Exhibit 10.2

PERSONAL AND CONFIDENTIAL

 

M E M O R A N D U M

 

TO: Edgar M. Roach, Jr.                                     October 23, 2002

FROM: Anne M. Grier                                               Richmond, VA

 

Terms of Retirement

 

This memorandum sets forth the terms and conditions of your retirement.

Effective December 1, 2002 you will resign from all positions you hold as an
officer or board member of Dominion Resources or its affiliates and subsidiaries
(collectively referred to as the "Company"), except for your position as
Executive Vice President of Dominion Resources Services, Inc. You will resign
from that position effective February 1, 2003 and your employment with the
Company will then terminate and you will be considered retired.

 

Benefits Under Employment Contracts

Under the terms and conditions of your employment with the Company and the
benefits described in letter agreements dated September 15, 1995 and December
12, 2000, you are entitled upon your retirement to certain benefits as described
below:

 * In accordance with the terms of the letter agreement dated September 15, 1995
   you will be paid a lump sum severance equal to 6 months of your final base
   salary. This payment will be determined based on your salary for January
   2003, and will be paid within 30 days of your retirement date, less
   applicable withholding taxes.
 * In accordance with the terms of the letter agreement dated December 12, 2000
   you will be paid a lump sum amount equal to 6 months of your final base
   salary. This payment will be determined based on your salary for January
   2003, and will be paid within 30 days of your retirement date, less
   applicable withholding taxes.

 

The additional consideration described below will not be provided until a
properly executed General Release becomes effective and enforceable. The release
will become effective and enforceable seven days following your execution of the
General Release.

Benefits Available as Additional Consideration

Severance Payment: You will receive a lump sum payment at retirement equal to
$1,000,000, less applicable withholding taxes. This amount will be paid within
30 days of your retirement date. Stock Options: You have outstanding 360,000
non-qualified stock options granted on May 17, 1999. These options are fully
vested and exercisable. As additional consideration, you may exercise these
options until their expiration date of May 17, 2009. You have 500,000 stock
options granted on July 1, 2001. These options will become fully vested and
exercisable as of the date of your retirement, and as additional consideration,
will remain exercisable until the following expiration dates:

Percentage

Expiration Date

33-1/3% January 1, 2008

33-1/3% January 1, 2009

33-1/3% January 1, 2010

Sale of Company Stock:
After December 15, 2002 you may sell any Company stock that you own without any
forfeiture of any rights or benefits under Section 5 of the July 1, 2001 Stock
Option Agreement. However, your sales of Company stock remain subject to all
other Company trading policies for officers, including restrictions on trading
based on material nonpublic information and requirements for advance
notification of transactions.
Retirement Benefit Restoration Plan:
You will receive a benefit under the Company's Retirement Benefit Restoration
Plan calculated on the basis of age 60 and 30 years of credited service. As
additional consideration, your benefit will be calculated using your
final annual pay
. If you elect a lump sum payment, or a lump sum deferral to the Executive
Deferred Compensation Plan or the Dominion Security Option Plan (the "Deferral
Plans"), this benefit will be paid, subject to approval by the Administrative
Benefits Committee, within 30 days of the date of your retirement. Please see
Attachment A for an explanation of this benefit and the associated election
forms.
Executive Supplemental Retirement Plan:
Under the terms of the letter agreement dated April 16, 1999, you are entitled
to a lifetime benefit under the Executive Supplemental Retirement Plan at age
55. As additional consideration, the age requirement for this benefit is being
waived and you will receive a lifetime ESRP benefit as of your retirement date.
If you elect a lump sum payment or a lump sum deferral to the Deferral Plans,
this benefit will be paid or deferred, subject to approval by the Administrative
Benefits Committee, within 30 days of the date of your retirement. Please see
Attachment B for an explanation of this benefit and the associated election
forms.
Financial Planning Services:
You will receive Company-paid financial planning services for years 2003 and
2004 up to a maximum of $8,500 for each year.
COBRA Benefits (Dental & Vision):
Under the terms of the Consolidated Omnibus Budget Reconciliation Act (COBRA),
you are eligible for continued coverage under the Company's dental and vision
benefit plans for 18 months or, if earlier, until you are covered by another
group plan. After your retirement, you will automatically receive information
containing the specifics of this program, along with the proper forms in order
to elect continuation of coverage. Once you receive this material, it is very
important that you read this information and respond within the stated
guidelines, because there is only a limited amount of time to elect coverage
under the COBRA provisions. If you do not receive this material by mid-February,
please contact the Executive Compensation group. The 2002 monthly premium rates
are as follows. As an additional benefit, if you elect this coverage, the
company will pay the monthly premiums for these benefits during this 18 month
period. You will then be responsible for making premium payments when they
become due. See Attachment C.

