to Determine Award.  The Committee has the sole
discretion to determine the standard or formula
pursuant to which each 

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Participant’s Award shall be calculated, whether all or any portion of
the amount so calculated will be paid, and the specific amount (if any) to be paid
to each Participant, subject in all cases to the terms, conditions and limits
of the Plan. To this same extent, the Committee may at any time establish (and,
once established, rescind, waive or amend) additional conditions and terms of
payment of Awards (including but not limited to the achievement of other
financial, strategic or individual goals, which may be objective or subjective)
as it may deem desirable in carrying out the purposes of the Plan. The
Committee may not, however, increase the maximum amount permitted to be paid to
any individual under the Plan or pay Awards under this Section 9 if the
applicable Performance Target(s) have not been satisfied.

B.             Performance-Based Restricted Stock or Restricted Stock Unit Awards.

(i)        Grants of Performance-Based Restricted Stock or
Restricted Stock Units.  Subject to Section 9A,
one or more shares of Performance-Based Restricted Stock or Restricted Stock
Units may be granted to any Eligible Person. The Performance-Based Restricted
Stock or Restricted Stock Unit will be issued to the Participant on the Date of
Grant without the payment of consideration by the Participant. The
Performance-Based Restricted Stock or Restricted Stock Unit will be issued in
the name of the Participant and will bear a restrictive legend prohibiting
sale, transfer, pledge or hypothecation of the Performance-Based Restricted
Stock or Restricted Stock Unit until the expiration of the restriction period.

The
Committee may also impose such other restrictions and conditions on the Performance-Based
Restricted Stock or Restricted Stock Unit as it deems appropriate.

Upon
issuance to the Participant of the Performance-Based Restricted Stock, the
Participant will have the right to vote the Performance-Based Restricted Stock.
Upon issuance to the Participant of the Performance-Based Restricted Stock or
Restricted Stock Unit and subject to the Committee’s discretion, the
Participant will have the right to receive the cash dividends (or Dividend
Equivalents as provided in Section 11) distributable with respect to such
shares or units, with such dividends or Dividend Equivalents treated as
compensation to the Participant. The Committee, in its sole discretion, may
direct the accumulation and payment of distributable dividends to the
Participant at such times, and in such form and manner, as determined by the
Committee.

(ii)       Restriction Period.  At the time a
Performance-Based Restricted Stock or Restricted Stock Unit Award is granted,
the Committee will establish a restriction period applicable to such Award
which will be not less than one year and not more than ten years. Each
Performance-Based Restricted Stock or Restricted Stock Unit Award may have a
different restriction period, at the discretion of the Committee.

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(iii)      Waiver of Section 83(b) Election.  Unless otherwise directed by
the Committee, as a condition of receiving an Award of Performance-Based
Restricted Stock, a Participant must waive in writing the right to make an
election under Section 83(b) of the Code to report the value of the Performance-Based
Restricted Stock as income on the Date of Grant.

C.            Performance
Units. 
Subject to Section 9A, one or more Performance Units may be
earned by an Eligible Person based on the achievement of preestablished
performance objectives during a Performance Period.

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

As soon as practicable after
the date the Committee makes the above determination, the Committee will
determine the Award payment for each Participant. Before any payments are made
under this Section 9, the Committee shall be responsible for certifying in
writing to the Company that the applicable Performance Targets have been met.

In the event a Participant
ceases employment (or ceases Board membership in the case of a director) during
a Performance Period, the Performance-Based Restricted Stock, Performance-Based
Restricted Stock Unit or Performance Unit Award is subject to forfeiture or
payout as follows: (a) Termination—the Performance-Based Restricted Stock,
Performance-Based Restricted Stock Unit or Performance Unit Award is completely
forfeited; or (b) Retirement, Disability or death—payout of the
Performance-Based Restricted Stock, Performance-Based Restricted Stock Unit or
Performance Unit Award is prorated taking into account factors including, but
not limited to, service and the performance of the Participant during the
portion of the Performance Period before employment ceased; provided, however,
that the Committee may modify the above if it determines in its sole discretion
that special circumstances warrant such modification.

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

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E.             Form and Timing
of Payment.  With respect to shares of
Performance-Based Restricted Stock or Restricted Stock Units for which
restrictions lapse, new certificates will be issued (the payout) without the
restrictive legend described in Section 9B(i).  Each Performance Unit is payable in cash or
shares of Stock or in a combination of cash and Stock, as determined by the
Committee in its sole discretion. Such payment will be made as soon as
practicable after the Award payment is determined.

10.          Stock Appreciation Rights.

A.            Grants of Stock
Appreciation Rights.   Stock Appreciation Rights may be
granted under the Plan in conjunction with an Option either at the Date of
Grant or by amendment or may be separately granted. Stock Appreciation Rights
will be subject to such terms and conditions not inconsistent with the Plan as
the Committee may impose.

B.            Right to
Exercise; Exercise Period.  A Stock Appreciation Right issued
pursuant to an Option will be exercisable to the extent the Option is
exercisable; both such Stock Appreciation Right and the Option to which it
relates will not be exercisable during the six months following their
respective Dates of Grant except in the event of the Participant’s Disability
or death. A Stock Appreciation Right issued independent of an Option will be
exercisable pursuant to such terms and conditions established in the grant.
Notwithstanding such terms and conditions, in the event of a public tender for
all or any portion of the Stock or in the event that any proposal to merge or
consolidate the Company with another company is submitted to the stockholders
of the Company for a vote, the Committee, in its sole discretion, may declare
any previously granted Stock Appreciation Right immediately exercisable.

C.            Failure to
Exercise.  If on the last day of the Option
Period, in the case of a Stock Appreciation Right granted pursuant to an
Option, or the specified Exercise Period, in the case of a Stock Appreciation
Right issued independent of an Option, the Participant has not exercised a
Stock Appreciation Right, then such Stock Appreciation Right will be deemed to
have been exercised by the Participant on the last day of the Option Period or
Exercise Period.

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

 13
 

 

(in cash or Stock or a combination thereof as described below) equal to
either of the following amounts, determined in the sole discretion of the
Committee at the Date of Grant: (1) the excess of the Fair Market Value of
one share of Stock at the date of exercise over the Fair Market Value of one
share of Stock at the Date of Grant of the Stock Appreciation Right, times the
number of shares called for by the Stock Appreciation Right, or (2) the
excess of the Book Value of one share of Stock at the date of exercise of the
Stock Appreciation Right over the Book Value of one share of Stock at the Date
of Grant of the Stock Appreciation Right, times the number of shares called for
by the Stock Appreciation Right.

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

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

F.             Lapse of a
Stock Appreciation Right.  A Stock Appreciation Right will lapse
upon the earlier of: (i) 10 years from the Date of Grant; or
(ii) at the expiration of the Exercise Period as set by the grant. If the
Participant ceases employment (or ceases Board membership in the case of a
director) within the Exercise Period and prior to the lapse of the Stock
Appreciation Right, the Stock Appreciation Right will lapse as follows:
(a) Termination—any unvested Stock Appreciation Right will lapse on the
effective date of the Termination and any vested Stock Appreciation Right will
lapse 90 days after the effective date of the Termination; or
(b) Retirement, Disability or death—any unvested Stock Appreciation Right
will lapse on the effective date of the Retirement, Disability or death and any
vested Stock Appreciation Right will lapse on the earlier of 60 months
after the effective date of the Retirement, Disability or death or at the
expiration of the Exercise Period set by the grant; provided, however, that the
Committee may modify the above if it determines in its sole discretion that
special circumstances warrant such modification.

11.           Dividend
Equivalents.

A.           Grants of
Dividend Equivalents.  Dividend Equivalents may be granted
under the Plan in conjunction with an Option or a separately awarded Stock 

 14
 

 

Appreciation Right, at the Date of Grant or by amendment, without
consideration by the Participant. Dividend Equivalents may also be granted
under the Plan in conjunction with Performance-Based Restricted Stock,
Performance-Based Restricted Stock Units or Performance Units, at any time
during the Performance Period, without consideration by the Participant.

B.            Payment.  Each
Dividend Equivalent will entitle the Participant to receive an amount equal to
the dividend actually paid with respect to a share of Stock on each dividend
payment date from the Date of Grant to the date the Dividend Equivalent lapses
as set forth in Section 11D. The Committee, in its sole discretion, may
direct the payment of such amount at such times and in such form and manner as
determined by the Committee.

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

D.           Lapse of a
Dividend Equivalent.  Each Dividend Equivalent will lapse on
the earlier of (i) the date of the lapse of the related Option or Stock
Appreciation Right; (ii) the date of the exercise of the related Option or
Stock Appreciation Right; (iii) the end of the Performance Period (or if
earlier, the date the Participant ceases employment) of the related Performance
Units or Performance-Based Restricted Stock or Restricted Stock Unit Award; or
(iv) the lapse date established by the Committee on the Date of Grant of
the Dividend Equivalent.

12.           Equity.  One or more shares of Stock may be
granted to any Eligible Person, in such amounts, on such terms and conditions,
and for such consideration, including no consideration or such minimum
consideration as may be required by law, as the Committee shall determine. An
Equity Award may be denominated in Stock or other securities, stock-equivalent
units, securities or debentures convertible into Stock, or any combination of
the foregoing and may be paid in Stock or other securities, in cash, or in a
combination of Stock or other securities and cash, all as determined in the
sole discretion of the Committee. Unless the Committee determines otherwise,
the vesting period for Equity Awards shall be at least three years.

13.           Accelerated Award Payout/Exercise.

A.            Change in
Control.  Notwithstanding anything in this Plan
document to the contrary, a Participant is entitled to an accelerated payout
(as set forth in Section 13B) with respect to any previously granted Award
upon the happening of a change in control; provided, that, except
as otherwise expressly provided to the contrary in the applicable grant
agreement, a Participant will not be entitled to an accelerated vesting or
payout of any Covered Awards in connection with the consummation of the
transactions contemplated by the Agreement and Plan of Merger dated as of
December 18, 2005 by and among FPL Group, Inc., CF Merger Corporation and the
Company (the “Excluded Transactions”), and such Covered Awards shall remain
outstanding in accordance with their terms following the consummation of the
Excluded Transactions, subject to any adjustments made by the Plan
Administrator in accordance with the provisions of Section 15.

