Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of the 12th day of
November, 2002 by and among OLD DOMINION ELECTRIC COOPERATIVE, a generation and
transmission electric cooperative organized under the laws of the Commonwealth
of Virginia (“Old Dominion”), and VIRGINIA, MARYLAND AND DELAWARE ASSOCIATION OF
ELECTRIC COOPERATIVES, a non-stock corporation organized under the laws of the
Commonwealth of Virginia (“the Association”) (collectively, the “Employer”), and
Jackson E. Reasor, Jr. (the “Executive”).
 
In consideration of the mutual covenants contained herein, Employer and
Executive agree as follows:
 
1.        Employment.    Employer agrees to employ Executive and Executive
agrees to continue in the employ of Employer on the terms and conditions
hereinafter set forth.
 
2.         Capacity.    Executive shall serve Employer as President and Chief
Executive Officer of Old Dominion and the Association, with such powers and
duties as may be prescribed from time to time by Employer, which duties shall
include, without limitation, strategic and long range planning for, and
oversight of the day to day operations of, Employer. Executive’s continued
employment with Employer is conditioned upon performance and results as set
forth herein.
 
3.        Effective Date and Term.    The commencement date of this Agreement
shall be as of November 23, 2002 (the “Commencement Date”). Subject to the
provisions of Section 6, the term of Executive’s employment hereunder shall be
for four (4) years from the Commencement Date, and shall be automatically
extended for an additional one year period unless either the Executive or the
Employer gives written notice 30 days prior the Expiration Date of such party’s
election not to extend the terms of this Agreement. Such four-year period, as
extended shall hereafter be referred to as the “Term.” The last day of the Term
is herein sometimes referred to as the “Expiration Date.”
 
4.         Compensation and Benefits.    The regular compensation and benefits
payable to Executive under this Agreement shall be as follows:
 
    (a)        Salary.    For all services rendered by Executive under this
Agreement, Employer shall pay Executive a salary at the rate of $300,000 per
year. Executive’s salary shall be payable bi-weekly, in accordance with
Employer’s usual practice for its officers. Performance reviews shall be
conducted every twelve months. Salary adjustments shall be considered at each
twelve-month anniversary and shall be awarded at the discretion of the Board of
Directors of Employer.
 
    (b)        Regular Benefits.    Executive shall also be entitled to
participate in all benefit plans available to employees of Employer, all as more
specifically outlined in the Employee Benefits Package (a copy of which has been
provided to Executive), including medical insurance, basic life insurance,
long-term disability, retirement and security plans,

--------------------------------------------------------------------------------

 
savings plans (401K), business travel accident insurance, exercise club
privileges and other benefit plans that may from time to time be approved or in
effect for senior executives of Employer. Such participation shall be subject to
(i) the terms of the applicable plan documents, (ii) generally applicable
policies of Employer and (iii) the discretion of the Boards of Directors of
Employer or the administrative or other committee provided for in or
contemplated by such plan. Such benefits shall be subject to review, alteration
and/or cancellation in the discretion of the Board of Directors of Employer, in
accordance with the usual practice of Employer with respect to review of
benefits for its officers.
 
    (c)        Bonus Availability.    Executive may be eligible for an annual
bonus based on the criteria established by the Board which shall be determined
on an annual basis. Such bonus shall be at the discretion of the Board of
Directors.
 
    (d)        Business Expenses.    Employer shall reimburse Executive for all
reasonable travel and other business expenses incurred by him in the performance
of his duties and responsibilities, subject to such reasonable requirements with
respect to substantiation and documentation as may be specified by Employer.
 
    (e)         Vacation and Sick Leave.    Executive shall be entitled to five
(5) weeks of vacation during each calendar year commencing January 1, 2003.
Executive’s sick leave accrual shall follow the standard sick leave policy.
 
    (f)         Automobile.    Employer shall provide Executive, for his
personal use, a new, American-made sedan at a cost not to exceed $30,000.
Replacement of the vehicle during the Term of the Agreement shall be at the
discretion of the Board of Directors of Employer. “Personal use” excludes all
non-business use by individuals other than Executive except in the case of an
emergency. Such personal use of the vehicle shall be permitted in and around the
greater Richmond area. Executive shall be responsible for paying the tax on
income attributable to the provision of such vehicle.
 
