Retirement Plan - BALTIMORE GAS & ELECTRIC CO - 4-13-2000

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					Exhibit 10(m) BALTIMORE GAS AND ELECTRIC COMPANY RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS 1. Objective. The objective of this Plan is to provide Non-Employee Directors of BG&E with retirement benefits in recognition of their service on the Board of Directors of BG&E, and to assist BG&E in attracting and retaining individuals who are highly qualified to serve on the Board of Directors of BG&E. 2. Definitions. As used herein, the following terms will have the meaning specified below: "Annual Retainer" means the amount payable by BG&E to a Director as annual compensation for performance of services as a Director at the time of the Non-Employee Director's Retirement. All other amounts (including without limitation board/committee meeting fees, committee chair retainers, and expense reimbursements) shall be excluded in calculating the amount of the Annual Retainer. "BG&E" means Baltimore Gas and Electric Company, a Maryland corporation, or its successor. "Director" means a member of the Board of Directors of BG&E. "Non-Employee Director" means a Director who is not, and will never be, eligible to receive employee retirement benefits from BG&E or any affiliated company. "Plan" means the BG&E Retirement Plan for Non-Employee Directors. "Retirement" means ceases membership on the Board of Directors of BG&E. 3. Plan Administration. The Plan is administered by the Vice President Management Services of BG&E, who has sole authority (except as specified otherwise herein) to interpret the Plan, and, in general, to make all other determinations advisable for the administration of the Plan to achieve its stated objective. The Plan Administrator shall have the power to delegate all or any part of his/her duties to one or more designees, and to withdraw such authority, by written designation. 4. Eligibility and Participation. A Non-Employee Director is eligible to participate in the Plan if he/she has served as a Director of BG&E for at least five years prior to Retirement. 5. Amount and Timing of Plan Benefit Payout. An eligible participant is entitled to an annual benefit amount equal to the Annual Retainer. The Annual Retainer is payable in cash each year for life; however, no payments shall be made after a participant's death. Payment of the Annual Retainer to a participant who on his/her Retirement date is at least age 60 shall be made within the first sixty days of the applicable calendar year, beginning with the calendar year after his/her Retirement. Payment of the Annual Retainer to all other participants shall be made within the first sixty days of the applicable calendar year, 1

beginning with the calendar year after the later to occur of his/her (1) 65th birthday, or (2) Retirement. The Plan Administrator may, in his/her sole discretion, vary the manner and timing of payments to participant. 6. Copies of Plan Available. Copies of the Plan and any and all amendments thereto shall be made available to all participants during normal business hours at the office of the Plan Administrator.

beginning with the calendar year after the later to occur of his/her (1) 65th birthday, or (2) Retirement. The Plan Administrator may, in his/her sole discretion, vary the manner and timing of payments to participant. 6. Copies of Plan Available. Copies of the Plan and any and all amendments thereto shall be made available to all participants during normal business hours at the office of the Plan Administrator. 7. Amendment; Termination. This Plan may be amended from time to time or suspended or terminated at any time, at the written direction of the Board of Directors. However, amendments required to keep the Plan in compliance with applicable laws and regulations (including tax rules) may be made by the Plan Administrator, on advice of counsel. No amendment to or termination of this Plan shall prejudice the rights of any participant entitled to receive payment hereunder at the time of such action. 8. Miscellaneous. With respect to Plan benefits, a participant has the status of a general unsecured creditor of BG&E, and the Plan constitutes a mere promise by BG&E to make benefit payments in the future. It is the intention of BG&E and each participant that the Plan be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. A participant's Plan benefits shall not be subject to alienation or assignment by any participant nor shall any of them be subject to attachment or garnishment or other legal process except to the extent specially mandated and directed by applicable state or federal statute. Participation in this Plan shall not constitute a contract of employment between BG&E and any person and shall not be deemed to be consideration for, or a condition of, any person's employment by, or continual service as a Director of, BG&E or any affiliated company. This Plan shall be governed in all respects by Maryland law. 2