 15
 

 

A change in control for purposes of this Section 13 means the
occurrence of any one of the following events:

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

(ii)       any “person” (as such term is defined in
Section 3(a)(9) of the 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 Participant or any group of persons including Participant (or
any entity controlled by Participant or any group of persons including
Participant);

(iii)      consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving 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 Surviving Corporation (the “Parent Corporation”), is represented by Company Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, 

 16
 

 

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

B.            Amount of Award
Subject to Accelerated Payout.  The amount of a Participant’s
previously granted Award that will be paid or exercisable upon the happening of
a change in control (or if earlier upon the termination of the Participant’s
employment with the Company or a Subsidiary if it is reasonably demonstrated
that such termination (i) was at the request of a third party who has
taken steps reasonably calculated to effect a change in control or
(ii) otherwise arose in connection with or anticipation of a change in
control) will be determined as follows, provided, that, except as
otherwise expressly provided to the contrary in the applicable grant agreement,
a Participant will not be entitled to an accelerated vesting or payout of any
Covered Awards under this Section 13B in connection with the consummation of
the Excluded Transactions:

Service-Based Restricted
Stock or Restricted Stock Unit Awards.  The Participant will be entitled to an
accelerated Award payout, and the amount of the payout will be based on the
number of shares of Service-Based Restricted Stock or Restricted Stock Units
that were issued on the Date of Grant.

 17
 

 

Stock Option Awards and
Stock Appreciation Rights.  Any previously granted Stock Option
Awards or Stock Appreciation Rights will be immediately vested, any gain will
be immediately paid in cash, and the Stock Option Awards and/or Stock
Appreciation Rights will then lapse.

Performance-Based Restricted
Stock or Restricted Stock Units/Performance Units.  The Participant will be
entitled to an accelerated Award payout, and the amount of the payout will be
based on the number of shares of Performance-Based Restricted Stock or
Restricted Stock Units/Performance Units subject to the Award as established on
the Date of Grant, prorated based on the number of months of the Performance
Period that have elapsed as of the payout date, and assuming that maximum
performance was achieved.

Equity Awards.  Any
previously granted Equity Award will be immediately vested.

Covered Awards.  Except as may
be expressly provided to the contrary in the applicable grant agreement,
Covered Awards shall not vest or be subject to immediate payout as a result of
the consummation of the Excluded Transactions, but will remain outstanding in
accordance with their terms following the consummation of the Excluded
Transactions, subject to any adjustments made by the Plan Administrator in
accordance with the provisions of Section 15.

C.            Timing of
Accelerated Payout/Option Period/Exercise Period.  The accelerated payout
set forth in Section 13B will be made in cash within 30 days after
the date of the change in control. When Stock is related to the Award, the
amount of cash will be determined based on the Fair Market Value of Stock on
the payout date.

14.           Amendment of Plan.

The Committee may at any
time and from time to time alter, amend, suspend or terminate the Plan in whole
or in part, except (i) no such action may be taken without stockholder
approval which materially increases the number of securities which may be
issued pursuant to the Plan (except as provided in Section 15H), extends
the period for granting Options under the Plan or materially modifies the
requirements as to eligibility for participation in the Plan; (ii) no such
action may be taken without the consent of the Participant to whom any Award
was previously granted, which adversely affects the rights of such Participant
concerning such Award, except as such termination or amendment of the Plan is
required by statute, or rules and regulations promulgated thereunder; and
(iii) no such action that would require the consent of the Board and/or
the stockholders of the Company pursuant to Section 162(m) of the Code or
the 1934 Act, or any other applicable law, rule, or regulation, shall be
effective without such consent. Notwithstanding the foregoing, the Committee
may amend the Plan as desirable at the discretion of the Committee to address
any issues concerning (i) Section 162(m) of the Code, or (ii) maintaining
an exemption under rule 16b-3 of the 1934 Act.

 18
 

 

15.           Miscellaneous
Provisions.

A.           Nontransferability.  No
benefit provided under this Plan shall be subject to alienation or assignment
by a Participant (or by any person entitled to such benefit pursuant to the
terms of this Plan), nor shall it be subject to attachment or other legal
process except (i) to the extent specifically mandated and directed by
applicable state or federal statute; (ii) as requested by the Participant
(or by any person entitled to such benefit pursuant to the terms of this Plan),
and approved by the Committee, to satisfy income tax withholding; and
(iii) as requested by the Participant and approved by the Committee, to
members of the Participant’s family, or a trust established by the Participant
for the benefit of family members.

B.            No Employment Right.  Participation in this
Plan shall not constitute a contract of employment between the Company or any
Subsidiary and any person and shall not be deemed to be consideration for, or a
condition of, continued employment of any person.

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

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

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

F.            Indemnification.  Each
person who is or at any time serves as a member of the Committee (and each
person or Committee to whom the Committee or any member thereof has delegated
any of its authority or power under this Plan) shall be indemnified and held
harmless by the Company against and from (i) any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such person in
connection with or resulting from any claim, action, suit, or proceeding to
which such person may be a party or in which such person may be involved by reason
of any 

 19
 

 

action or failure to act under the Plan; and (ii) any and all
amounts paid by such person in satisfaction of judgment in any such action,
suit, or proceeding relating to the Plan. Each person covered by this
indemnification shall give the Company an opportunity, at its own expense, to
handle and defend the same before such person undertakes to handle and defend
it on such person’s own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Charter or By-Laws of the Company or any of its
Subsidiaries, as a matter of law, or otherwise, or any power that the Company
may have to indemnify such person or hold such person harmless.

G.            Reliance on
Reports.  Each member of the Committee (and each
person or Committee to whom the Committee or any member thereof has delegated
any of its authority or power under this Plan) shall be fully justified in
relying or acting in good faith upon any report made by the independent public
accountants of the Company and its Subsidiaries and upon any other information
furnished in connection with the Plan. In no event shall any person who is or
shall have been a member of the Committee be liable for any determination made
or other action taken or any omission to act in reliance upon any such report
or information or for any action taken, including the furnishing of
information, or failure to act, if in good faith.

H.            Changes in
Capital Structure.  In the event of any change in the
outstanding shares of Stock by reason of any stock dividend or split,
recapitalization, combination or exchange of shares or other similar changes in
the Stock, then appropriate adjustments shall be made in the shares of Stock
theretofore awarded to the Participants and in the aggregate number of shares
of Stock which may be awarded pursuant to the Plan. Such adjustments shall be
conclusive and binding for all purposes. Additional shares of Stock issued to a
Participant as the result of any such change shall bear the same restrictions
as the shares of Stock to which they relate.

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

 20
 

 

J.              Governing Law.  All
matters relating to the Plan or to Awards granted hereunder shall be governed
by the laws of the State of Maryland, without regard to the principles of
conflict of laws.

K.             Relationship to
Other Benefits.  Any Awards under this Plan are not
considered compensation for purposes of determining benefits under any pension,
profit sharing, or other retirement or welfare plan, or for any other general
employee benefit program.

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

M.            Titles and
Headings.  The titles and headings of the
sections in the Plan are for convenience of reference only, and in the event of
any conflict, the text of the Plan, rather than such titles or headings, shall
control.

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

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

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

Corporate Secretary

750 East Pratt Street

18th Floor

Baltimore, Maryland 21202

(410) 783-3600

 21
 

 

2002
Executive Long-Term Incentive Plan

Appendix

Additional Information

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

Participants may obtain additional information about
the Plan by contacting:

Manager – Executive
Compensation

Constellation Energy Group,
Inc.

750 East Pratt Street

5th Floor

Baltimore, MD  21202

410-783-3244

After each grant is made, participants will be
furnished with information about the amount of the grant.  Participants have access to information about
their outstanding grants.

In general, grants subject to restrictions are taxable
to participants when the restrictions lapse, and deductible by Constellation
Energy at such time, based on the fair market value of the awards when the
restrictions lapse.  Grants not subject
to restrictions are taxable/deductible at fair market value on the grant
date.  Additionally, options are subject
to other special tax provisions.

 22
 

 

FORM OF SERVICE-BASED RESTRICTED STOCK AWARD AGREEMENT

[DATE]

Recipient Name

Recipient Title

Company

Company Address

City,
State Zip Code

RE:  Service-Based Restricted
Stock Award

Dear
Recipient:

Effective date, The Board of Directors
Compensation Committee, (The Committee), granted you [#]
service-based restricted shares of CEG Common Stock (the “Award”) pursuant to
Section 7 of the Constellation Energy Group, Inc. Executive Long–Term Incentive
Plan (the “Plan”).  In addition to other
provisions of the Plan (a copy of which is provided to you with this letter),
your Award is subject to the following conditions:

1.       The Plan restriction period for these shares
expires as show on the restriction lapse dates in the table below:

	
  # Shares

  Granted

  	
   

  	
  Share

  Grant

  Date

  	
   

  	
  Restriction

  Period

  	
   

  	
  Restriction

  Lapse

  Date

  	
   

  	
  Aggregate

  Shares

  Lapsed

  
	
  [#]

  	
   

  	
  mm/dd/yy

  	
   

  	
  [one to five

  years]

  	
   

  	
  [one to five

  years after

  Share Grant

  Date]

  	
   

  	
  [#]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2.       The Plan requires that as a condition to
receiving your Award, you waive in writing the right to make an election under
Section 83(b) of the Internal Revenue Code of 1986 with respect to your Award
(see Section 7D of the Plan).  Your
execution of this letter will constitute your waiver to make such election
under Section 83(b).  This waiver means
that you will not have the option of electing to be taxed on the restricted
shares at the time of the grant. 
Instead, you will be taxed on the restricted shares at the time the Plan
restrictions are removed (see Attachment A). 
This waiver allows the Company to treat dividends paid to you during the
period of the Plan restrictions as compensation, thereby giving the Company a
tax deduction for such amounts.

3.       As provided in the Plan, until the Plan restriction period expires, you
may not sell, transfer, pledge or hypothecate the Award shares.  CEG will hold the shares for safekeeping
until the restriction lapse, unless you let us know that you want a stock
certificate for the Award.  If you prefer
a certificate, it will be issued in your name with a legend to the effect that
you may not sell, transfer, pledge, or hypothecate the Award shares and that
the shares are subject to certain conditions under the Plan.

 23
 

 

4.       If you contemplate the sale or transfer (for
example to a family member) of any shares after the restriction period expires,
you should contact the SEC-related persons specified below for advice on the
timing of any sale or transfer and any reporting obligations you may have.

