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Constellation deal doesn’t have change of control payments

A few years ago, during the last effort to sell Constellation Energy Group Inc., CEO Mayo A. Shattuck III stood to make nearly $50 million under a clause in his employment contract dealing with change of ownership at the company.

But officials said Thursday that will not be the case if the proposed acquisition of Constellation by Chicago-based Exelon Corp. closes in early 2012, as scheduled.

“We have no change of control agreements and no employment contracts,” Shattuck said during a news conference at Constellation’s downtown Baltimore headquarters.

So-called “change of control” provisions for Constellation executives have been high-visibility targets of politicians over the last six years. In previous merger talks with Florida Power & Light in 2006 and MidAmerican Energy in 2008, top executives at Constellation stood to make from $2.75 million to upwards of $47 million if the deal was consummated and they were shown the door.

The change of control agreements went away in December 2009, but according to a filing with the Securities and Exchange Commission this month, if the deal is completed Shattuck will still benefit.

The way Shattuck’s pay is structured, stock options are vested over a three-year period and are pegged to the company’s performance. A change of control however, such as what would happen if the deal is successfully completed, “accelerates” those stock awards so they vest immediately.

In this case, Shattuck has roughly $20.5 million in stock awards that would vest under a change of control. That figure though is an estimate based on the $30.63 stock price on Dec. 31, 2010.

Three other executives at Constellation — Chief Financial Officer Jonathon W. Thayer, Constellation Energy Nuclear Group CEO Henry B. Barron and Senior Vice President Kathleen W. Hyle, would see stock awards vest automatically if the deal is completed, according to the filing. The value of those awards range from $1.7 million to $3.1 million.