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED AND PREFERENCE DIVIDEND REQUIREMENTS
12 Months Ended -------------------------------------------------------------March December December December 1999 1998 1997 1996 ------------ ------------- ----------------------(In Millions o Net Income Taxes on Income Adjusted Net Income Fixed Charges: Interest and Amortization of Debt Discount and Expense and Premium on all Indebtedness Capitalized Interest Interest Factor in Rentals Total Fixed Charges $ 333.7 $ 327.7 $ 282.8 $ 310.8 $ 185.7 181.3 161.5 169.2 ------------ ------------- ----------------------519.4 $ 509.0 $ 444.3 $ 480.0 $ ------------ ------------- -----------------------

$

$

$

258.4 $ 255.3 $ 234.2 $ 203.9 $ 2.4 3.6 8.4 15.7 1.8 1.9 1.9 1.5 ------------ ------------- ----------------------262.6 $ 260.8 $ 244.5 $ 221.1 $ ------------ ------------- -----------------------

Preferred and Preference Dividend Requirements: (1) Preferred and Preference Dividends Income Tax Required Total Preferred and Preference Dividend Requirements

$

19.4 $ 21.8 $ 28.7 $ 38.5 $ 10.8 12.0 16.4 20.9 ------------ ------------- ----------------------30.2 $ 33.8 $ 45.1 $ 59.4 $ ------------ ------------- -----------------------

$

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED AND PREFERENCE DIVIDEND REQUIREMENTS
12 Months Ended -------------------------------------------------------------March December December December 1999 1998 1997 1996 ------------ ------------- ----------------------(In Millions o Net Income Taxes on Income Adjusted Net Income Fixed Charges: Interest and Amortization of Debt Discount and Expense and Premium on all Indebtedness Capitalized Interest Interest Factor in Rentals Total Fixed Charges $ 333.7 $ 327.7 $ 282.8 $ 310.8 $ 185.7 181.3 161.5 169.2 ------------ ------------- ----------------------519.4 $ 509.0 $ 444.3 $ 480.0 $ ------------ ------------- -----------------------

$

$

$

258.4 $ 255.3 $ 234.2 $ 203.9 $ 2.4 3.6 8.4 15.7 1.8 1.9 1.9 1.5 ------------ ------------- ----------------------262.6 $ 260.8 $ 244.5 $ 221.1 $ ------------ ------------- -----------------------

Preferred and Preference Dividend Requirements: (1) Preferred and Preference Dividends Income Tax Required Total Preferred and Preference Dividend Requirements

$

19.4 $ 21.8 $ 28.7 $ 38.5 $ 10.8 12.0 16.4 20.9 ------------ ------------- ----------------------30.2 $ 33.8 $ 45.1 $ 59.4 $ ------------ ------------- -----------------------

$

Total Fixed Charges and Preferred and Preference Dividend Requirements $

292.8 $ 294.6 $ 289.6 ============ ============= ============ 779.6 $ 766.2 $ 680.4 ============ ============= ============

$

280.5 ============ 685.4 ============

$ = $ =

Earnings (2)

$

$

Ratio of Earnings to Fixed Charges Ratio of Earnings to Combined Fixed Charges and Preferred and Preference Dividend Requirements

2.97

2.94

2.78

3.10

2.66

2.60

2.35

2.44

(1) Preferred and preference dividend requirements consist of an amount equal to the pre-tax earnings that would be required to meet dividend requirements on preferred stock and preference stock. (2) Earnings are deemed to consist of net income that includes earnings of BGE's consolidated subsidiaries, equity in the net income of BGE's unconsolidated subsidiary, income taxes (including deferred income taxes and investment tax credit adjustments), and fixed charges other than capitalized interest.

ARTICLE UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSTELLATION ENERGY'S MARCH 31, 1999 INTERIM CONSOLIDATED INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS. MULTIPLIER: 1,000,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END BOOK VALUE TOTAL NET UTILITY PLANT