Please read the Plan carefully as it contains many other provisions
relating to your Award.  If you have any
questions, please do not hesitate to call:

	
  General

  	
   

  	
  SEC-related

  	
   

  	
  Tax-related

  
	
  [NAME]

  	
   

  	
  [NAME]

  	
   

  	
  [NAME]

  
	
  [PHONE
  NUMBER]

  	
   

  	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  

 

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

Sincerely,

[NAME]

[TITLE,
DEPARTMENT]

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

	
   

  	
   

  	
   

  	
   

  
	
  Signature of Recipient

  	
  Date

  

 

 24
 

 

This document constitutes part of
a prospectus covering securities

that have been registered under the Securities Act of 1933.

ATTACHMENT A

CONSTELLATION
ENERGY GROUP, INC.

INCOME TAX CONSEQUENCES TO PARTICIPANTS

FOR SERVICE-BASED
RESTRICTED STOCK AWARDS

Set forth is a brief overview of certain income tax consequences
associated with your Service-Based Restricted Stock Award (“the Award”).

Stock

Because the Plan places certain restrictions on the Award which could
lead to forfeiture of the shares prior to lifting the Plan restrictions and
because you have agreed to waive the Section 83(b) election(1), the value of
the restricted stock is not taxed to you when the initial grant is made.  Rather, the stock is taxable to you at the
time the restrictions are removed.  The
amount subject to income tax is the fair market value of the stock on the day
that the Plan restrictions are removed. 
This amount is treated as compensation subject to withholding of income
taxes, Medicare taxes and, if applicable, Social Security taxes.  You are not taxed on the value of any stock
forfeited.

For purposes of determining the gain or loss on any sale of the stock
received pursuant to this Award, your basis in the stock is the amount that you
included in taxable income when the Plan restrictions were removed.  Your tax holding period, for purposes of
determining whether a gain or loss on a sale is long-term or short-term, begins
on the day after the day that the Plan restrictions were removed.

Dividends

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

After the Plan restrictions on the stock are removed, the dividends are
treated as regular dividend income (generally not subject to tax withholding).

Tax Planning

You may wish to consult your tax advisor in the year the restrictions
are lifted from the Award if you have questions regarding the impact of the
Award on your tax withholding or if you have questions about the applicable
capital gains holding period and rates for this Award.

 25
 

 

 

(1) The Plan
requires that as a condition to receiving a Restricted Stock Award, you must
waive in writing the right to make an election under Section 83(b) of the
Internal Revenue Code of 1986 with respect to your Award (see Section 7 D of
the Plan).  This waiver means that you
will not have the option of electing to be taxed on the restricted shares at
the time of grant.  Instead, you will be
taxed on the restricted shares at the time the Plan restrictions are removed.  This allows the Company to treat dividends
paid during the period of Plan restrictions as compensation, thereby giving the
Company a tax deduction for such amounts.

 26
 

 

This document constitutes part of
a prospectus covering securities

that have been registered under the Securities Act of 1933.

FORM OF
PERFORMANCE UNIT AGREEMENT

[date]

TO: «First» «MI» «Last»

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

	
  Target

  Grant

  (# Units)

  	
   

  	
  Grant

  Date

  	
   

  	
  Performance

  Period

  	
   

  	
  Vesting Date

  	
   

  
	
  [#]

  	
   

  	
  [MM/DD/YY]

  	
   

  	
  [3-Year
  Period]

  	
   

  	
  [End
  of 3-Year

  Period]

  	
   

  

 

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

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

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

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

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

	
  

  	
   

  	
   

  	
   

  	
  Primary

  Measure

  	
   

  	
  Secondary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  TSR v. DJEUI

  Large & Mid-Cap

  Investment

  Grade

  Companies

  	
   

  	
  Measure

  TSR v. S&P

  500 Index

  Comparison

  Group

  	
   

  
	
  Performance

  Level

  	
   

  	
  Total Shareholder

  Return

  	
   

  	
  Payout vs.

  Target

  	
   

  	
  Payout vs.

  Target

  	
   

  
	
  <Threshold

  	
   

  	
  <[    ]
  Percentile

  	
   

  	
  [    ]

  	
  %

  	
  [    ]

  	
  %

  
	
  Threshold

  	
   

  	
  [    ]
  Percentile

  	
   

  	
  [    ]

  	
  %

  	
  [    ]

  	
  %

  
	
  Target

  	
   

  	
  [    ]
  Percentile

  	
   

  	
  [    ]

  	
  %

  	
  [    ]

  	
  %

  
	
  Stretch

  	
   

  	
  [    ] Percentile

  	
   

  	
  [    ]

  	
  %

  	
  [    ]

  	
  %

  

 

Payout levels interpolated between points.

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

 27

 

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

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

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

Please read the Plan
carefully as it contains many other provisions relating to your award.  If you have any questions, please do not
hesitate to call:

	
  General

  	
   

  	
  SEC-related

  	
   

  	
  Tax-related

  
	
  [NAME]

  	
   

  	
  [NAME]

  	
   

  	
  [NAME]

  
	
  [PHONE
  NUMBER]

  	
   

  	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  

 

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

Sincerely,

[NAME]

[TITLE, DEPARTMENT]

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

	
   

  	
   

  	
   

  	
   

  
	
  Signature of «First» «MI»
  «Last»

  	
  DATE

  	
   

  

 

 28
 

 

FORM OF STOCK UNIT AWARD WITH SALE RESTRICTION AGREEMENT

[DATE]

Recipient Name

Recipient Title

Company

Company Address

City,
State Zip Code

RE:  Stock Unit Award with Sale
Restriction

Dear
Recipient:

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

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

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

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

	
  # Deferred

  Shares 

  Granted

  	
   

  	
  Deferred 

  Share

  Grant

  Date

  	
   

  	
  Restriction

  Period

  	
   

  	
  Restriction

  Lapse 

  Date

  	
   

  
	
  [#]

  	
   

  	
  [MM/DD/YY]

  	
   

  	
  [5 years]

  	
   

  	
  [5 years after 

  Grant Date]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 29
 

 

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

Please read the Plan carefully as it contains many other provisions
relating to your award.  If you have any
questions, please do not hesitate to call:

	
  General

  	
   

  	
  SEC-related

  	
   

  	
  Tax-related

  
	
  [NAME]

  	
   

  	
  [NAME]

  	
   

  	
  [NAME]

  
	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  

 

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

Sincerely,

[NAME]

[TITLE,
DEPARTMENT]

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

 

	
  

  	
   

  	
   

  	
   

  
	
  Signature of Recipient

  	
  DATE

  	
   

  

 

 30
 

 

This document constitutes part of
a prospectus covering securities

that have been registered under the Securities Act of 1933.

FORM OF

STOCK OPTION AGREEMENT

This Stock Option
Agreement (“Agreement”) is subject to the terms and conditions of the
Constellation Energy Group, Inc. Executive Long-Term Incentive Plan (the “Plan”).  The «Administrator» Constellation Energy
Group, Inc. (the “Plan Administrator”) has authorized the option grant under
this Agreement by and between Participant (designated below) and Constellation
Energy Group, Inc. (“Constellation Energy”).

1. Grant of Option.

(a) The “Participant”
is «First» «Middle» «Last».

(b) The date of
the grant is «GrantDate» (“Grant Date”).

(c) The number of
shares subject to the option (“Option Shares”) are «Grant»
shares of Constellation Energy common stock (“Stock”).

(d) The exercise
price is [OptionPrice = fair market value of stock on grant
date] per share of Stock (“Exercise Price”).

This Agreement specifies
the terms of the option (“Option”) granted to Participant to purchase the
Option Shares at the Exercise Price set forth above. The Option is not intended to constitute an “incentive stock option” as
that term is used in Internal Revenue Code section 422.  The “Option Period” is the period during
which the Option is exercisable as provided in this Agreement.

2. Installment Exercise.

Subject to the
terms of this Agreement, the Option will be exercisable in installments
according to the following schedule (each a “Vesting Date”):

	
  INSTALLMENT

  	
   

  	
  VESTING DATE

  APPLICABLE TO

  INSTALLMENT

  
	
  [1/3 of
  Option Shares] Options

  	
   

  	
  [One year after Grant Date]

  
	
  [1/3 of
  Option Shares] Options

  	
   

  	
  [Two years after Grant Date]

  
	
  [1/3 of
  Option Shares] Options

  	
   

  	
  [Three years after Grant Date]

  

 

3. Termination of Option.

(a)           Except as provided in paragraph 3(b)
below, the Option will terminate upon the earlier to occur of: (1) when all
Option Shares have been exercised; or (2) ten (10) years from the Grant Date (“Expiration
Date”).

 31
 

 

(b)           If Participant ceases employment, the
Option will terminate as to any unvested Option Shares on the effective date of
Participant’s employment Termination (as defined in the Plan) and as to vested
Option Shares 90 days after such effective date; provided that if Participant
ceases employment because of Participant’s Retirement, Disability (each as
defined in the Plan), or death, the Option will terminate as to any unvested
Option Shares on the effective date of the Retirement, Disability or death, and
as to vested Option Shares, the Option will remain exercisable until the
earlier of 60 months after such effective date or the Expiration Date.

(c)           In the event of Participant’s death
during the Option Period, vested Option Shares may be exercised by Participant’s
legal representative(s), or by other person(s) authorized under Participant’s
will.  Alternatively, if Participant
fails to make testamentary disposition of the Option or dies intestate, such
vested Option Shares may be exercised by persons(s) entitled to receive the
Option Shares under the applicable laws of descent and distribution.

(d)           A transfer of Participant’s
employment between Constellation Energy and any Subsidiary of Constellation
Energy, or between Subsidiaries of Constellation Energy, will not be considered
an employment Termination.

4. Exercise of Option.

(a)           Subject to this Agreement and the
Plan, the Option may be exercised in whole or in part by the method specified
by the Plan Administrator from time to time or by contacting [NAME] at [PHONE NUMBER(S)].