5.         Extent of Service.    During his employment hereunder, Executive
shall, subject to the discretion and supervision of the Boards of Directors of
Employer, devote his full business time, best efforts and business judgment,
skill and knowledge to the advancement of Employer’s interest and to the
discharge of his duties and responsibilities hereunder. He shall not engage in
any other business activity, except as may be approved by the Boards of
Directors of Employer. “Business activity” shall not include Executive’s
investment or ownership in publicly held corporations or entities whose
securities are tracked on recognized national or regional stock exchanges;
provided such investment or ownership is at all times during the term of this
agreement less than 5% of the outstanding shares of said corporation or entity.
 
6.         Termination and Termination Benefits.
 
            Notwithstanding the provisions of Section 3, Executive’s employment
hereunder shall terminate under the following circumstances and shall be subject
to the following provisions:

2

--------------------------------------------------------------------------------

 
    (a)        Death.    In the event of Executive’s death during Executive’s
employment hereunder, Executive’s employment shall terminate on the date of his
death without further liability on the part of the Employer under this
Agreement.
 
    (b)        Termination by Employer for Cause.    Executive’s employment
hereunder may be terminated without further liability on the part of Employer
effective immediately by a majority vote of the Boards of Directors of Employer
for Cause by written notice to Executive setting forth in reasonable detail the
nature of such Cause. Only the following shall constitute “Cause” for such
termination:
 
        (i)    gross incompetence, insubordination, gross negligence, willful
misconduct in office or breach of a material fiduciary duty, which includes a
breach of confidentiality as defined in Section 8(b), owed to Employer or any
subsidiary or affiliate thereof;
 
        (ii)    conviction of a felony, a crime of moral turpitude or commission
of an act of embezzlement or fraud against Employer or any subsidiary or
affiliate thereof;
 
        (iii)    Executive’s material failure to perform a substantial portion
of his duties and responsibilities hereunder; but only after Employer provides
Executive written notice of such failure and gives him thirty (30) days to
remedy the situation.
 
        (iv)    deliberate dishonesty of Executive with respect to Employer or
any subsidiary or affiliate thereof.
 
    (c)         Termination by Executive.    Executive may terminate his
employment hereunder with or without Good Reason (as defined below) by written
notice to the Boards of Directors of Employer effective 30 days after receipt of
such notice by the Boards of Directors. In the event that Executive terminates
his employment hereunder for Good Reason, Executive shall be entitled to the
salary specified in Section 6(e). Executive shall not be required to render any
further services to Employer. Upon termination of employment by Executive
without Good Reason, Executive shall be entitled to no further compensation
under this Agreement. “Good Reason” shall be the failure by Employer to comply
with the provisions of Section 4(a) or material breach by Employer of any other
provision of this Agreement, which failure or breach shall continue for more
than 30 days after the date on which the Boards of Directors of Employer
receives such notice.
 
    (d)        Termination by Employer Without Cause.    Executive’s employment
with Employer may be terminated without Cause by a majority of each of the
Boards of Directors of Employer, effective immediately upon delivery of written
notice of such termination to Executive.
 
    (e)         Certain Termination Payments.    In the event of termination of
Executive’s employment hereunder by Employer without Cause or by Executive with
Good Reason, Executive shall be entitled to the following:
 
        (i)    For and during the one-year period immediately following the date
of termination, Employer shall continue to pay Executive a salary at the rate in
effect on the date

3

--------------------------------------------------------------------------------

 
of termination. Payment of such salary shall be made on the same periodic date
as salary payments would have been made to Executive had he not been terminated.
Employer shall also provide medical insurance to Executive for this one year
period on the same basis as if Executive were still employed, except that
Employer’s obligation to provide such medical insurance shall cease if Executive
becomes eligible for such coverage by virtue of his employment with another
company or entity.
 
            (ii)    In the event that Executive becomes employed in any capacity
during the one-year period immediately following the date of termination,
Employer’s obligation to pay Executive’s salary pursuant to Section 6(e)(i)
hereof shall be reduced by the amount of Executive’s compensation at his new
employer.
 
        (f)        Expiration Payments.    In the event the Executive’s
employment is not continued with Employer beyond the Expiration Date on mutually
agreeable terms and conditions, the Employer shall continue to pay Executive a
salary at the rate in effect at the Expiration Date for a period of six months
on the same periodic dates as salary payments would have been made to Executive
had his employment continued. The provisions set forth in Section 6(e)(ii) also
apply to the six-month post-expiration period.
 