3 MOS DEC 31 1999 JAN 01 1999 MAR 31 1999 PER BOOK 5,640

ARTICLE UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSTELLATION ENERGY'S MARCH 31, 1999 INTERIM CONSOLIDATED INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS. MULTIPLIER: 1,000,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END BOOK VALUE TOTAL NET UTILITY PLANT OTHER PROPERTY AND INVEST TOTAL CURRENT ASSETS TOTAL DEFERRED CHARGES OTHER ASSETS TOTAL ASSETS COMMON CAPITAL SURPLUS PAID IN RETAINED EARNINGS TOTAL COMMON STOCKHOLDERS EQ PREFERRED MANDATORY PREFERRED LONG TERM DEBT NET SHORT TERM NOTES LONG TERM NOTES PAYABLE COMMERCIAL PAPER OBLIGATIONS LONG TERM DEBT CURRENT PORT PREFERRED STOCK CURRENT CAPITAL LEASE OBLIGATIONS LEASES CURRENT OTHER ITEMS CAPITAL AND LIAB TOT CAPITALIZATION AND LIAB GROSS OPERATING REVENUE INCOME TAX EXPENSE OTHER OPERATING EXPENSES TOTAL OPERATING EXPENSES OPERATING INCOME LOSS OTHER INCOME NET INCOME BEFORE INTEREST EXPEN TOTAL INTEREST EXPENSE NET INCOME PREFERRED STOCK DIVIDENDS EARNINGS AVAILABLE FOR COMM COMMON STOCK DIVIDENDS TOTAL INTEREST ON BONDS CASH FLOW OPERATIONS EPS BASIC EPS DILUTED

3 MOS DEC 31 1999 JAN 01 1999 MAR 31 1999 PER BOOK 5,640 1,708 1,348 588 0 9,284 1,493 0 1,510 3,006 0 190 3,136 0 0 0 248 7 0 0 2,697 9,284 932 50 734 784 148 (1) 147 61 86 3 83 63 62 321 0.55 0.55

Exhibit 99(a) SUMMARIZED PRO FORMA FINANCIAL INFORMATION RELATED TO THE FORMATION OF A HOLDING COMPANY
Pro ------------------BGE Consolidated Pro Forma BGE Historical Adjustments(1) Consolidated -------------------------------------------------------------(In Millions, Except Per Share Amounts) BALANCE SHEETS -- AS OF MARCH 31, 1999 (Unaudited) ASSETS Current assets Investments and other assets Net utility plant Deferred charges $ 1,348.0 1,707.4 5,640.0 588.2 $ (698.7) (1,335.7) (7.4) $ 649.3 371.7 5,640.0 580.8

Exhibit 99(a) SUMMARIZED PRO FORMA FINANCIAL INFORMATION RELATED TO THE FORMATION OF A HOLDING COMPANY
Pro ------------------BGE Consolidated Pro Forma BGE Historical Adjustments(1) Consolidated -------------------------------------------------------------(In Millions, Except Per Share Amounts) BALANCE SHEETS -- AS OF MARCH 31, 1999 (Unaudited) ASSETS Current assets Investments and other assets Net utility plant Deferred charges $ 1,348.0 1,707.4 5,640.0 588.2 ---------------$ 9,283.6 ================ $ (698.7) (1,335.7) (7.4) -----------------$ (2,041.8) ================== $ 649.3 371.7 5,640.0 580.8 -----------------$ 7,241.8 ==================

TOTAL ASSETS

LIABILITIES AND CAPITALIZATION Current liabilities Deferred credits and other liabilities Capitalization Long-term debt Preference stock not subject to mandatory redemption Common Shareholders' Equity

$ 1,212.9 1,739.0

$ (499.6) (290.3)

$ 713.3 1,448.7

3,135.9 190.0 3,005.8 ---------------6,331.7 ----------------

(627.3) (624.6) -----------------(1,251.9) ------------------

2,508.6 190.0 2,381.2 -----------------5,079.8 ------------------

TOTAL CAPITALIZATION

TOTAL LIABILITIES AND CAPITALIZATION

$ 9,283.6 ================

$ (2,041.8) ==================

$ 7,241.8 ==================

STATEMENTS OF INCOME -THREE MONTHS ENDED MARCH 31, 1999 (Unaudited) Total revenues Total expenses other than interest and income taxes $ 932.3 734.2 ---------------198.1 (0.8) 61.2 ---------------136.1 49.9 ---------------86.2 $ (223.4) (180.6) -----------------(42.8) 4.1 (13.6) -----------------(25.1) (10.0) -----------------$ (15.1) ================== $ 708.9 553.6 -----------------155.3 3.3 47.6 -----------------111.0 39.9 -----------------$ 71.1 ================== $ 3.4 ==================

Income from operations Other income (expense) Net interest expense Preference stock dividends of BGE

Income before income taxes Income taxes

Net income

Preference stock dividends

3.4 ---------------$ 82.8 ================ $ 0.55 ================

Earnings applicable to common stock

Earnings per common share

(1) Reflects the transfer of Constellation Enterprises, Inc. and its subsidiaries from BGE to Constellation Energy

(1) Reflects the transfer of Constellation Enterprises, Inc. and its subsidiaries from BGE to Constellation Energy in connection with the formation of the holding company. (2) Reflects dividends associated with BGE preference stock as a charge against retained earnings for BGE and as a charge against net income for Constellation Energy.