(b)           On or before the exercise date
specified pursuant to paragraph 4(a), Participant must fully pay the Exercise
Price and the tax withholding obligation for the Option Shares exercised in
U.S. dollars by cash or by check payable to Constellation Energy Group,
Inc.  All or a portion of the Exercise
Price and tax withholding obligation may also be paid by Participant: (i)
subject to the terms of paragraph 4(c) below, by delivery of shares of Stock
owned by Participant and acceptable to the Plan Administrator having an
aggregate Fair Market Value (as defined in paragraph 6 below) on the date of
exercise that is equal to the amount of cash that would otherwise be required;
or (ii) by authorizing a third party to sell the Option Shares (or a sufficient
portion of the Option Shares), and immediately remit to Constellation Energy
the Exercise Price and any tax withholding resulting from such exercise.  Further, tax withholding up to the minimum
required withholding rate (but not in excess of that rate) may also be
satisfied through a holdback by Constellation Energy of some of the Option
Shares that would otherwise be deliverable to Participant by reason of the
Option exercise.  The Option will cease
to be exercisable, as to the portion exercised, when Participant purchases the
Stock to which the exercised portion of the Option relates.

(c)           Other shares of Stock owned by
Participant may be delivered to satisfy the Exercise Price, or to satisfy
Participant’s tax withholding obligation above the minimum withholding rate,
only if the shares have been held by Participant for at least six months before
delivery, except that there shall be no holding period imposed for shares
purchased by Participant for cash on the open market.  Use of previously-owned shares shall be
effected by actual delivery of the Stock certificates to Constellation Energy,
and by completing an affidavit available from Constellation Energy affirming
that Participant owns the necessary shares and that any applicable holding period
has been satisfied.

(d)           Participant is required to comply
with Constellation Energy’s Insider Trading Policy at all times, including in
connection with exercise of the Option. The Option may not be exercised by
Participant during any blackout or prohibited trading period established by
Constellation Energy or applicable to Participant, nor shall the Option be
exercisable if and to the extent Constellation Energy determines that such
exercise would violate applicable state or Federal securities laws or the rules
and 

 32
 

 

regulations of any
securities exchange on which the Stock is traded.  If Constellation Energy makes such a
determination, it will use all reasonable efforts to comply with such laws,
rules or regulations.  In making any such
determinations, Constellation Energy may rely on the opinion of counsel for
Constellation Energy.

(e)           As soon as practicable after the
exercise date, Constellation Energy will deliver to Participant a Stock
certificate or certificates (or other evidence of ownership) for the purchased
Option Shares.

5.  Tax Withholding.

Constellation
Energy will have the right to withhold any applicable federal, state or local
taxes, deductions or withholdings due with respect to the Option or its
exercise in such form and manner as provided in the Plan.

6. Fair Market Value.

The “Fair Market
Value” of a share of Stock is the average of the highest and lowest sale price
per share of Stock on the New York Stock Exchange-Composite Transactions on the
applicable date of reference, or if there are no sales on such date, then the
average of such highest and lowest sale price on the last previous day on which
sales are reported.

7. No Rights of Stockholders.

Participant does
not have any of the rights and privileges of a stockholder of Constellation Energy
with respect to any shares of Stock purchasable or issuable upon the exercise
of the Option, in whole or in part, before the date of exercise and purchase of
the Option Shares.

8. Non-Transferability of Option.

The Option is not
transferable, except for a transfer to Participant’s family member or to a
trust established for the benefit of Participant’s family members which has
been approved by the Plan Administrator as provided in the Plan, or in case of
Participant’s death, by will or the laws of descent and distribution, nor shall
the Option be subject to attachment, execution or other similar process.  During Participant’s lifetime, the Option is
exercisable only by Participant, any guardian or legal representative of
Participant, or a family member or trustee of a trust established for the
benefit of Participant’s family members to whom the Option has been transferred
in accordance with the Plan.  In the
event of (a) any attempt by Participant to alienate, assign, pledge,
hypothecate or otherwise dispose of the Option, except as provided in this
Agreement, or (b) the levy of any attachment, execution or similar process upon
the rights or interest conferred under this Agreement, Constellation Energy may
terminate the Option by notice to Participant and it will become null and void.

 33
 

 

9. Employment Not Affected.

Neither this
Agreement nor the grant of the Option constitutes a contract of employment
between Constellation Energy or any Subsidiary and Participant, and neither
will be deemed to be consideration for, or a condition of, continued employment
of Participant.

10. Incorporation of Plan by
Reference.

The Option is
granted pursuant to the terms of the Plan, the terms of which are incorporated
in this Agreement by reference.  The
Option will in all respects be interpreted in accordance with the Plan.  All capitalized terms, which are not
otherwise defined in this Agreement, will have the meaning specified in the
Plan.  The Plan Administrator will
interpret and construe the Plan and this Agreement, and its interpretations and
determinations will be conclusive and binding on the parties and any other
person claiming an interest with respect to any issue arising under this
Agreement.

11.  Severability.

The provisions of
this Agreement are severable.  If any one
or more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions will nevertheless be binding and
enforceable.

IN WITNESS WHEREOF,
Constellation Energy Group, Inc. and Participant have executed this Stock
Option Agreement effective as of the Grant Date.

	
  Constellation Energy Group,
  Inc

  	
  ACCEPTED AND AGREED TO:

  
	
   

  	
   

  
	
   

  	
   

  
	
  [NAME]

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  «First» «Middle» «Last»      

  	
   

  
	
  [TITLE,
  DEPARTMENT]

  	
   

  

 

 34EXHIBIT No. 10 (c)

This
document constitutes part of a prospectus covering securities

that have been registered under the Securities Act of 1933.

Constellation Energy Group, Inc.

Amended and Restated 2002 Senior Management Long-Term Incentive Plan

(Plan)

1.             Purpose. 
The purpose of this Plan is to increase shareholder value by providing a
long-term incentive to reward certain executives, senior management level and
key employees of the Company and its Subsidiaries, whose responsibilities
include the continued growth, development, and financial success of the Company
and its Subsidiaries, and the continued profitable performance of the Company
and its Subsidiaries. The Plan is also designed to permit the Company and its
Subsidiaries to attract and retain talented and motivated executive, senior
management and key employees and to increase their ownership of Company common
stock.

2.             Definitions.  All singular terms defined in this Plan will include the plural and vice versa. As used herein, the
following terms will have the meaning specified below:

“Award” means
individually or collectively, Restricted Stock, Restricted Stock Units,
Options, Performance Units, Stock Appreciation Rights, Dividend Equivalents, or
Equity granted under this Plan.

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

“Book Value” means
the book value of a share of Stock determined in accordance with the Company’s
regular accounting practices as of the last business day of the month
immediately preceding the month in which a Stock Appreciation Right is
exercised as provided in Section 10.

“Code” means the
Internal Revenue Code of 1986, as amended. Reference in the Plan to any section
of the Code will be deemed to include any amendments or successor provisions to
such section and any regulations promulgated thereunder.

“Company” means
Constellation Energy Group, Inc., a Maryland corporation, or its
successor, including any “New Company” as provided in Section 15I.

“Covered Award”
means any Award granted under the Plan on or after December 18, 2005.

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

“Date of
Retirement” means the date of Retirement.

“Disability” means
the determination that a Participant is “disabled” under the Company disability
plan in effect at that time.

 1
 

 

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

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

“Equity” means an
Award granted under Section 12.

“Excluded
Transactions” has the meaning set forth in Section 13.

“Exercise Period”
means the period or periods during which a Stock Appreciation Right is
exercisable as described in Section 10.

“Fair Market Value”
means the average of the highest and lowest price at which the Stock was sold
regular way on the New York Stock Exchange-Composite Transactions on a
specified date; provided, however, that notwithstanding the foregoing, solely for
purposes of determining the Option price per share of Stock under Section 8C
for Option grants made after October 19, 2006, “Fair Market Value” means the
price at which the Stock was last sold on the New York Stock Exchange-Composite
Transactions on the Date of Grant.

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

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

“Option” or “Stock
Option” means either a nonqualified stock option or an incentive stock option
granted under Section 8.

“Option Period” or
“Option Periods” means the period or periods during which an Option is
exercisable as described in Section 8.

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

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

“Performance-Based”
means that in determining the amount of a Restricted Stock or Restricted Stock
Unit Award payout, the Plan Administrator will take into account the
performance of the Participant, the Company, one or more Subsidiaries, or any
combination thereof.

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

 2
 

 

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

“Plan
Administrator” means, as set forth in Section 4, the Chief Executive
Officer of the Company.

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

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

“Retirement” means
retirement on or after the “Early Retirement Date” (as such term is defined in
the Pension Plan or a Subsidiary’s retirement or pension plan).

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

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

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

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

“Termination”
means resignation or discharge from employment with the Company or any of its
Subsidiaries except in the event of death, Disability, or Retirement.

“Year” means a
fiscal year of the Company commencing on or after January 1, 2002 that
constitutes all or part of the applicable Performance Period.

3.             Effective Date, Duration and Stockholder Approval.

A.            Effective Date and Stockholder Approval.  The
Plan became effective as of May 24, 2002, and was most recently amended
and restated effective as of October 19, 2006.

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

 3
 

 

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

4.             Plan Administration.  The
Chief Executive Officer is the Plan Administrator and has sole authority
(except as specified otherwise herein) to determine all questions of
interpretation and application of the Plan, or of the terms and conditions
pursuant to which Awards are granted, exercised or forfeited under the Plan
provisions, and, in general, to make all determinations advisable for the
administration of the Plan to achieve its stated purpose. Without limiting the
generality of the foregoing, the Plan Administrator may modify, amend, extend
or renew outstanding Awards, or accept the surrender of outstanding Awards and
substitute new Awards (provided, however, that, except as provided in
Section 15H of the Plan, any modification that would materially adversely
affect any outstanding Award shall not be made without the consent of the
Participant, and provided, further, that no modification, amendment or
substitution that results in repricing a Stock Option to a lower exercise
price, other than to reflect an adjustment made pursuant to Section 15H,
shall be made without prior stockholder approval).

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

The Plan Administrator
may delegate his/her authority under the Plan.

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

6.             Grant of Awards and Limitation of Number of
Shares Awarded.  The Plan Administrator may, from time
to time, grant Awards to one or more Eligible Persons, provided that subject to
any adjustment pursuant to Section 15H, the aggregate number of shares of
Stock subject to Awards that may be delivered under this Plan may not exceed four
million (4,000,000) shares. Shares delivered by the Company under the Plan may
be authorized and unissued Stock, Stock held in the treasury of the 

 4
 

 

Company,
or Stock purchased on the open market (including private purchases) in
accordance with applicable securities laws.