Dental $ 25.86 (est)

Vision $ 2.04 (est)

Stock Purchase and Loan Program:
You have an outstanding loan balance of $4,749,962.22 under the Company's
Executive Stock Purchase and Loan Program. You may continue to participate in
the Program after your retirement, and you will continue to receive the
Company's interest rate subsidy for as long as you continue to hold the shares
purchased with the loan. If you wish to cease your participation, the Company
will pay for the prepayment fees and the $500 administration fee, plus as
additional consideration, provide you with a gross-up amount to cover any
related income taxes on the fees. Please see Attachment D for a detailed
explanation if you wish to cease your participation.

 

Other Employment Benefits

Restricted Stock: You have 10,000 shares of restricted stock that will vest at
the date of your retirement. The value of the shares on the vesting date
(February 1, 2003) will be taxable income to you. Applicable withholding taxes
are due and payable immediately. Please see Attachment E for your choices with
regard to the satisfaction of the withholding taxes and the disposition of the
shares.   Profit Sharing Award: You will be paid $495,000 within 30 days of your
retirement date which equals your 2002 Profit Sharing target award. In addition,
you will be paid within 30 days of your retirement date 1/12th of your 2003
Profit Sharing target award. No further payment will be made to you under this
Plan. Unused Vacation: You will receive a payment for any unused 2002 and 2003
vacation, including one personal day for 2003. Qualified Retirement Plan: You
are eligible to receive a monthly benefit under the Dominion Resources
Retirement Plan based upon your actual age at retirement (54.5 years of age),
years of service to retirement date (8.4 years of service), salary (highest 60
consecutive months during the most recent 120 months), and estimated Social
Security benefits. You cannot begin receiving a monthly benefit under this plan
until you reach age 55. Once you reach age 55, you may elect to receive your
monthly benefit in the form of either a straight life annuity, a joint & 50%
survivor annuity, a joint & 100% survivor annuity, or a Social Security leveling
annuity. You do not have to begin your annuity at age 55; you may wait until a
future date to begin receiving your monthly payments. The longer you wait before
beginning your annuity, the larger the monthly benefit amount will be. The
Retirement Income Election Form is included as part of Attachment F for use in
making your elections. Retiree Medical Plan: You are entitled to medical
coverage under the terms of the company's retiree medical plan as in effect from
time to time, and based on retirement in 2003 and a credited retirement age of
60 with 30 years of credited service. Please see Attachment G for details about
the current terms of the Company's retiree medical plan and the election forms.
Qualified Salaried Savings Plan: Since you deferred a portion of your salary to
the Savings Plan, you have an account balance available to you at retirement.
This balance will include your contributions to the plan, company matching
contributions, and earnings and/or losses associated with the investment
elections you selected. After your retirement, no further contributions (either
employee or employer contributions) can be made to your account. Your account
will continue to earn investment income based upon your investment elections.

You have several options concerning your existing account balance. The Internal
Revenue Service does not allow you to make withdrawals (other than a rollover to
an IRA or other tax-qualified plan) from a qualified savings plan without
penalty until you reach age 59 1/2, or in certain situations age 55. Any
withdrawal, whether now or at a future date, will be subject to income taxes in
the year of distribution. Please see Attachment H, titled Participant Options at
Termination, Retirement or Disability relating to the Dominion Salaried Savings
Plan. To discuss your options further, or to make a retirement distribution
election, please contact Dreyfus Retirement Services at 1-877-706-7283.

Retiree Life Insurance:
The Company will purchase a whole life insurance policy on your behalf with a
face amount equal to 75% of your 2003 annual base salary. The Company will make
the premium payments on an annual basis for seven years, after which time the
policy will be fully paid-up. These annual premium payments will be taxable
income to you, and will be reflected on a W-2 statement that will be issued by
the Company to you each year.
Company Car:
You may elect to receive your current Company car as a gift at retirement. The
value of the car will be taxable income to you. In lieu of the gift of the car,
the Company will make a lump sum cash payment to you equal to the car's value,
less applicable withholding taxes. Please see Attachment I to make your
election.
Home Sale and Relocation Expenses:
The Company will cover expenses related to the sale of your existing home and
other transfer-relocation expenses under the Company's current Transfer
Relocation Policy up to a maximum of $200,000.
Executive Deferred Compensation Plan (DCP):
You currently have a balance in your Executive Deferred Compensation Plan
account. In addition, you are eligible to receive the Company's lost matching
contribution to the Savings Plan due to the Internal Revenue Code Section
401(a)(17) limit for the plan year. A calculation will be done in January 2003
to determine the amount, if any, that you may receive under the terms of the
plan and deposited into your deferral account. You will also have

the opportunity to defer any lump sum payments for which you may qualify under
the ESRP and Benefit Restoration Plans.

