Document:

Exhibit 10.4

 

 

 

DOMINION RESOURCES, INC.

DIRECTORS' DEFERRED CASH COMPENSATION PLAN

 

 

 

 

 

 

 

 

As Amended and in Effect September 20, 2002

 

 

TABLE OF CONTENTS

	
Section
	
 
	
Page

	
INTRODUCTION
	
1

	
1.
	
PURPOSE
	
2

	
2.
	
DEFINITIONS
	
2

	
3.
	
PARTICIPATION
	
5

	
4.
	
DEFERRAL ELECTION
	
5

	
5.
	
EFFECT OF NO ELECTION
	
6

	
6.
	
DEFERRED CASH BENEFITS
	
7

	
7.
	
DEFERRED STOCK BENEFITS
	
7

	
8.
	
DISTRIBUTION OF DEFERRED BENEFITS
	
9

	
9.
	
HARDSHIP DISTRIBUTIONS
	
11

	
10.
	
COMPANY'S OBLIGATION
	
12

	
11.
	
CONTROL BY PARTICIPANT
	
12

	
12.
	
CLAIMS AGAINST PARTICIPANT'S BENEFITS
	
12

	
13.
	
AMENDMENT OR TERMINATION
	
12

	
14.
	
NOTICES
	
13

	
15.
	
WAIVER
	
13

	
16.
	
CONSTRUCTION
	
13

	
17.
	
CORPORATE AND COMMITTEE ACTIONS AND RESPONSIBILITIES
	
14

 

 

 

 

 

 

 

 

PAGE 1

INTRODUCTION

Effective July 1, 1986, the Dominion Resources, Inc. Directors' Deferred Compensation Plan was adopted by Dominion Resources, Inc. to provide its Directors with flexibility in timing the receipt of Compensation and to assist Dominion in attracting and retaining qualified individuals to serve as Directors. The Plan was amended and restated effective January 1, 1994 to incorporate the Company's Retirement Plan. It was further amended and restated, effective January 1, 1996 to eliminate the retirement benefit.

Effective January 28, 2000, Consolidated Natural Gas Company was merged into Dominion Resources, Inc. and its assets and liabilities were assumed by Dominion. CNG maintained a deferred compensation plan for its directors, the Deferred Compensation Plan for Directors of Consolidated Natural Gas Company, effective February 20, 1998.

Effective January 28, 2000, Dominion amended and restated the Plan to merge the CNG Plan into the Plan to provide Deferred Benefits to CNG Participants.

The CNG Participants will have accounts established in the Plan in amounts equal to their account balances under the CNG Plan, and all rights and obligations to those accounts shall be governed by the terms of this Plan.

 

 

 

 

 

 

 

 

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1.PURPOSE. The Dominion Resources, Inc. Directors' Deferred Cash Compensation Plan is intended to constitute a deferred compensation plan for Director's fees in accordance with Revenue Ruling 71-419, 1971-2 C.B. 220.

2.DEFINITIONS. The following definitions apply to this Plan and to the Deferral Election Forms.

	Beneficiary or Beneficiaries means a person or persons or other entity designated on a Beneficiary Designation Form by a Participant as allowed in subsection 8(c) to receive Deferred Benefits. If there is no valid designation by the Participant, or if the designated Beneficiary or Beneficiaries fail to survive the Participant or otherwise fail to take the benefit, the Participant's Beneficiary is the first of the following who survives the Participant: (1) a Participant's spouse (the person legally married to the Participant when the Participant dies); (2) the Participant's children in equal shares and the Participant's other surviving issue, per stirpes; (3) the Participant's parents; and (4) the Participant's estate.

	Beneficiary Designation Form means a form acceptable to the Chairman of the Committee or his designee used by a Participant according to this Plan to name the Participant's Beneficiary or Beneficiaries who will receive Deferred Benefits under this Plan on account of the Participant's death.

	Board means the board of directors of the Company, according to law and to each entity's governing documents.

	CNG means Consolidated Natural Gas Company.

	CNG Participant means a Participant under the terms of the CNG Plan in effect prior to the merger of the CNG Plan into this Plan. 

	CNG Plan means the Deferred Compensation Plan for Directors of Consolidated Natural Gas Company.