Any shares of Stock
covered by an Award (or portion of an Award) granted under the Plan that is
forfeited or canceled, expires or is settled in cash, including the settlement
of tax withholding obligations using shares, shall be deemed not to have been
delivered for purposes of determining the maximum number of shares available
for delivery under the Plan. Likewise, if any Option granted under the Plan is
exercised by tendering shares of Stock to the Company as full or partial
payment for such exercise under the Plan, only the number of shares issued net
of the shares tendered shall be deemed delivered for purposes of determining
the maximum number of shares available for delivery under the Plan.

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

7.             Service-Based Restricted Stock and Restricted Stock Unit Awards.

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

The Plan Administrator
may also impose such other restrictions and conditions on the Service-Based
Restricted Stock or Restricted Stock Unit as he/she deems appropriate.

Upon issuance to the
Participant of the Service-Based Restricted Stock, the Participant will have
the right to vote the Service-Based Restricted Stock. Upon issuance to the
Participant of the Restricted Stock or grant of the Restricted Stock Unit and
subject to the Plan Administrator’s discretion, the Participant will have the
right to receive the cash dividends (or Dividend Equivalents as provided in
Section 11) distributable with respect to such shares or units, with such
dividends or Dividend Equivalents treated as compensation to the Participant.
The Plan Administrator, in his/her sole discretion, may direct the accumulation
and payment of distributable dividends to the Participant at such times, and in
such form and manner, as determined by the Plan Administrator.

 5
 

 

B.            Restriction Period.  At
the time a Service-Based Restricted Stock or Restricted Stock Unit Award is
granted, the Plan Administrator will establish a restriction period applicable
to such Award which will be not less than one year and not more than ten years.
Each Restricted Stock or Restricted Stock Unit Award may have a different
restriction period, at the discretion of the Plan Administrator.

C.            Forfeiture or
Payout of Award.  In the event a Participant ceases employment during a restriction
period, a Service-Based Restricted Stock or Restricted Stock Unit Award is
subject to forfeiture or payout (i.e., removal of restrictions) as follows:
(a) Termination—the Service-Based Restricted Stock or Restricted Stock
Unit Award is completely forfeited; or (b) Retirement, Disability or
death—payout of the Service-Based Restricted Stock or Restricted Stock Unit
Award is prorated for service during the period; provided, however, that the
Plan Administrator may modify the above if he/she determines at his/her sole
discretion that special circumstances warrant such modification.

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

Upon completion of the
restriction period, all Award restrictions will expire and new certificates
representing the Award will be issued (the payout) without the restrictive
legend described in Section 7A.

D.            Waiver of
Section 83(b) Election.  Unless otherwise directed by the Plan
Administrator, as a condition of receiving an Award of Service-Based Restricted
Stock, a Participant must waive in writing the right to make an election under
Section 83(b) of the Code to report the value of the Service-Based
Restricted Stock as income on the Date of Grant.

8.             Stock Options.

A.            Grants of Options.  One
or more Options may be granted to any Eligible Person on the Date of Grant
without the payment of consideration by the Participant.

B.            Stock Option
Agreement.  Each Option granted under the Plan will be evidenced by a “Stock Option
Agreement” between the Company and the Participant containing provisions
determined by the Plan Administrator, including, without limitation, provisions
to qualify Incentive Stock Options as such under Section 422 of the Code
if directed by the Plan Administrator at the Date of Grant; provided, however,
that each Incentive Stock Option Agreement must include the following terms and
conditions: (i) that the Options are exercisable, either in total or in
part, with a partial exercise not affecting the exercisability of the balance
of the Option; (ii) every share of Stock purchased through the exercise of
an Option will be paid for in full at the time of the exercise; (iii) each
Option will cease to be exercisable, as to any share of Stock, at the earliest
of (a) the Participant’s purchase of the Stock to which the Option
relates, (b) the Participant’s exercise of a related Stock Appreciation
Right, or (c) the lapse of the Option; (iv) Options will not be
transferable by the 

 6
 

 

Participant
except by Will or the laws of descent and distribution and will be exercisable
during the Participant’s lifetime only by the Participant or by the Participant’s
guardian or legal representative; and (v) notwithstanding any other
provision, in the event of a public tender for all or any portion of the Stock
or in the event that any proposal to merge or consolidate the Company with
another company is submitted to the stockholders of the Company for a vote, the
Plan Administrator, in his/her sole discretion, may declare any previously
granted Options to be immediately exercisable.

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

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

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

F.             Lapse of Option.  An
Option will lapse upon the earlier of: (i) 10 years from the Date of
Grant, or (ii) at the expiration of the Option Period set by the grant. If
the Participant ceases employment within the Option Period and prior to the
lapse of the Option, the Option will lapse as follows: (a) Termination—any
unvested Option will lapse on the effective date of the Termination and any vested
Option will lapse 90 days after the effective date of the Termination; or
(b) Retirement, Disability or death—any unvested Option will lapse on the
effective date of the Retirement, Disability or death and any vested Option
will lapse on the earlier of 60 months after the effective date of the
Retirement, Disability or death or at the expiration of the Option Period set
by the Grant; provided, however, that the Plan Administrator may modify the
above if he/she determines in his/her sole discretion that special
circumstances warrant such modification.

G.            Individual
Limitation.  In the case of an Incentive Stock Option, the aggregate Fair Market
Value of the Stock for which Incentive Stock Options (whether under this Plan
or another arrangement) in any calendar year are first exercisable will not
exceed $100,000 with respect to such calendar year (or such other individual
limit as may be in effect under the Code on the Date of Grant) plus any unused
portion of such limit as the Code may permit to be carried over.

9.             Performance-Based Restricted Stock or Restricted Stock
Units/Performance Units.

 7
 

 

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

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

B.            Performance-Based Restricted Stock Awards or Restricted Stock Unit
Awards.

(i)            Grants of Performance-Based Restricted Stock
or Restricted Stock Units.  Subject to Section 9A, one or
more shares of Performance-Based Restricted Stock or Restricted Stock Unit may
be granted to any Eligible Person. The Performance-Based Restricted Stock or
Restricted Stock Unit will be issued to the Participant on the Date of Grant
without the payment of consideration by the Participant. The Performance-Based
Restricted Stock or Restricted Stock Unit will be issued in the name of the
Participant and will bear a restrictive legend prohibiting sale, transfer,
pledge or hypothecation of the Performance-Based Restricted Stock or Restricted
Stock Unit until the expiration of the restriction period.

The Plan
Administrator may also impose such other restrictions and conditions on the
Performance-Based Restricted Stock or Restricted Stock Unit as he/she deems
appropriate.

Upon issuance to
the Participant of the Performance-Based Restricted Stock, the Participant will
have the right to vote the Performance-Based Restricted Stock. Upon issuance to
the Participant of the Performance-Based Restricted Stock or grant of the
Restricted Stock Unit and subject to the Plan Administrator’s discretion, the
Participant will have the right to receive the cash dividends (or Dividend
Equivalents as provided in Section 11) distributable with respect to such
shares or units, with such dividends or Dividend Equivalents treated as
compensation to the Participant. The Plan Administrator, in his/her sole
discretion, may direct the accumulation 

 8
 

 

and
payment of distributable dividends to the Participant at such times, and in
such form and manner, as determined by the Plan Administrator.

(ii)           Restriction Period.  At the time a Performance-Based
Restricted Stock or Restricted Stock Unit Award is granted, the Plan
Administrator will establish a restriction period applicable to such Award
which will be not less than one year and not more than ten years. Each
Performance-Based Restricted Stock or Restricted Stock Unit Award may have a
different restriction period, at the discretion of the Plan Administrator.

(iii)          Waiver of Section 83(b) Election.  Unless otherwise
directed by the Plan Administrator, as a condition of receiving an Award of
Performance-Based Restricted Stock, a Participant must waive in writing the
right to make an election under Section 83(b) of the Code to report the
value of the Performance-Based Restricted Stock as income on the Date of Grant.

C.            Performance Units.  Subject to
Section 9A, one or more Performance Units may be earned by an Eligible
Person based on the achievement of preestablished performance objectives during
a Performance Period.

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

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

In the event a
Participant ceases employment during a Performance Period, the
Performance-Based Restricted Stock, Performance-Based Restricted Stock Unit or
Performance Unit Award is subject to forfeiture or payout as follows:
(a) Termination—the Performance-Based Restricted Stock, Performance-Based
Restricted Stock Unit or Performance Unit Award is completely forfeited; or
(b) Retirement, Disability or death—payout of the Performance-Based
Restricted Stock, Performance-Based Restricted Stock Unit or Performance Unit
Award is prorated taking into account factors including, but not limited to,
service and the performance of the Participant during the portion of the
Performance Period before employment ceased; provided, however, that the Plan
Administrator may modify the above if he/she determines in his/her sole
discretion that special circumstances warrant such modification.

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

 9
 

 

E.             Form and Timing of Payment.  With
respect to shares of Performance-Based Restricted Stock or Restricted Stock
Units for which restrictions lapse, new certificates will be issued (the
payout) without the restrictive legend described in Section 9B(i). Each
Performance Unit is payable in cash or shares of Stock or in a combination of cash
and Stock, as determined by the Plan Administrator in his/her sole discretion.
Such payment will be made as soon as practicable after the Award payment is
determined.

10.           Stock Appreciation
Rights.

A.            Grants of Stock Appreciation Rights.  Stock
Appreciation Rights may be granted under the Plan in conjunction with an Option
either at the Date of Grant or by amendment or may be separately granted. Stock
Appreciation Rights will be subject to such terms and conditions not
inconsistent with the Plan as the Plan Administrator may impose.

B.            Right to Exercise; Exercise Period.  A
Stock Appreciation Right issued pursuant to an Option will be exercisable to
the extent the Option is exercisable; both such Stock Appreciation Right and
the Option to which it relates will not be exercisable during the six months
following their respective Dates of Grant except in the event of the
Participant’s Disability or death. A Stock Appreciation Right issued
independent of an Option will be exercisable pursuant to such terms and
conditions established in the grant. Notwithstanding such terms and conditions,
in the event of a public tender for all or any portion of the Stock or in the
event that any proposal to merge or consolidate the Company with another
company is submitted to the stockholders of the Company for a vote, the Plan
Administrator, in his/her sole discretion, may declare any previously granted
Stock Appreciation Right immediately exercisable.