Previously, you elected to receive a distribution from your account in the form
of an annuity with four (4) annual installments. With an effective retirement
date of February 1, 2003, your first installment is currently scheduled to begin
in February 2004. If you elect to defer your ESRP and/or Benefit Restoration
Plan lump sum payments into the DCP, you may complete a revised Distribution
Election Form (enclosed - Attachment J) that will apply to the entire balance in
your deferral account. If you do not submit a change on this form, your previous
election will apply to your entire account balance. After retirement, and
subject to approval of the Administrative Benefits Committee, you may change
your distribution schedule one time.

Dominion Security Option Plan (DSOP):
In addition to continuing your participation in the DCP, you have a one-time
opportunity to transfer part or all of your DCP account balance into the DSOP
(See Attachment K). Moreover, you may elect to defer your ESRP and BRP lump sum
payments into the DSOP (see Attachment K).

 

 Other Issues

 * Club Memberships:

Any club memberships (i.e. golf club memberships) that are transferred to you at
retirement will require you to pay taxes on any initiation fees that were paid
by the Company. Special Survivor Benefits: In addition to any survivor benefits
provided under specific plans, if you die before February 1, 2003, your
surviving spouse will receive the benefits described under the following
headings of this memorandum: Benefits Under Employment Contracts, Severance
Payment, Financial Planning, Restricted Stock, Profit Sharing Award (without the
2003 payment if you die before 2003), and Unused Vacation. In addition, your
surviving spouse would receive coverage under the Company's retiree medical
program and the survivor benefits under the Retirement Benefit Restoration Plan
and the Executive Supplemental Retirement Plan based on the enhanced benefits
provided in this memorandum. Indemnification: You will be provided
indemnification under the terms of Article VI of the Company's Articles of
Incorporation after your retirement. In summary, under paragraph 2,
indemnification is mandatory for any director or officer of the Company to the
full extent permitted by law and in the manner prescribed by the Virginia Stock
Corporation Act and any other applicable law. Under paragraph 6, the provisions
of Article VI apply to any claim that arises after it was adopted (April 1987),
and any amendment, modification or repeal does not diminish the rights provided
under Article VI with respect to any act or omission that occurs before the
amendment, modification or repeal. Under paragraph 7, any reference to an
officer includes a former officer. Release: Dominion Resources, Inc. and all of
its subsidiaries, affiliates, directors, officers, and employees ("Dominion")
forever waives and releases any and all claims it has or may have against you of
any kind or nature whatsoever arising from facts, assertions, circumstances,
omissions or matters occurring on or before the date hereof including all claims
arising from or relating in any way to your employment with Dominion or the
conclusion of that employment (whether such claims are presently known or are
hereafter discovered).

 

 

GENERAL RELEASE OF CLAIMS

By signing and returning one copy of this memorandum, you agree that the
payments and benefits described in this memorandum constitute a full settlement
of the Company's obligations to you under any agreements relating to your
employment. You also agree to sign and return along with this memorandum the
General Release (Attachment L), and you acknowledge that you have received
additional consideration as described in this memorandum in exchange for signing
the General Release.

Please also return all completed forms within the enclosed envelope.

 

 

 

Please feel free to call me if you have any questions about this memorandum or
your retirement.

Sincerely,

 

/s/ Anne M. Grier

Director-Executive Compensation

 

Agreed:

     /s/ Edgar M. Roach, Jr.

Edgar M. Roach, Jr.

    October 29, 20 02              

Date

 

 

 

c: Personnel File

 

Attachment L

AGREEMENT AND GENERAL RELEASE

This Agreement and General Release ("General Release") is given by Edgar M.
Roach, Jr. (the "Employee") to Dominion Resources, Inc., its subsidiaries,
affiliates, directors, officers, and employees (collectively referred to as
"Dominion"), in exchange for good and valuable consideration, the payment of
which is acknowledged by the Employee.