	Committee means the Organization, Compensation & Nominating Committee of Dominion.

	Company means Dominion Resources, Inc. and any of its Subsidiaries that with approval of the board of directors of Dominion adopt or have adopted this Plan; any successor business by merger, purchase, or otherwise that maintains the Plan; or any predecessor business or employer that has maintained the Plan.

	Compensation means a Director's Meeting Fees and Retainer Fees for the Deferral Year.

PAGE 3

	Deferral Election Form means a document governed by the provisions of section 4 of this Plan, including the portion that is the Distribution Election Form and the related Beneficiary Designation Form that applies to all of that Participant's Deferred Benefits under the Plan.

	Deferral Year means a calendar year for which a Director has an operative Deferral Election Form.

	Deferred Benefit means either a Deferred Cash Benefit or a Deferred Stock Benefit under the Plan for a Participant who has submitted an operative Deferral Election Form pursuant to section 4 of this Plan. 

	Deferred Cash Account means that bookkeeping record established for each Participant who elects a Deferred Cash Benefit under this Plan. A Deferred Cash Account is established only for purposes of measuring a Deferred Cash Benefit and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Cash Benefit. A Deferred Cash Account will be credited with the Participant's Compensation deferred as a Deferred Cash Benefit according to a Deferral Election Form and according to section 6 of this Plan. A Deferred Cash Account will be credited periodically with amounts based upon interest rates established by the Committee under subsection 6(b) of this Plan.

	Deferred Cash Benefit means the Deferred Benefit elected by a Participant under section 4 that results in payments governed by sections 6 and 8 of this Plan.

	Deferred Stock Account means that bookkeeping record established for each Participant who elects a Deferred Stock Benefit under this Plan. A Deferred Stock Account is established only for purposes of measuring a Deferred Stock Benefit and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Stock Benefit. A Deferred Stock Account will be credited with the Participant's Compensation deferred as a Deferred Stock Benefit according to a Deferral Election Form and according to section 7 of this Plan. A Deferred Stock Account will be credited periodically with amounts determined by the Committee under subsection 7(b) of this Plan.

	Deferred Stock Benefit means the Deferred Benefit elected by a Participant under section 4 that results in payments governed by sections 7 and 8 of this Plan.

	Director means a duly elected or appointed member of the Board who is eligible to participate in this Plan according to criteria which may from time to time be adopted by the Company.

PAGE 4

	Distribution Election Form means that part of a Deferral Election Form used by a Participant according to this Plan to establish the duration of deferral and the frequency of payments of a Deferred Benefit. If a Deferred Benefit has no Distribution Election Form that is operative according to section 4 of this Plan, distribution of that Deferred Benefit is governed by section 8(b) of this Plan.

	Dominion means Dominion Resources, Inc.

	Election Date means the date established by this Plan as the date before which a Director must submit a valid Deferral Election Form to the Committee. For each Deferral Year, the Election Date is December 31 of the preceding calendar year. However, for an individual who becomes a Director during a Deferral Year, the Election Date is the thirtieth day following the date that he becomes a Director. Despite the two preceding sentences, the Committee may set an earlier date as the Election Date for any Deferral Year.

	Meeting Fees means the portion of a Director's Compensation that is based upon the Director's attendance at Board meetings and meetings of the Company's committees, according to the Company's established rules and procedures for compensating Directors.

	Participant means, with respect to any Deferral Year, a Director whose Deferral Election Form is operative for that Deferral Year.

	Plan means the Dominion Resources, Inc. Directors' Deferred Cash Compensation Plan.

	Retainer Fee means that portion of a Director's cash Compensation that is fixed and paid without regard to the Director's attendance at meetings.

	Subsidiaries means the wholly owned first-tier subsidiaries of Dominion. 

	Terminate, Terminating, or Termination, with respect to a Participant, mean cessation of the Participant's relationship with the Company as a Director whether by death, disability or severance for any other reason. Unless the Committee determines otherwise in its sole discretion, Terminate, Terminating, or Termination do not include situations where the Participant continues to be employed by a Company or a Director on the Board of a Company.

	Unrestricted Participant means a Participant who is not subject to the reporting requirements and other provisions of Section 16 of the Securities Exchange Act of 1934 with respect to Dominion.