C.            Failure to Exercise.  If on the last day of
the Option Period, in the case of a Stock Appreciation Right granted pursuant
to an Option, or the specified Exercise Period, in the case of a Stock
Appreciation Right issued independent of an Option, the Participant has not
exercised a Stock Appreciation Right, then such Stock Appreciation Right will
be deemed to have been exercised by the Participant on the last day of the
Option Period or Exercise Period.

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

 10
 

 

pursuant
to an Option, the Participant will receive for each Stock Appreciation Right
payment (in cash or Stock or a combination thereof as described below) equal to
either of the following amounts, determined in the sole discretion of the Plan
Administrator at the Date of Grant: (1) the excess of the Fair Market
Value of one share of Stock at the date of exercise over the Fair Market Value
of one share of Stock at the Date of Grant of the Stock Appreciation Right,
times the number of shares called for by the Stock Appreciation Right, or
(2) the excess of the Book Value of one share of Stock at the date of
exercise of the Stock Appreciation Right over the Book Value of one share of
Stock at the Date of Grant of the Stock Appreciation Right, times the number of
shares called for by the Stock Appreciation Right.

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

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

F.             Lapse of a Stock Appreciation Right.  A Stock Appreciation
Right will lapse upon the earlier of: (i) 10 years from the Date of
Grant; or (ii) at the expiration of the Exercise Period as set by the
grant. If the Participant ceases employment within the Exercise Period and
prior to the lapse of the Stock Appreciation Right, the Stock Appreciation
Right will lapse as follows: (a) Termination—any unvested Stock
Appreciation Right will lapse on the effective date of the Termination and any
vested Stock Appreciation Right will lapse 90 days after the effective
date of the Termination; or (b) Retirement, Disability or death—any
unvested Stock Appreciation Right will lapse on the effective date of the
Retirement, Disability or death and any vested Stock Appreciation Right will
lapse on the earlier of 60 months after the effective date of the
Retirement, Disability or death or at the expiration of the Exercise Period set
by the grant; provided, however, that the Plan Administrator may modify the above
if he/she determines in his/her sole discretion that special circumstances
warrant such modification.

 11
 

 

11.           Dividend
Equivalents.

A.            Grants of Dividend Equivalents.  Dividend
Equivalents may be granted under the Plan in conjunction with an Option or a separately
awarded Stock Appreciation Right, at the Date of Grant or by amendment, without
consideration by the Participant. Dividend Equivalents may also be granted
under the Plan in conjunction with Performance-Based Restricted Stock,
Performance-Based Restricted Stock Units or Performance Units, at any time
during the Performance Period, without consideration by the Participant.

B.            Payment.  Each Dividend Equivalent will entitle
the Participant to receive an amount equal to the dividend actually paid with
respect to a share of Stock on each dividend payment date from the Date of
Grant to the date the Dividend Equivalent lapses as set forth in
Section 11D. The Plan Administrator, in his/her sole discretion, may
direct the payment of such amount at such times and in such form and manner as
determined by the Plan Administrator.

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

D.            Lapse of a Dividend Equivalent.  Each
Dividend Equivalent will lapse on the earlier of (i) the date of the lapse
of the related Option or Stock Appreciation Right; (ii) the date of the
exercise of the related Option or Stock Appreciation Right; (iii) the end
of the Performance Period (or if earlier, the date the Participant ceases employment)
of the related Performance Units or Performance-Based Restricted Stock or
Restricted Stock Unit Award; or (iv) the lapse date established by the
Plan Administrator on the Date of Grant of the Dividend Equivalent.

12.           Equity.  One or more shares of Stock may be granted
to any Eligible Person, in such amounts, on such terms and conditions, and for
such consideration, including no consideration or such minimum consideration as
may be required by law, as the Plan Administrator shall determine. An Equity
Award may be denominated in Stock or other securities, stock-equivalent units,
securities or debentures convertible into Stock, or any combination of the
foregoing and may be paid in Stock or other securities, in cash, or in a
combination of Stock or other securities and cash, all as determined in the
sole discretion of the Plan Administrator. Unless the Plan Administrator
determines otherwise, the vesting period for Equity Awards shall be at least
three years.

13.           Accelerated Award
Payout/Exercise.

A.            Change in Control.  Notwithstanding anything in this Plan document to
the contrary, a Participant is entitled to an accelerated payout (as set forth
in Section 13B) with respect to any previously granted Award upon the
happening of a change in control; provided, that, except as otherwise expressly
provided to the contrary in the applicable grant agreement, a Participant will
not be entitled to an accelerated vesting or payout of any Covered Awards in
connection with the 

 12
 

 

consummation
of the transactions contemplated by the Agreement and Plan of Merger dated as
of December 18, 2005 by and among FPL Group, Inc., CF Merger Corporation and
the Company (the “Excluded Transactions”), and such Covered Awards shall remain
outstanding in accordance with their terms following the consummation of the
Excluded Transactions, subject to any adjustments made by the Plan
Administrator in accordance with the provisions of Section 15.

A change in control for
purposes of this Section 13 means the occurrence of any one of the
following events:

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

(ii)           any “person” (as such term is defined in Section 3(a)(9) of the
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 Participant or any group of persons including Participant (or
any entity controlled by Participant or any group of persons including
Participant);

 13
 

 

(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 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 Company Voting Securities
beneficially owned by such person, a change in control of the Company shall
then occur.

B.            Amount of Award Subject to Accelerated Payout.    The amount
of a Participant’s previously granted Award that will be paid or exercisable
upon the 

 14
 

 

happening
of a change in control will be determined as follows, provided, that,
except as otherwise expressly provided to the contrary in the applicable grant
agreement, a Participant will not be entitled to an accelerated vesting or
payout of any Covered Awards under this Section 13B in connection with the
consummation of the Excluded Transactions:

Service-Based Restricted
Stock or Restricted Stock Unit Awards.    The
Participant will be entitled to an accelerated Award payout, and the amount of
the payout will be based on the number of shares of Service-Based Restricted
Stock or Restricted Stock Units that were issued on the Date of Grant.

Stock Option Awards and
Stock Appreciation Rights.    Any
previously granted Stock Option Awards or Stock Appreciation Rights will be
immediately vested, any gain will be immediately paid in cash, and the Stock
Option Awards and/or Stock Appreciation Rights will then lapse.

Performance-Based
Restricted Stock or Restricted Stock Units/Performance Units.    The
Participant will be entitled to an accelerated Award payout, and the amount of
the payout will be based on the number of shares of Performance-Based
Restricted Stock or Restricted Stock Units/Performance Units subject to the
Award as established on the Date of Grant, prorated based on the number of
months of the Performance Period that have elapsed as of the payout date, and
assuming that maximum performance was achieved.

Equity Awards.    Any
previously granted Equity Award will be immediately vested.

Covered
Awards.  Except as may be expressly provided to the
contrary in the applicable grant agreement, Covered Awards shall not vest or be
subject to immediate payout as a result of the consummation of the Excluded
Transactions, but will remain outstanding in accordance with their terms
following the consummation of the Excluded Transactions, subject to any
adjustments made by the Plan Administrator in accordance with the provisions of
Section 15.

C.            Timing of Accelerated Payout/Option
Period/Exercise Period.    The
accelerated payout set forth in Section 13B will be made in cash within
30 days after the date of the change in control. When Stock is related to
the Award, the amount of cash will be determined based on the Fair Market Value
of Stock on the payout date.

14.           Amendment of Plan.

The Plan Administrator may
at any time and from time to time alter, amend, suspend or terminate the Plan
in whole or in part, except no such action may be taken without the consent of
the Participant to whom any Award was previously granted, which adversely
affects the rights of such Participant concerning such Award, except as such 

 15
 

 

termination or amendment of
the Plan is required by statute, or rules and regulations promulgated
thereunder.

15.           Miscellaneous
Provisions.

A.            Nontransferability.    No benefit provided under this Plan
shall be subject to alienation or assignment by a Participant (or by any person
entitled to such benefit pursuant to the terms of this Plan), nor shall it be
subject to attachment or other legal process except (i) to the extent
specifically mandated and directed by applicable state or federal statute;
(ii) as requested by the Participant (or by any person entitled to such
benefit pursuant to the terms of this Plan), and approved by the Plan
Administrator, to satisfy income tax withholding; and (iii) as requested
by the Participant and approved by the Plan Administrator, to members of the
Participant’s family, or a trust established by the Participant for the benefit
of family members.

B.            No Employment Right.    Participation in this Plan shall not
constitute a contract of employment between the Company or any Subsidiary and
any person and shall not be deemed to be consideration for, or a condition of,
continued employment of any person.

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

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

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

F.             Indemnification.    The Plan Administrator (and his/her
designees) shall be indemnified and held harmless by the Company against and
from (i) any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting from any
claim, action, suit, or proceeding to which 

 16
 

 

such
person may be a party or in which such person may be involved by reason of any
action or failure to act under the Plan; and (ii) any and all amounts paid
by such person in satisfaction of judgment in any such action, suit, or
proceeding relating to the Plan. Each person covered by this indemnification
shall give the Company an opportunity, at its own expense, to handle and defend
the same before such person undertakes to handle and defend it on such person’s
own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Charter or By-Laws of the Company or any of its Subsidiaries, as a matter
of law, or otherwise, or any power that the Company may have to indemnify such
person or hold such person harmless.

G.            Reliance on Reports.    The Plan Administrator (and each person
to whom the Plan Administrator has delegated any of his/her authority or power
under this Plan) shall be fully justified in relying or acting in good faith
upon any report made by the independent public accountants of the Company and
its Subsidiaries and upon any other information furnished in connection with
the Plan. In no event shall the Plan Administrator (or each person to whom the
Plan Administrator has delegated any of his/her authority or power under this
Plan) be liable for any determination made or other action taken or any
omission to act in reliance upon any such report or information or for any
action taken, including the furnishing of information, or failure to act, if in
good faith.

H.            Changes in Capital Structure.    In the event
of any change in the outstanding shares of Stock by reason of any stock
dividend or split, recapitalization, combination or exchange of shares or other
similar changes in the Stock, then appropriate adjustments shall be made in the
shares of Stock theretofore awarded to the Participants and in the aggregate
number of shares of Stock which may be awarded pursuant to the Plan. Such
adjustments shall be conclusive and binding for all purposes. Additional shares
of Stock issued to a Participant as the result of any such change shall bear
the same restrictions as the shares of Stock to which they relate.