Exhibit 99(b) Extract From Post-Effective Amendment No. 1 to Form S-4 THE COMPARATIVE SHAREHOLDER RIGHTS After the share exchange, BGE common shareholders will become Constellation Energy common shareholders, and their rights will be governed by Constellation Energy's charter and by-laws rather than BGE's charter and bylaws. Constellation Energy's charter and by-laws differ from BGE's in certain respects. The differences in Constellation Energy's charter and by-laws reflect the: (1) removal of obsolete and unnecessary provisions; (2) inclusion of provisions that provide flexibility to operate in a competitive market; and (3) inclusion of provisions that provide additional financing flexibility. Approval of the share exchange will also be considered approval and ratification of Constellation Energy's charter and by-laws. For more information, please refer to the forms of the charter and by-laws that are included as appendices B and C in Post-Effective Amendment No. 1 to Form S-4 (Registration No. 33-64799). The table below compares some of the rights provided to BGE and Constellation Energy shareholders under their respective charters and by-laws, under Securities and Exchange Commission (SEC) rules, and Maryland law:
RIGHT ----Voting rights for BGE --Superior voting rights CONSTELLATION ENERGY -------------------No superior voting rights

preferred shareholders (Four votes per share) (One vote per share) Call of special meeting Permitted by 25% of votes Permitted by 25% of votes entitled to be cast entitled to be cast Shareholder action by written consent Permitted Permitted Removal of directors by Permitted by majority vote Permitted by majority vote shareholders for cause
Advance notice of shareholder proposals Proxy Proposals -120 days Meeting Proposals -45 days Permitted by two-thirds vote Proxy Proposals -120 days Meeting Proposals -75 days Permitted by two-thirds vote(Board may provide for lesser number) Permitted by two-thirds vote

Charter amendments by common shareholders

By-law amendments by common shareholders

Permitted by majority vote

The differences between BGE's and Constellation Energy's charter and by-laws are summarized below: AUTHORIZED SHARES BGE. BGE has authorized: o 175,000,000 shares of common stock,

Exhibit 99(b) Extract From Post-Effective Amendment No. 1 to Form S-4 THE COMPARATIVE SHAREHOLDER RIGHTS After the share exchange, BGE common shareholders will become Constellation Energy common shareholders, and their rights will be governed by Constellation Energy's charter and by-laws rather than BGE's charter and bylaws. Constellation Energy's charter and by-laws differ from BGE's in certain respects. The differences in Constellation Energy's charter and by-laws reflect the: (1) removal of obsolete and unnecessary provisions; (2) inclusion of provisions that provide flexibility to operate in a competitive market; and (3) inclusion of provisions that provide additional financing flexibility. Approval of the share exchange will also be considered approval and ratification of Constellation Energy's charter and by-laws. For more information, please refer to the forms of the charter and by-laws that are included as appendices B and C in Post-Effective Amendment No. 1 to Form S-4 (Registration No. 33-64799). The table below compares some of the rights provided to BGE and Constellation Energy shareholders under their respective charters and by-laws, under Securities and Exchange Commission (SEC) rules, and Maryland law:
RIGHT ----Voting rights for BGE --Superior voting rights CONSTELLATION ENERGY -------------------No superior voting rights

preferred shareholders (Four votes per share) (One vote per share) Call of special meeting Permitted by 25% of votes Permitted by 25% of votes entitled to be cast entitled to be cast Shareholder action by written consent Permitted Permitted Removal of directors by Permitted by majority vote Permitted by majority vote shareholders for cause
Advance notice of shareholder proposals Proxy Proposals -120 days Meeting Proposals -45 days Permitted by two-thirds vote Proxy Proposals -120 days Meeting Proposals -75 days Permitted by two-thirds vote(Board may provide for lesser number) Permitted by two-thirds vote

Charter amendments by common shareholders

By-law amendments by common shareholders

Permitted by majority vote

The differences between BGE's and Constellation Energy's charter and by-laws are summarized below: AUTHORIZED SHARES BGE. BGE has authorized: o 175,000,000 shares of common stock, o 1,000,000 shares of preferred stock, and o 6,500,000 shares of preference stock. CONSTELLATION ENERGY. Constellation Energy has authorized: o 250,000,000 shares of common stock, and o 25,000,000 shares of preferred stock.