PAGE 5
3.PARTICIPATION. A Director becomes a Participant with respect to a Deferred Benefit by filing a valid Deferral Election Form according to section 4 on or before the Election Date for that Deferral Year, but only if his Deferral Election Form is operative according to section 4.

4.DEFERRAL ELECTION. A deferral election is valid when a Deferral Election Form is completed, signed by the electing Director, and received by the Committee Chairman or the Committee Chairman's delegate. Deferral elections are governed by the provisions of this section.

	A Participant may elect a Deferred Benefit for any Deferral Year if that person is a Director at the beginning of that Deferral Year or becomes a Director during that Deferral Year.

	Before each Deferral Year's Election Date, each Director will be provided with a Deferral Election Form and a Beneficiary Designation Form. Under the Deferral Election Form for a single Deferral Year, a Director may elect on or before the Election Date to defer the receipt of all or part of the Director's Retainer Fee (in 10% increments) or the Director's Meeting Fees (in 10% increments), or both for the Deferral Year. 

	A Participant's Deferral Election Form for the Participant's Retainer Fee may specify either a Deferred Cash Benefit (in 10% increments of the deferred amount) or a Deferred Stock Benefit (in 10% increments of the deferred amount), or a combination thereof and a Participant's Deferral Election Form for the Participant's Meeting Fees may specify a Deferred Cash Benefit (in 10% increments of the amount deferred) or a Deferred Stock Benefit (in 10% increments of the amount deferred), or a combination thereof.

	If a Participant is a Director for more than one Company, the Participant's Deferral Election Form shall apply to all the Participant's Meeting Fees, Retainer Fees or Compensation (based on the percentages indicated by the Participant on the Deferral Election Form) payable to the Participant as a Director; provided that the Participant may, with the permission of the Committee, complete a separate Deferral Election Form covering such fees payable to the Participant as a Director from each such Company.

	Except as provided in this subsection and in subsections 6(c) and 7(c), a Participant may not elect to convert a Deferred Cash Benefit to a Deferred Stock Benefit or to convert a Deferred Stock Benefit to a Deferred Cash Benefit. 

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	Each Distribution Election Form is part of the Deferral Election Form on which it appears or to which it states that it is related. The Committee may allow a Participant to file one Distribution Election Form for all of the Participant's Deferred Cash Benefits, all of the Participant's Deferred Stock Benefits or all of the Participant's Deferred Benefits. The provisions of section 8(b) of this Plan apply to any Deferred Benefit under this Plan if there is no operative Distribution Election Form for that Deferred Benefit.

	If it does so before the last business day of the Deferral Year, the Committee may reject any Deferral Election Form or any Distribution Election Form or both, and the Committee is not required to state a reason for any rejection. The Committee may modify any Distribution Election Form at any time to the extent necessary to comply with any federal securities laws or regulations. However, the Committee's rejection of any Deferral Election Form or any Distribution Election Form or the Committee's modification of any Distribution Election Form must be based upon action taken without regard to any vote of the Director whose Deferral Election Form or Distribution Election Form is under consideration, and the Committee's rejections must be made on a uniform basis with respect to similarly situated Directors. If the Committee rejects a Deferral Election Form, the Director must be paid the amounts that the Director would then have been entitled to receive if the Director had not submitted the rejected Deferral Election Form.

	A Director may not revoke a Deferral Election Form or a Distribution Election Form after the Deferral Year begins. Any revocation before the beginning of the Deferral Year is the same as a failure to submit a Deferral Election Form or a Distribution Election Form. Any writing signed by a Participant expressing an intention to revoke a Deferral Election Form or a related Distribution Election Form and delivered to a member of the Committee before the close of business on the relevant Election Date is a revocation.

5.EFFECT OF NO ELECTION. A Director who has not submitted a valid Deferral Election Form to the Committee on or before the relevant Election Date may not defer any part of the Director's Compensation for the Deferral Year under this Plan. The Deferred Benefit of a Director who submits a valid Deferral Election Form but fails to submit a valid Distribution Election Form for that Deferred Benefit before the relevant Election Date or who otherwise has no valid Distribution Election Form for that Deferred Benefit is governed by section 8(b).