        (g)        Litigation and Regulatory Cooperation.    Executive shall
cooperate fully with Employer in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future against or on
behalf of Employer that relate to events or occurrences that transpired while
Executive was employed by Employer. Executive’s full cooperation in connection
with such claims or actions shall include, but not be limited to, being
available to meet with counsel to prepare for discovery or trial and to act as a
witness on behalf of Employer at mutually convenient times. Executive shall also
cooperate fully with Employer in connection with any examination or review of
any federal or state regulatory authority as any such examination or review
relates to events or occurrences that transpired when Executive was employed by
Employer. If such cooperation is required after Executive ceases to be employed
by Employer, Employer shall pay Executive for such cooperation at fee of
seventy-five dollars ($75) per hour, payable monthly in arrears, and will
reimburse Executive for any reasonable out-of-pocket expenses incurred in
connection therewith.
 
7.        Disability.    If, due to physical or mental illness, Executive shall
be disabled so as to be unable to perform substantially all of his duties and
responsibilities hereunder, which disability lasts for more than an
uninterrupted period of at least 180 days or a total of at least 240 days in any
calendar year (as determined by the opinion of an independent physician selected
by the Boards of Directors of the Company), Employer, acting through its Boards
of Directors, may designate another executive to act in his place without
further liability under this Agreement except for those continuing obligations
imposed upon Employer pursuant to its long-term disability plan.
 
8.        Noncompetition and Confidential Information.
 
    (a)    Noncompetition.    During a period of one year following the date of
termination of Executive’s employment with Employer occasioned by a failure to
extend employment beyond the Expiration Date or termination by Employer for
Cause pursuant to

4

--------------------------------------------------------------------------------

 
Section 6(b) hereof, or by Executive in the event that such termination is not
for Good Reason, Executive will not, directly or indirectly, whether as owner,
partner, shareholder, consultant, agent, employee, co-venturer or otherwise, or
through any Person (as defined in Section 10), compete in Delaware, Maryland or
Virginia or any other state contiguous to Virginia, Maryland, or Delaware during
the period in which this covenant of Noncompetition is in effect, with
Employer’s business of marketing and provision of electricity and electrical
services or any other business conducted by Employer during the period of
Executive’s employment hereunder, nor will he attempt to hire any employee of
Employer, assist in such hiring by any other Person, or solicit or encourage any
customer of Employer to terminate its relationship with Employer or to conduct
with any other Person any business or activity that such customer conducts or
could conduct with Employer.
 
    (b)        Confidential Information.    Executive agrees and acknowledges
that, by reason of his employment by and service to Employer, he will have
access to confidential information of Employer (and its affiliates, vendors,
customers, and others having business dealings with it) including, without
limitation, information and knowledge pertaining to products, sales and profit
figures, customer and client lists and information related to relationships
between Employer and its affiliates, customers, vendors, and others having
business dealings with it (collectively, the “Confidential Information”).
Executive acknowledges that the Confidential Information is a valuable and
unique asset of Employer (and its affiliates, vendors, customers, and others
having business dealings with it) and covenants that, both during and after the
term of his employment by Employer, he will not disclose any Confidential
Information to any person or use any Confidential Information (except as his
duties as an employee of Employer may require) without the prior written
authorization of the Boards of Directors of Employer. Executive further agrees
that all files, letters, memoranda, reports, records, data, sketches, drawings,
program listings or other written, photographic, or other tangible materials
containing Confidential Information, whether created by Executive or others,
that shall come into his custody or possession, shall be delivered to Employer,
upon the earlier of (i) a request by employer or (ii) termination of Executive’s
employment. After such delivery, Executive shall not retain any such records or
copies thereof or any such tangible property. The obligation of confidentiality
imposed by this Section shall not apply to information that is required by law,
regulation or judicial or governmental authorities to be disclosed or that
otherwise becomes part of the public domain by means other than Executive’s
non-observance of his obligations hereunder.
 
    (c)        Rights and Remedies Upon Breach.    If Executive breaches, or
threatens to commit a breach of, any of provisions of Section 8 hereof
(collectively, the “Restrictive Covenants”), Employer shall have the following
rights and remedies, each of which shall be independent of the other and
severally enforceable, and all of which shall be in addition to, and not in lieu
of, any other rights and remedies available to Employer under law or in equity:
 
        (i)    Specific Performance.    Executive recognizes and agrees that the
violation of the Restrictive Covenants may not be reasonably or adequately
compensated in damages and that, in addition to any other relief to which
Employer may be entitled by reason of such violation, it shall also be entitled
to injunctive and equitable relief and, pending determination of any dispute
with respect to such violation, no bond or security shall be required in
connection herewith. If any dispute arises with respect to this Section 8,
without limiting in

5

--------------------------------------------------------------------------------

 
any way any other rights or remedies to which Employer may be entitled,
Executive agrees that the Restrictive Covenants shall be enforceable by a decree
of specific performance.
 