PREFERRED STOCK BGE. BGE's charter authorizes both preferred and preference stock. The charter specifies, among other things: o the number of votes per share (4 votes per share for preferred and 1 vote per share for preference), o matters preferred and preference shareholders may vote on, o a limit on the amount of dividends that are payable on the preferred stock, and o certain financial tests that must be met before the preferred or preference stock may be issued. 1

The charter allows BGE's Board of Directors to specify the other rights and terms of both types of stock, such as redemption and convertibility provisions. CONSTELLATION ENERGY. Constellation Energy's charter authorizes only preferred stock. It specifies that the preferred stock will have no more than one vote per share, as determined by the Board. The Board will determine the other terms of any preferred stock at the time of issuance. Constellation Energy will not issue preferred stock as a defensive takeover mechanism without prior shareholder approval and will not afford preferred shareholders voting rights superior (including votes per share) to common shareholders. VOTE REQUIRED TO PASS CERTAIN MATTERS BGE. The approval of two-thirds of all the votes entitled to be cast must be received to approve charter amendments and certain extraordinary matters such as mergers, share exchanges and the sale of substantially all of BGE's assets. CONSTELLATION ENERGY. The approval of two-thirds of all the votes entitled to be cast must be received to approve charter amendments and certain extraordinary matters such as mergers, share exchanges and the sale of substantially all of Constellation Energy's assets. However, the Board may authorize that such a matter be approved by a majority of all the votes entitled to be cast. REMOVAL OF DIRECTORS BGE. Under BGE's by-laws, the shareholders, at any meeting duly called and at which a quorum is present, may remove any director from office by a majority vote. CONSTELLATION ENERGY. Under Constellation Energy's charter, the shareholders, at any meeting duly called and at which a quorum is present, may remove any director from office for cause by a majority vote. AMENDING THE BY-LAWS BGE. BGE's by-laws may be amended or repealed, and new by-laws adopted, by a majority vote of the Board of Directors or the common shareholders. CONSTELLATION ENERGY. Constellation Energy's by-laws may be amended or repealed, and new by-laws adopted by a majority vote of the Board of Directors or by a two-thirds vote of the common shareholders. ADVANCE NOTICE PROVISION BGE. Neither BGE's charter nor its by-laws include a provision with respect to advance notice of shareholder proposals or director nominations. Under SEC rules, shareholder proposals must be received at least 120 days prior to the anniversary of the date that the prior year's proxy statement was mailed to shareholders in order to be considered for inclusion in the proxy statement. Other proposals sought to be presented at the shareholders' meeting must be received at least 45 days prior to the anniversary of the date that the prior year's proxy statement was mailed to shareholders. CONSTELLATION ENERGY. The SEC rule requiring 120 days advance notice of shareholder proposals sought to be included in the proxy statement will also apply to Constellation Energy. In addition, under