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6.DEFERRED CASH BENEFITS.

	Deferred Cash Benefits will be set up in a Deferred Cash Account for each Participant and credited with interest at rates determined by the Committee. Deferred Cash Benefits are credited to the applicable Participant's Deferred Cash Account as of the day they would have been paid but for the deferral or, in the case of an Unrestricted Participant's transfer of an amount from the Unrestricted Participant's Deferred Stock Account pursuant to subsection 7(c), the date that the Unrestricted Participant's written transfer direction is received by the Committee or its designate. Interest is credited on the last day of each calendar quarter of the Deferral Year based on the Deferred Cash Account balance at the end of the preceding day.

	Interest will be credited to Deferred Cash Accounts based on the average three-month United States Treasury Bill rates (equivalent yield, not discount yield) as published by the Federal Reserve Board. The applicable rate for each month will be determined on the last business day of the previous month. Those interest rates will apply prospectively for all current and future Deferred Cash Account balances until the basis on which interest is determined is changed by the Committee. Interest credits are accrued monthly on accumulated Deferred Cash Accounts. Interest is accrued through the end of the month preceding the month of distribution of a Deferred Cash Benefit.

	If a Participant elects under the second sentence of subsection 4(e) of this Plan to convert a Deferred Cash Benefit into a Deferred Stock Benefit, the Participant's Deferred Cash Account will be converted to a Deferred Stock Account governed by section 7 of this Plan as of the date the Plan's provisions relating to Deferred Stock Benefits become effective for purposes of the Participant's election. In addition, once during each calendar year an Unrestricted Participant may transfer all or part (in 10% increments) of the Unrestricted Participant's Deferred Cash Account to the Unrestricted Participant's Deferred Stock Account.

	A Deferred Cash Account under this Plan shall be established for each CNG Participant in an amount equal to his "Cash Credits" under the CNG Plan, as of the effective date of the merger between Dominion and CNG. The Deferred Cash Accounts established for CNG Participants shall be governed by the terms of this Plan.

7.DEFERRED STOCK BENEFITS. Electing Participants' Deferred Stock Benefits are governed by this section.

	Deferred Stock Benefits will be set up in a Deferred Stock Account for each electing Participant and credited with earnings at rates determined by the Committee. A Deferred Stock Benefit attributable to a Retainer Fee is credited to the Participant's Deferred Stock Account on the last day of each calendar quarter

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of the Deferral Year. A Deferred Stock Benefit attributable to a Meeting Fee is credited to the Participant's Deferred Stock Account on the last day of the month in which a meeting occurs. A Deferred Stock Benefit, attributable to an Unrestricted Participant's transfer of an amount from the Unrestricted Participant's Deferred Cash Account to the Unrestricted Participant's Deferred Stock Account pursuant to subsection 7(c), is credited to the Participant's Deferred Stock Account on the date that the Unrestricted Participant's written transfer direction is received by the Committee or its designate.

	Rates established by the Committee as the basis for additional credits to Deferred Stock Accounts will be variable rates equal to the value of dividends paid on Dominion common stock when the additional credit is made. The value of a Deferred Stock Account, at any relevant time, equals the value of the shares of Dominion common stock as if the Compensation deferred by the Participant under the Plan and any additional credits under this subsection had been used to purchase Dominion common stock on the date those amounts were credited to the Deferred Stock Account. Additional credits are credited on accumulated Deferred Stock Accounts on the date that dividends are paid on Dominion common stock.. Additional credits are accrued through the end of the year preceding the year of distribution of a Deferred Stock Benefit.

	Once during each calendar year an Unrestricted Participant may transfer all or part (in 10% increments) of the Unrestricted Participant's Deferred Stock Account to the Unrestricted Participant's Deferred Cash Account.

	A Deferred Stock Account under this Plan shall be established for each CNG Participant in an amount equal to each CNG Participant's "Stock Credit Account," as of the effective date of the merger between Dominion and CNG. The amount to be credited to each CNG Participant's Deferred Stock Account shall be determined on the same basis that is used for converting shares of CNG common stock into Dominion common stock in the merger between Dominion and CNG. The Deferred Stock Accounts established for CNG Participants shall be governed by the terms of this Plan.