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

J.             Governing Law.    All matters relating to the Plan or to
Awards granted hereunder shall be governed by the laws of the State of
Maryland, without regard to the principles of conflict of laws.

K.            Relationship to Other Benefits.    Any Awards
under this Plan are not considered compensation for purposes of determining
benefits under any pension, profit sharing, or other retirement or welfare
plan, or for any other general employee benefit program.

 17
 

 

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

M.           Titles and Headings.    The titles and headings of the sections
in the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

 18
 

 

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

You may obtain without
charge, upon written or oral request, a copy of documents incorporated by
reference in the Registration Statement on file with the Securities and
Exchange Commission pertaining to the securities offered under the 2002 Senior
Management Long-Term Incentive Plan. In addition you may obtain, without
charge, upon written or oral request, a copy of documents that are required to
be delivered under Rule 428(b) of the Securities Act including our annual
report to shareholders or annual report on Form 10-K and a copy of the
documents that comprise the prospectus.

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

Corporate
Secretary

750 East Pratt Street

18th Floor

Baltimore, Maryland 21202

(410) 783-3600

 19
 

 

2002 Senior Management
Long-Term Incentive Plan

Appendix

Additional Information

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

Participants
may obtain additional information about the Plan by contacting:

Manager — Executive
Compensation

Constellation Energy Group, Inc.

750 East Pratt Street

5th Floor

Baltimore, MD 21202

410-783-3244

After
each grant is made, participants will be furnished with information about the
amount of the grant.  Participants have
access to information about their outstanding grants.

In
general, grants subject to restrictions are taxable to participants when the
restrictions lapse, and deductible by Constellation Energy at such time, based
on the fair market value of the awards when the restrictions lapse.  Grants not subject to restrictions are
taxable/deductible at fair market value on the grant date.  Additionally, options are subject to other
special tax provisions.

 20
 

 

FORM OF SERVICE-BASED RESTRICTED
STOCK AWARD AGREEMENT

[DATE]

Recipient Name

Recipient Title

Company

Company Address

City, State Zip Code

RE:  Service-Based Restricted Stock Award

Dear Recipient:

Effective date, The
Board of Directors Compensation Committee, (The Committee), granted you [#] service-based restricted shares
of CEG Common Stock (the “Award”) pursuant to Section 7 of the Constellation
Energy Group, Inc. 2002 Senior Management Long—Term Incentive Plan (the “Plan”).  In addition to other provisions of the Plan
(a copy of which is provided to you with this letter), your Award is subject to
the following conditions:

1.       The Plan restriction period for these shares expires as show on the
restriction lapse dates in the table below:

	
  # Shares

  Granted

  	
   

  	
  Share

  Grant

  Date

  	
   

  	
  Restriction

  Period

  	
   

  	
  Restriction

  Lapse

  Date

  	
   

  	
  Aggregate

  Shares

  Lapsed

  
	
  [#]

  	
   

  	
  mm/dd/yy

  	
   

  	
  [one
  to five

  years]

  	
   

  	
  [one
  to five

  years after

  Share Grant

  Date]

  	
   

  	
  [#]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2.       The Plan
requires that as a condition to receiving your Award, you waive in writing the
right to make an election under Section 83(b) of the Internal Revenue Code of
1986 with respect to your Award (see Section 7D of the Plan).  Your execution of this letter will constitute
your waiver to make such election under Section 83(b).  This waiver means that you will not have the
option of electing to be taxed on the restricted shares at the time of the
grant.  Instead, you will be taxed on the
restricted shares at the time the Plan restrictions are removed (see Attachment
A).  This waiver allows the Company to
treat dividends paid to you during the period of the Plan restrictions as
compensation, thereby giving the Company a tax deduction for such amounts.

3.       As provided in the Plan, until the Plan
restriction period expires, you may not sell, transfer, pledge or hypothecate
the Award shares.  CEG will hold the
shares for safekeeping until the restriction lapse, unless you let us know that
you want a stock certificate for the Award. 
If you prefer a certificate, it will be issued in your name with a
legend to the effect that you may not sell, transfer, pledge, or hypothecate
the Award shares and that the shares are subject to certain conditions under
the Plan.

 21
 

 

4.       If you contemplate the sale or transfer (for example to a family
member) of any shares after the restriction period expires, you should contact
the SEC-related persons specified below for advice on the timing of any sale or
transfer and any reporting obligations you may have.

Please read the Plan carefully as it contains many
other provisions relating to your Award. 
If you have any questions, please do not hesitate to call:

	
  General

  	
   

  	
  SEC-related

  	
   

  	
  Tax-related

  
	
  [NAME]

  	
   

  	
  [NAME]

  	
   

  	
  [NAME]

  
	
  [PHONE
  NUMBER]

  	
   

  	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  

 

 

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

Sincerely,

 

[NAME]

[TITLE, DEPARTMENT]

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

 

	
  

  	
   

  	
   

  	
   

  
	
  Signature of Recipient

  	
  Date

  

 

 22

 

This document constitutes part of a prospectus
covering securities

that have been registered under
the Securities Act of 1933.

ATTACHMENT A

CONSTELLATION ENERGY GROUP, INC.

INCOME
TAX CONSEQUENCES TO PARTICIPANTS

FOR SERVICE-BASED RESTRICTED STOCK AWARDS

Set forth is a brief overview of certain income tax
consequences associated with your Service-Based Restricted Stock Award (“the
Award”).

Stock

Because the Plan places certain restrictions on the
Award which could lead to forfeiture of the shares prior to lifting the Plan
restrictions and because you have agreed to waive the Section 83(b) election(1),
the value of the restricted stock is not taxed to you when the initial grant is
made.  Rather, the stock is taxable to
you at the time the restrictions are removed. 
The amount subject to income tax is the fair market value of the stock
on the day that the Plan restrictions are removed.  This amount is treated as compensation
subject to withholding of income taxes, Medicare taxes and, if applicable,
Social Security taxes.  You are not taxed
on the value of any stock forfeited.

For purposes of determining the gain or loss on any
sale of the stock received pursuant to this Award, your basis in the stock is
the amount that you included in taxable income when the Plan restrictions were
removed.  Your tax holding period, for
purposes of determining whether a gain or loss on a sale is long-term or
short-term, begins on the day after the day that the Plan restrictions were
removed.

Dividends

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

After the Plan restrictions on the stock are
removed, the dividends are treated as regular dividend income (generally not
subject to tax withholding).

Tax Planning

You may wish to consult your tax advisor in the year
the restrictions are lifted from the Award if you have questions regarding the
impact of the Award on your tax withholding or if you have questions about the
applicable capital gains holding period and rates for this Award.

(1)  The Plan
requires that as a condition to receiving a Restricted Stock Award, you must
waive in writing the right to make an election under Section 83(b) of the
Internal Revenue Code of 1986 with respect to your Award (see Section 7 D of
the Plan).  This waiver means that you
will not have the option of electing to be taxed on the restricted shares at
the time of grant.  Instead, you will be
taxed on the restricted shares at the time the Plan restrictions are
removed.  This 

 23
 

 

allows the Company to
treat dividends paid during the period of Plan restrictions as compensation,
thereby giving the Company a tax deduction for such amounts.

 24
 

 

This document constitutes part of a prospectus
covering securities 

that have been registered under the Securities Act
of 1933.

FORM OF PERFORMANCE UNIT AGREEMENT

[date]

TO: «First» «MI»
«Last»

Effective [Date], as part of the [3 CALENDAR YEAR PERFORMANCE PERIOD]
Long-Term Incentive Program, you were granted [#]
performance units (the “Units”) under the Constellation Energy Group, Inc.
2002 Senior Management Long—Term Incentive Plan (the “Plan”).  In addition to other provisions of the Plan,
your award is subject to the conditions set forth in this document.

	
  Target

  Grant

  (# Units)

  	
   

  	
  Grant

  Date

  	
   

  	
  Performance

  Period

  	
   

  	
  

  Vesting Date

  
	
  [#]

  	
   

  	
  [MM/DD/YY]

  	
   

  	
  [3-Year
  Period]

  	
   

  	
  [End
  of 3-Year Period]

  

 

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

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

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

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

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

	
  

  	
   

  	
   

  	
   

  	
  Primary

  Measure

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  TSR v. DJEUI

  Large & Mid-

  Cap

  Investment

  Grade

  Companies

  	
   

  	
  Secondary

  Measure

  TSR v. S&P

  500 Index

  Comparison

  Group

  	
   

  
	
  Performance

  Level

  	
   

  	
  Total Shareholder

  Return

  	
   

  	
  Payout vs.

  Target

  	
   

  	
  Payout vs.

  Target

  	
   

  
	
  <Threshold

  	
   

  	
  <[  ]
  Percentile

  	
   

  	
  [  ]

  	
  %

  	
  [  ]

  	
  %

  
	
  Threshold

  	
   

  	
  [  ]
  Percentile

  	
   

  	
  [  ]

  	
  %

  	
  [  ]

  	
  %

  
	
  Target

  	
   

  	
  [  ]
  Percentile

  	
   

  	
  [  ]

  	
  %

  	
  [  ]

  	
  %

  
	
  Stretch

  	
   

  	
  [  ]
  Percentile

  	
   

  	
  [  ]

  	
  %

  	
  [  ]

  	
  %

  

 

Payout levels interpolated between points.