General Release.

Employee forever waives and releases any and all claims he has or may have
against Dominion of any kind or nature whatsoever arising from facts,
assertions, circumstances, omissions or matters occurring on or before the date
hereof, including all claims arising from or relating in any way to the
Employee's employment with Dominion or the conclusion of that employment
(whether such claims are presently known or are hereafter discovered). This
release includes, but is not limited to, a release of any claims in tort or
contract, including claims for wrongful discharge, breach of the September 15,
1995 letter agreement between the Employee and Virginia Power and/or the April
16, 1999 and the December 12, 2000 letter agreements between the Employee and
Dominion Resources, Inc. or any other agreement, contract, practice or policy.
In addition to any other claims, the Employee specifically waives, releases, and
covenants not to sue or to file any charges or administrative actions with
respect to any and all claims against Dominion, or under Title VII of the Civil
Rights Act, the Virginia Human Rights Act, the Age Discrimination in Employment
Act, the Fair Labor Standards Act, the Americans with Disability Act, the Family
and Medical Leave Act, or any other federal, state, or local law governing
employment of benefits. The Employee understands claims against Dominion.

This General Release contains a release of all claims under the Age
Discrimination in Employment Act ("ADEA") and, therefore, pursuant to the
requirements of the ADEA, the Employee acknowledges that he has been advised
that this release includes, but is not limited to, all claims under the ADEA
arising up to and including the date of execution of this release; to consult
with an attorney and or other advisor of his choosing concerning his rights and
obligations under this release; to fully consider this release before executing
it and that he has been offered ample time and opportunity, in excess of 21
days, to do so; and that this release shall become effective and enforceable 7
days following execution of this General Release by the Employee, during which
7-day period the Employee may revoke his acceptance of this General Release by
delivering written notice to Anne M. Grier at Dominion Resources Services, Inc.
at 120 Tredegar Street, Richmond, Virginia 23219.

Competition and Solicitation

Employee agrees that for a period of two years following the termination of his
employment, he will not, directly or indirectly, own, mange, operate, control,
be employed by, or advise any other business that engages in activities in
competition with Dominion in the generation, distribution or sale of energy (a)
in any state in which Dominion is at the time carrying on such business and (b)
in any state in which Dominion is at the time actively negotiating to enter the
business of the generation, distribution or sale of energy.

Employee further agrees that for a period of two years following the termination
of his

Employment, he will not solicit or attempt to solicit any employees or customers
of Dominion, orother persons or entities with or through whom Dominion has done
business, for the purpose of providing goods and services or engaging in
activities in competition with Dominion. Employee specifically agrees that for
two years following the termination of his employment (a) Employee will not
solicit, aid or encourage, directly or indirectly, any employees of Dominion to
leave Dominion or work elsewhere, and (b) Employee will not solicit, aid or
encourage, directly or indirectly, any of Dominion's customers to move their
business from Dominion or to place business elsewhere.

3. Confidentiality.

Employee agrees to keep confidential and not disclose or make use of any
Confidential

Information received during or as a result of his prior services to the Company,
except as permitted in writing by the Chief Financial Officer of Dominion
Resources, Inc. or as ordered by a court of competent jurisdiction. For purposes
of this Agreement and General Release, Confidential Information is information
about the Company or its affiliates which might reasonably be considered to be
(i) confidential, (ii) adverse to the interest of the Company or its affiliates,
(iii) information concerning the Company's business, business or strategic
plans, or business practices that others in its industry do not generally know,
or (iv) a trade secret.

4. Miscellaneous.

To the extent not governed by federal law, this General Release will be
construed in accordance with the laws of the Commonwealth of Virginia, without
reference to its conflict of laws rules. No provision of this General Release
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and the writing is signed by the Employee and
Dominion. A waiver of any breach of or compliance with any provision or
condition of this General Release is not a waiver of similar or dissimilar
provisions or conditions.

 

WITNESS THE FOLLOWING SIGNATURE:

 

 

                  /s/ Edgar M. Roach,Jr.              

Edgar M. Roach, Jr.              

 

 

 

STATE OF
               Virginia                                                      )

CITY/COUNTY OF
                    Richmond                                       )

 

I, a Notary Public in and for the above jurisdiction, hereby certify that the

above named individual, personally known to me, appeared before me this
    29    day of      October           , 2002, and executed the foregoing
General Release.

 

                   /s/ Virginia M. Hart                                

Notary Public

(Seal)

 

My commission expires: May 31, 2004