	If a trust is established under subsections 10(b) and 13(b) of this Plan, an electing Participant may instruct the trustee under the governing trust agreement how to vote shares of Dominion common stock allocated to that Participant's separate account under the trust according to this subsection and provisions of the governing trust agreement. Before each annual or special meeting of the Dominion shareholders, the trustee under the governing trust agreement must furnish each Participant with a copy of the proxy solicitation and other relevant material for the meeting as furnished to the trustee by Dominion, and a form addressed to the trustee requesting the Participant's confidential instructions on how to vote shares of Dominion common stock allocated to that Participant's account as of the valuation date established under the governing trust agreement 

PAGE 9
preceding the record date. Upon receipt of those instructions, the trustee under the governing trust agreement must vote such stock as instructed.

8.DISTRIBUTION OF DEFERRED BENEFITS.

	According to a Participant's Distribution Election Form, but subject to Plan subsection 4(g), a Deferred Cash Benefit must be distributed in cash. According to a Participant's Distribution Election Form, but subject to Plan subsection 4(g), a Deferred Stock Benefit must be distributed in shares of Dominion common stock equal in value to the value of the Participant's Deferred Stock Account on the last day of the month preceding the month of distribution. However, cash must be paid in lieu of fractional shares of Dominion common stock otherwise distributable. According to the procedures of Plan subsection 4(g), the Committee may modify any Participant's Distribution Election Form to prevent any distribution of Dominion common stock to pay a Deferred Stock Benefit if the total number of shares of such stock distributed under this Plan after such distribution would exceed 100,000 shares times the number of Participants in the Plan on the relevant date.

	Except for distributions triggered by a Participant's disability, Deferred Benefits will be paid in a lump sum unless the Participant's Distribution Election Form specifies installment payments in any number of annual installments not exceeding ten (10) annual installments. For a Deferred Cash Benefit payable in installments, interest credits under Plan subsection 6(b) continue to accrue on the unpaid balance of a Deferred Cash Account. For a Deferred Stock Benefit payable in installments, additional credits under Plan subsection 7(b) do not accrue on the unpaid balance of a Deferred Stock Account after the year preceding the year in which payments begin. Instead, any additional credits that would have been credited to a Deferred Stock Account are payable to the applicable Participant in cash on the date that they would otherwise have been credited.

If a Participant Terminates as a result of disability, Deferred Benefits will be paid to such Participant in installment payments over a period of 10 years commencing on the date the Participant's disability is certified by the Committee unless the Committee, in its sole discretion, approves a longer or shorter payment period. If, after the Participant's Termination as a result of disability, such Participant recovers before the balance of the Participant's Deferred Cash and Deferred Stock Accounts under the Plan are exhausted, the Participant's distributions will be discontinued and any remaining Deferred Benefits under the Plan will be governed by the provisions of this section and the Participant's Distribution Election Forms.

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Unless otherwise specified in a Participant's Distribution Election Form, any lump sum payment will be paid or installment payments will begin to be paid on the February 15 of the year after the Participant's sixty-fifth birthday or on the February 15 of the year after the Participant's Termination, if earlier. For distributions that would automatically be caused under the preceding sentence by a Participant's Termination (other than by death or disability) or for distributions that would otherwise automatically begin because a Participant reaches age sixty-five, the Participant may elect on his Distribution Election Form that payments are to begin

(i)on the February 15 following the Participant's Termination, without regard to the Participant's age; or

(ii)on the February 15 following the Participant's Termination and the Participant's attainment of a specified age; or

(iii)even if the Participant does not Terminate, on the February 15 following attainment of a specified age.

For purposes of these distribution election alternatives, the specified age must be not less than the Participant's age two years from the Election Date pertaining to the applicable Deferral Year and not greater than the age at which there are no earnings limitations in order to receive full social security benefits (currently age 70). With the consent of the Committee (which shall be given or withheld in its sole discretion), an Unrestricted Participant may amend the Unrestricted Participant's Distribution Election Form to accelerate or postpone the commencement of benefits if (i) in the case of a postponed distribution, the amendment is approved by the Committee before the calendar year in which benefit payments are scheduled to begin and (ii) in the case of a postponed or accelerated distribution, the amended payment date conforms to the requirements of the Plan.