The charter allows BGE's Board of Directors to specify the other rights and terms of both types of stock, such as redemption and convertibility provisions. CONSTELLATION ENERGY. Constellation Energy's charter authorizes only preferred stock. It specifies that the preferred stock will have no more than one vote per share, as determined by the Board. The Board will determine the other terms of any preferred stock at the time of issuance. Constellation Energy will not issue preferred stock as a defensive takeover mechanism without prior shareholder approval and will not afford preferred shareholders voting rights superior (including votes per share) to common shareholders. VOTE REQUIRED TO PASS CERTAIN MATTERS BGE. The approval of two-thirds of all the votes entitled to be cast must be received to approve charter amendments and certain extraordinary matters such as mergers, share exchanges and the sale of substantially all of BGE's assets. CONSTELLATION ENERGY. The approval of two-thirds of all the votes entitled to be cast must be received to approve charter amendments and certain extraordinary matters such as mergers, share exchanges and the sale of substantially all of Constellation Energy's assets. However, the Board may authorize that such a matter be approved by a majority of all the votes entitled to be cast. REMOVAL OF DIRECTORS BGE. Under BGE's by-laws, the shareholders, at any meeting duly called and at which a quorum is present, may remove any director from office by a majority vote. CONSTELLATION ENERGY. Under Constellation Energy's charter, the shareholders, at any meeting duly called and at which a quorum is present, may remove any director from office for cause by a majority vote. AMENDING THE BY-LAWS BGE. BGE's by-laws may be amended or repealed, and new by-laws adopted, by a majority vote of the Board of Directors or the common shareholders. CONSTELLATION ENERGY. Constellation Energy's by-laws may be amended or repealed, and new by-laws adopted by a majority vote of the Board of Directors or by a two-thirds vote of the common shareholders. ADVANCE NOTICE PROVISION BGE. Neither BGE's charter nor its by-laws include a provision with respect to advance notice of shareholder proposals or director nominations. Under SEC rules, shareholder proposals must be received at least 120 days prior to the anniversary of the date that the prior year's proxy statement was mailed to shareholders in order to be considered for inclusion in the proxy statement. Other proposals sought to be presented at the shareholders' meeting must be received at least 45 days prior to the anniversary of the date that the prior year's proxy statement was mailed to shareholders. CONSTELLATION ENERGY. The SEC rule requiring 120 days advance notice of shareholder proposals sought to be included in the proxy statement will also apply to Constellation Energy. In addition, under Constellation Energy's by-laws, written notice of a proposal to be presented by any shareholder at the shareholders' meeting (including nominations for director) must be received by the Secretary of Constellation Energy at its principal executive office not less than 75 days prior to the anniversary of the date the proxy statement was mailed for the prior year's annual meeting (if the share exchange is approved, the anniversary of the mail date for Constellation Energy's first annual meeting will be March 5, 2000). If the proposal is not timely received, the shareholder may not present it at the annual meeting. See "Submission of Shareholder Proposals for Next Year" on page 38. The additional 30 day time period has been added to ensure that Constellation Energy has sufficient time to inform all shareholders, in the proxy statement, of the matter sought to be presented at the meeting. 2

MARYLAND LAW Certain provisions of Maryland law provide enhanced rights to shareholders, including the right of holders of at least 25% of the outstanding common stock to call a special meeting of shareholders for any purpose and the right to take action by way of unanimous written consent without calling a special meeting of shareholders. However, certain other provisions of Maryland law may have the effect of discouraging persons from acquiring large blocks of a Maryland corporation's stock and/or delaying or preventing a change of control of a Maryland corporation. Under certain circumstances, these provisions could have the effect of, among other things: o reducing or eliminating the voting power of a 20% or more shareholder, o prohibiting a 10% or more shareholder from engaging in a business combination with a Maryland corporation for five years following the acquisition of the 10% stake (a "freezeout" provision), and o requiring a premium payment for shares purchased in a two-step acquisition. Friendly mergers and other business combinations would not be affected by these provisions. However, a Maryland corporation may opt out of the provisions by providing so in its charter or by-laws. An amendment adopted for the purpose of opting out of the freeze-out provision does not become effective until 18 months after its adoption. Neither BGE nor Constellation Energy have opted out of the provisions. 3

MARYLAND LAW Certain provisions of Maryland law provide enhanced rights to shareholders, including the right of holders of at least 25% of the outstanding common stock to call a special meeting of shareholders for any purpose and the right to take action by way of unanimous written consent without calling a special meeting of shareholders. However, certain other provisions of Maryland law may have the effect of discouraging persons from acquiring large blocks of a Maryland corporation's stock and/or delaying or preventing a change of control of a Maryland corporation. Under certain circumstances, these provisions could have the effect of, among other things: o reducing or eliminating the voting power of a 20% or more shareholder, o prohibiting a 10% or more shareholder from engaging in a business combination with a Maryland corporation for five years following the acquisition of the 10% stake (a "freezeout" provision), and o requiring a premium payment for shares purchased in a two-step acquisition. Friendly mergers and other business combinations would not be affected by these provisions. However, a Maryland corporation may opt out of the provisions by providing so in its charter or by-laws. An amendment adopted for the purpose of opting out of the freeze-out provision does not become effective until 18 months after its adoption. Neither BGE nor Constellation Energy have opted out of the provisions. 3