        (ii)    Accounting.    Employer shall have the right and remedy to
require Executive to account for any pay over to Employer all compensation,
profits, monies, accruals, increments or other benefits (collectively,
“Benefits”) derived or received by Executive as a result of any transactions
constituting a breach of any of the Restrictive Covenants, and Executive shall
account for and pay overall such Benefits to the Company.
 
    (d)    Severability of Covenants.    If any of the Restrictive Covenants, or
any part thereof, or any of the other provisions of this Section 8 is held by a
court of competent jurisdiction or any other governmental authority to be
invalid, void, unenforceable or against public policy for any reason, the
remainder of the Restrictive Covenants or such other provisions shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and such court or authority shall be empowered to substitute, to the extent
enforceable, provisions similar thereto or other provisions so as to provide to
Employer, to the fullest extent permitted by applicable law, the benefits
intended by such provisions.
 
    (e)    Definition and Survival.    For purposes of this Section 8 only, the
term “Employer” shall mean Old Dominion and the Association, and any subsidiary
and affiliate of the Old Dominion and the Association. All provisions of this
Section 8 shall survive termination of this Agreement.
 
9.        Conflicting Agreements.    Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or by which he is bound, and that he is not subject to any covenants
against competition or similar covenants that would affect the performance of
his obligations hereunder.
 
10.        Definition of “Person”.    For all purposes of this Agreement, the
term “Person” shall mean an individual, a corporation, an association, a
partnership, an estate, a trust and any other entity or organization.
 
11.        Withholding.    All payments made by Employer under this Agreement
shall be net of any tax or other amounts required to be withheld by Employer
under applicable law.
 
12.        Assignment; Successors and Assigns, etc.    Neither Employer nor
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided, however, that Employer may assign its rights under this
Agreement without the consent of Executive in the event that Employer shall
hereafter effect a reorganization, consolidate with or merge into any other
Person, or transfer all or substantially all of its properties or assets to any
other Person. This Agreement shall inure to the benefit of and be binding upon
Employer and Executive, their respective successors, executors, administrators,
heirs and permitted assigns. In the event of Executive’s death prior to the
completion by Employer of all payments due him under this

6

--------------------------------------------------------------------------------

 
Agreement, Employer shall continue such payments to Executive’s beneficiary
designated in writing to Employer prior to his death (or to his estate, if he
fails to make such designation).
 
13.      Enforceability.    If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
 
14.      Waiver.    No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any part to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
 
15.      Notices.    Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid (in which
case notice shall be deemed to have been given on the third day after mailing),
or by overnight delivery by a reliable overnight courier service (in which case
notice shall be deemed to have been given on the day after delivery to such
courier service) to Executive at the last address Executive has filed in writing
with Employer or, in the case of Employer, at the main offices of the Old
Dominion or the Association, to the attention of the Board of Directors.
 
16.      Amendment.    This Agreement may be amended or modified only by a
written instrument signed by Executive and by a duly authorized representative
of Employer.
 
17.      Governing Law.    This is a Virginia contract and shall be construed
under and be governed in all respects by the laws of the Commonwealth of
Virginia, without regard to its conflict of laws provisions.
 
18.       Entire Agreement.    This Agreement constitutes the entire
understanding among the parties, superseding any previous understandings, oral
or written, pertaining to the subject matter contained herein. No party has
relied or will rely upon any oral or other written representation or oral or
written information made or given to such party by any other party,
representative of such party or anyone acting on its behalf.
 
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

7

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
Employer, by its duly authorized officers, and by Executive, as of the date
first above written.
 
OLD DOMINION ELECTRIC COOPERATIVE
 
By:    /s/ VERNON N. BRINKLEY        
Vernon N. Brinkley
Chairman of the Board
 
Date:    11/12/02                    
 
VIRGINIA, MARYLAND AND DELAWARE
ASSOCIATION OF ELECTRIC COOPERATIVES
 
By:    /s/ GLENN F. CHAPPELL        
Glenn F. Chappell
Chairman of the Board
 
Date:    11/12/02                    
 
 
      /s/    JACKSON E. REASOR, JR.        
        Jackson E. Reasor, Jr.
 
Date:    November 12, 2002                       
 
Address:   8220 Kingsdown Ct.                
 
                  Richmond, VA 23229              

8