	Deferred Benefits may not be assigned by a Participant or Beneficiary. A Participant may use only one Beneficiary Designation Form to designate one or more Beneficiaries for all of the Participant's Deferred Benefits under the Plan; such designations are revocable. A CNG Participant's Beneficiary designation under the terms of the CNG Plan shall remain in effect for purposes of this Plan unless revoked by the CNG Participant. A CNG Participant who does not have a Beneficiary designation in effect may complete a Beneficiary Designation Form to designate one or more Beneficiaries for all of the CNG Participant's Deferred Benefits under the Plan; such designations are revocable. A CNG Participant's Deferred Benefits will be distributed in accordance with the terms of this Plan, if there is no Beneficiary designation in effect on the date of the CNG Participant's death.

PAGE 11

Each Beneficiary will receive the Beneficiary's portion of the Participant's Deferred Cash Account and Deferred Stock Account on February 15 of the year following the Participant's death unless the Beneficiary's request for accelerated payment is approved at the Committee's discretion under section 10 of this Plan or unless the Beneficiary's request for a different distribution schedule is received before distributions begin and is approved at the Committee's discretion. The Committee may insist that multiple Beneficiaries agree upon a single distribution method.

	Any Dominion common stock distributed pursuant to the Plan shall have been acquired by an "agent independent of the issuer" (i.e., the Company) within the meaning of 17 CFR 240.10b-18, as such regulation is in effect on April 19, 1985. Such acquisitions may be effected in all cases on the open market or, in the event that the Company makes available newly issued common stock, directly from the Company, provided that such common stock has been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or any successor thereto at the time such purchase is made or an exemption from such registration requirement is, in the opinion of counsel to the Company, available.

9.HARDSHIP DISTRIBUTIONS.

	At its sole discretion and at the request of a Participant before or after the Participant's Termination, or at the request of any of the Participant's Beneficiaries after the Participant's death, the Committee may accelerate and pay all or part of any amount attributable to a Participant's Deferred Benefits under this Plan. Except as provided in Plan subsection 8(b), accelerated distributions may be allowed only in the event of a financial emergency beyond the Participant's or Beneficiary's control and only if disallowance of a distribution would create a severe hardship for the Participant or Beneficiary. An accelerated distribution must be limited to the amount determined by the Committee to be necessary to satisfy the financial emergency.

	For purposes of an accelerated distribution of a Deferred Stock Benefit under this section, the Deferred Stock Benefit's value is determined by the value of the Deferred Stock Account at the time of the distribution.

	Only cash distributions are permitted under this section. Distributions under this section must first be made from the Participant's Deferred Cash Account before accelerating the distribution of any amount attributable to a Deferred Stock Benefit.
	A distribution under this section is in lieu of that portion of the Deferred Benefit that would have been paid otherwise. A Deferred Cash Benefit is adjusted for a distribution under this section by reducing the Participant's Deferred Cash 

PAGE 12
Account balance by the amount of the distribution. A Deferred Stock Benefit is adjusted for a distribution under this section by reducing the value of the Participant's Deferred Stock Account by the amount of the distribution.

10.COMPANY'S OBLIGATION.
(a)The Plan is unfunded. A Deferred Benefit is at all times a mere contractual obligation of the Company. A Participant and the Participant's Beneficiaries have no right, title, or interest in the Deferred Benefits or any claim against them. Except according to Plan subsections 10(b) and 13(b), the Company will not segregate any funds or assets for Deferred Benefits nor issue any notes or security for the payment of any Deferred Benefit.

(b)Subject to Plan subsection 13(b), the Company may establish a grantor trust and transfer to that trust shares of Dominion common stock or other assets. Trust assets must be invested primarily in Dominion common stock for the purpose of measuring the value of Deferred Stock Accounts under the Plan to be distributed as Deferred Stock Benefits in the form of Dominion common stock, plus cash in lieu of fractional shares. The governing trust agreement must require a separate account to be established for each electing Participant. The governing trust agreement must also require that all Company assets held in trust remain at all times subject to the Company's judgment creditors. Dominion, in its discretion, may assume the rabbi trust established by CNG with respect to the CNG Plan and may transfer to that trust shares of Dominion common stock or other assets. 