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

 25
 

 

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

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

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

Please read the
Plan carefully as it contains many other provisions relating to your
award.  If you have any questions, please
do not hesitate to call:

	
  General

  	
   

  	
  SEC-related

  	
   

  	
  Tax-related

  
	
  [NAME]

  	
   

  	
  [NAME]

  	
   

  	
  [NAME]

  
	
  [PHONE
  NUMBER]

  	
   

  	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  

 

 

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

Sincerely,

 

[NAME]

[TITLE, DEPARTMENT]

 

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

 

	
  

  	
   

  	
   

  	
   

  
	
  Signature of
  «First» «MI» «Last»

  	
  DATE

  	
   

  

 

 26
 

 

FORM OF STOCK UNIT AWARD WITH
SALE RESTRICTION AGREEMENT

[DATE]

Recipient Name

Recipient Title

Company

Company Address

City, State Zip Code

RE:  Stock Unit Award with Sale Restriction

Dear Recipient:

Effective date, as
part of your [PERFORMANCE YEAR] annual
incentive and in recognition of your performance during [PERFORMANCE
YEAR], you were granted [#]
restricted Constellation Energy Group, Inc. (the “Company”) common stock units
with sale restrictions (“Deferred Shares”) under the Constellation Energy
Group, Inc. 2002 Senior Management Long-Term Incentive Plan (the “Plan”).  In addition to other provisions of the Plan,
your award is subject to the following conditions:

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

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

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

	
  # Deferred

  Shares

  Granted

  	
   

  	
  Deferred

  Share

  Grant

  Date

  	
   

  	
  

  Restriction

  Period

  	
   

  	
  Restriction

  Lapse

  Date

  
	
  [#]

  	
   

  	
  [MM/DD/YY]

  	
   

  	
  [5
  years]

  	
   

  	
  [5
  years after

  Grant Date]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 27
 

 

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

Please read the Plan carefully as it contains many
other provisions relating to your award. 
If you have any questions, please do not hesitate to call:

	
  General

  	
   

  	
  SEC-related

  	
   

  	
  Tax-related

  
	
  [NAME]

  	
   

  	
  [NAME]

  	
   

  	
  [NAME]

  
	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  	
   

  	
  [PHONE NUMBER]

  

 

 

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

Sincerely,

 

[NAME]

[TITLE, DEPARTMENT]

 

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

 

	
  

  	
   

  	
   

  	
   

  
	
  Signature of Recipient

  	
  Date

  

 

 28

 

This document constitutes part of a prospectus
covering securities 

that have been registered under the Securities Act
of 1933.

FORM OF

STOCK OPTION AGREEMENT

This
Stock Option Agreement (“Agreement”) is subject to the terms and conditions of
the Constellation Energy Group, Inc. 2002 Senior Management Long-Term Incentive
Plan (the “Plan”).  The «Administrator»
Constellation Energy Group, Inc. (the “Plan Administrator”) has authorized the
option grant under this Agreement by and between Participant (designated below)
and Constellation Energy Group, Inc. (“Constellation Energy”).

1. Grant
of Option.

(a)
The “Participant” is «First» «Middle» «Last».

(b)
The date of the grant is «GrantDate» (“Grant
Date”).

(c)
The number of shares subject to the option (“Option Shares”) are «Grant» shares of Constellation Energy common stock (“Stock”).

(d)
The exercise price is [OptionPrice = fair market
value of stock on grant date] per share of Stock (“Exercise Price”).

This
Agreement specifies the terms of the option (“Option”) granted to Participant
to purchase the Option Shares at the Exercise Price set forth above. The Option
is not intended to constitute an “incentive
stock option” as that term is used in Internal Revenue Code section 422.  The “Option Period” is the period during
which the Option is exercisable as provided in this Agreement.

2.
Installment Exercise.

Subject
to the terms of this Agreement, the Option will be exercisable in installments
according to the following schedule (each a “Vesting Date”):

	
  INSTALLMENT

  	
   

  	
  VESTING DATE

  APPLICABLE TO

  INSTALLMENT

  
	
  [1/3 of Option Shares] Options

  	
   

  	
  [One
  year after Grant Date]

  
	
  [1/3 of Option Shares] Options

  	
   

  	
  [Two
  years after Grant Date]

  
	
  [1/3 of Option Shares] Options

  	
   

  	
  [Three
  years after Grant Date]

  

 

3.
Termination of Option.

(a)           Except as provided in
paragraph 3(b) below, the Option will terminate upon the earlier to occur of:
(1) when all Option Shares have been exercised; or (2) ten (10) years from the
Grant Date (“Expiration Date”).

 29
 

 

(b)           If Participant ceases
employment, the Option will terminate as to any unvested Option Shares on the
effective date of Participant’s employment Termination (as defined in the Plan)
and as to vested Option Shares 90 days after such effective date; provided that
if Participant ceases employment because of Participant’s Retirement,
Disability (each as defined in the Plan), or death, the Option will terminate
as to any unvested Option Shares on the effective date of the Retirement,
Disability or death, and as to vested Option Shares, the Option will remain
exercisable until the earlier of 60 months after such effective date or the
Expiration Date.

(c)           In the event of
Participant’s death during the Option Period, vested Option Shares may be
exercised by Participant’s legal representative(s), or by other person(s)
authorized under Participant’s will. 
Alternatively, if Participant fails to make testamentary disposition of
the Option or dies intestate, such vested Option Shares may be exercised by
persons(s) entitled to receive the Option Shares under the applicable laws of
descent and distribution.

(d)           A transfer of
Participant’s employment between Constellation Energy and any Subsidiary of
Constellation Energy, or between Subsidiaries of Constellation Energy, will not
be considered an employment Termination.

4.
Exercise of Option.

(a)           Subject
to this Agreement and the Plan, the Option may be exercised in whole or in part
by the method specified by the Plan Administrator from time to time or by
contacting [NAME] at [PHONE
NUMBER(S)].

(b)           On or before the
exercise date specified pursuant to paragraph 4(a), Participant must fully pay
the Exercise Price and the tax withholding obligation for the Option Shares
exercised in U.S. dollars by cash or by check payable to Constellation Energy
Group, Inc.  All or a portion of the
Exercise Price and tax withholding obligation may also be paid by Participant:
(i) subject to the terms of paragraph 4(c) below, by delivery of shares of
Stock owned by Participant and acceptable to the Plan Administrator having an
aggregate Fair Market Value (as defined in paragraph 6 below) on the date of
exercise that is equal to the amount of cash that would otherwise be required;
or (ii) by authorizing a third party to sell the Option Shares (or a sufficient
portion of the Option Shares), and immediately remit to Constellation Energy
the Exercise Price and any tax withholding resulting from such exercise.  Further, tax withholding up to the minimum
required withholding rate (but not in excess of that rate) may also be
satisfied through a holdback by Constellation Energy of some of the Option
Shares that would otherwise be deliverable to Participant by reason of the
Option exercise.  The Option will cease
to be exercisable, as to the portion exercised, when Participant purchases the
Stock to which the exercised portion of the Option relates.

(c)           Other shares of Stock
owned by Participant may be delivered to satisfy the Exercise Price, or to
satisfy Participant’s tax withholding obligation above the minimum withholding
rate, only if the shares have been held by Participant for at least six months
before delivery, except that there shall be no holding period imposed for
shares purchased by Participant for cash on the open market.  Use of previously-owned shares shall be
effected by actual delivery of the Stock certificates to Constellation Energy,
and by completing an affidavit available from Constellation Energy affirming
that Participant owns the necessary shares and that any applicable holding
period has been satisfied.

(d)           Participant is required
to comply with Constellation Energy’s Insider Trading Policy at all times,
including in connection with exercise of the Option. The Option may not be
exercised by Participant during any blackout or prohibited trading period
established by Constellation Energy or applicable to Participant, nor shall the
Option be exercisable if and to the extent Constellation Energy determines that
such exercise would violate applicable state or Federal securities laws or the
rules and 

 30
 

 

regulations of any
securities exchange on which the Stock is traded.  If Constellation Energy makes such a
determination, it will use all reasonable efforts to comply with such laws,
rules or regulations.  In making any such
determinations, Constellation Energy may rely on the opinion of counsel for
Constellation Energy.

(e)           As soon as practicable
after the exercise date, Constellation Energy will deliver to Participant a
Stock certificate or certificates (or other evidence of ownership) for the
purchased Option Shares.

5.  Tax Withholding.

Constellation
Energy will have the right to withhold any applicable federal, state or local
taxes, deductions or withholdings due with respect to the Option or its
exercise in such form and manner as provided in the Plan.

6. Fair
Market Value.

The “Fair
Market Value” of a share of Stock is the average of the highest and lowest sale
price per share of Stock on the New York Stock Exchange-Composite Transactions
on the applicable date of reference, or if there are no sales on such date,
then the average of such highest and lowest sale price on the last previous day
on which sales are reported.

7. No
Rights of Stockholders.

Participant
does not have any of the rights and privileges of a stockholder of
Constellation Energy with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part, before the date
of exercise and purchase of the Option Shares.

8.
Non-Transferability of Option.

The
Option is not transferable, except for a transfer to Participant’s family member
or to a trust established for the benefit of Participant’s family members which
has been approved by the Plan Administrator as provided in the Plan, or in case
of Participant’s death, by will or the laws of descent and distribution, nor
shall the Option be subject to attachment, execution or other similar
process.  During Participant’s lifetime,
the Option is exercisable only by Participant, any guardian or legal
representative of Participant, or a family member or trustee of a trust
established for the benefit of Participant’s family members to whom the Option
has been transferred in accordance with the Plan.  In the event of (a) any attempt by
Participant to alienate, assign, pledge, hypothecate or otherwise dispose of
the Option, except as provided in this Agreement, or (b) the levy of any
attachment, execution or similar process upon the rights or interest conferred
under this Agreement, Constellation Energy may terminate the Option by notice
to Participant and it will become null and void.

 31
 

 

9. Employment
Not Affected.

Neither
this Agreement nor the grant of the Option constitutes a contract of employment
between Constellation Energy or any Subsidiary and Participant, and neither
will be deemed to be consideration for, or a condition of, continued employment
of Participant.

10.
Incorporation of Plan by Reference.

The
Option is granted pursuant to the terms of the Plan, the terms of which are
incorporated in this Agreement by reference. 
The Option will in all respects be interpreted in accordance with the
Plan.  All capitalized terms, which are
not otherwise defined in this Agreement, will have the meaning specified in the
Plan.  The Plan Administrator will
interpret and construe the Plan and this Agreement, and its interpretations and
determinations will be conclusive and binding on the parties and any other
person claiming an interest with respect to any issue arising under this
Agreement.

11.  Severability.

The
provisions of this Agreement are severable. 
If any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions will nevertheless
be binding and enforceable.

IN WITNESS
WHEREOF, Constellation Energy Group, Inc. and Participant have executed this
Stock Option Agreement effective as of the Grant Date.

	
  Constellation Energy Group,
  Inc

  	
  ACCEPTED AND AGREED TO:

  
	
   

  	
   

  
	
   

  	
   

  
	
  [NAME]

  	
  By: 

  	
   

  	
   

  
	
   

  	
  «First» «Middle» «Last»     

  	
   

  
	
  [TITLE,
  DEPARTMENT]

  	
   

  

 

 32

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