11.CONTROL BY PARTICIPANT. A Participant has no control over Deferred Benefits except according to the Participant's Deferral Election Forms, Distribution Election Forms, and Beneficiary Designation Forms.

12.CLAIMS AGAINST PARTICIPANT'S BENEFITS. A Deferred Cash Account and a Deferred Stock Account relating to a Participant under this Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to do so is void. Deferred Benefits are not subject to attachment or legal process for a Participant's debts or other obligations. Nothing contained in this Plan gives any Participant any interest, lien, or claim against any specific asset of the Company. A Participant or the Participant's Beneficiary has no rights other than as a general creditor.

13.AMENDMENT OR TERMINATION. Except as otherwise provided in this section, this Plan may be altered, amended, suspended, or terminated at any time as to Dominion, or any Subsidiary that has adopted the Plan (pursuant to Plan subsection 2(e)) by that entity's Board.
(a)The Plan shall be operated according to its terms (as amended periodically) and as directed by the Committee until it is effective. Once the Plan is effective, the Board of Dominion or any Subsidiary that has adopted the Plan (pursuant to Plan 

PAGE 13
subsection 2(e)) may alter, amend, suspend, or terminate this Plan at any time as it relates to its Directors. However, except for a termination of the Plan caused by the determination of the applicable Board that the laws upon which the Plan is based have changed in a manner that negates the Plan's objectives, that Board may not alter, amend, suspend, or terminate this Plan without the majority consent of all Directors who are Participants if that action would result either in a distribution of all Deferred Benefits in any manner other than as provided in this Plan or that would result in immediate taxation of Deferred Benefits to Participants. Notwithstanding the preceding sentence, if any amendment to the Plan, subsequent to the date the Plan becomes effective, adversely affects Deferred Benefits elected hereunder, after the effective date of any such amendment, and the Internal Revenue Service declines to rule favorably on any such amendment or to rule favorably only if the applicable Board makes amendments to the Plan not acceptable to such Board, the Board of each Company, in its sole discretion, may accelerate the distribution of part or all amounts attributable to affected Deferred Benefits due its Directors hereunder.

(b)The Company may only contribute to a trustee under a trust agreement by transferring cash or assets with a fair market value equal to the value (determined at the nearest month end) of the related Deferred Stock Accounts if the trust agreement contains provisions sufficient (in the opinion of either the Internal Revenue Service or counsel selected by the Company) to allow the Participants to defer income taxation on Deferred Stock Benefits until they are distributed according to this Plan and provisions sufficient (in the opinion of counsel selected by the Company) to exempt the Plan and the trust from sections 10(b) and 16(b) of the Securities Exchange Act of 1934 and applicable rules and regulations. If the Internal Revenue Service refuses to give the required opinion on such a trust, and if counsel selected by the Company is the opinion that no such trust can be created, Plan subsection 10(b) and all provisions of this Plan relating to Deferred Stock Benefits will not become effective.

14.NOTICES. Notices and elections under this Plan must be in writing. A notice or election is deemed delivered if it is delivered personally or if it is mailed by registered or certified mail to the person at such person's last known business address.

15.WAIVER. The waiver of a breach of any provision in this Plan does not operate as and may not be construed as a waiver of any later breach.

16.CONSTRUCTION. This Plan is created, adopted, and maintained according to the laws of Virginia (except its choice-of-law rules). It is governed by those laws in all respects. Headings and captions are only for convenience; they do not have substantive meaning. If a provision of this Plan is not valid or not enforceable, that fact in no way affects the validity or enforceability of any other provision. Use of the one gender includes all, and the singular and plural include each other.

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17.CORPORATE AND COMMITTEE ACTIONS AND RESPONSIBILITIES. Each Company shall be solely responsible for the Plan as it relates to its Directors. The Committee has delegated certain administrative determinations under the Plan that do not affect individuals' participation or awards. Notwithstanding any other provision of this Plan, the issuance of Dominion common stock in settlement of a Deferred Stock Benefit shall be subject to the approval of Dominion's Board which approval is evidenced by its adoption of this Plan.ex101

Exhibit 10.1

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: 

PercentageExpiration 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

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