UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported) December 15, 2005

Dominion Resources, Inc.
(Exact Name of Registrant as Specified in Its Charter)

 

Virginia
(State or other jurisdiction
of incorporation)

1-8489
(Commission
File Number)

54-1229715
(IRS Employer
Identification No.)

 

120 Tredegar Street
Richmond, Virginia
(Address of Principal Executive Offices)


23219
(Zip Code)


Registrant's Telephone Number, Including Area Code (804) 819-2000

 

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On December 16, 2005, Dominion Resources, Inc. (Dominion) announced the retirement of Thos. E. Capps as Chief Executive Officer (CEO), effective December 31, 2005. In accordance with Dominion's governance guidelines, Mr. Capps offered his resignation from the Board on December 15, 2005; however, Dominion's Organization, Compensation and Nominating (OCN) Committee in its discretion granted under those guidelines, declined his offer. Mr. Capps remains as Chairman of the Board of Directors. The Board of Directors then elected Thomas F. Farrell, II as President and CEO, effective January 1, 2006. Mr. Farrell currently serves as Dominion's President and Chief Operating Officer.

In connection with his election as Dominion's CEO, the independent members of the Board of Directors approved, as recommended by the OCN Committee, Mr. Farrell's base salary of $1,000,000 effective January 1, 2006 and an amendment to a letter agreement, dated February 27, 2003, between the company and Mr. Farrell to provide that, in the event of an involuntary termination without cause, any unvested restricted stock granted to Mr. Farrell before his election as CEO would vest, and he would have access to retiree medical coverage to the same extent as retired employees of the company.

The independent members of the Board of Directors also approved the following amendments to the Dominion Resources, Inc. Executive Stock Purchase Tool Kit for executives who have not met their ownership guidelines: i) to increase the company match from 5% to 25% on purchases under Dominion Direct ® , the company's direct stock purchase program; ii) to exchange an annual cash incentive award for goal-based stock and in addition receive a company match of goal-based stock equal to 25% of that cash award; and iii) to eliminate the restricted stock exchange provisions.

On December 15, 2005, the OCN Committee approved the 2006 compensation program for executive officers. The OCN Committee approved base salary increases for executive officers (and recommended that the independent members of the Board of Directors approve an increase for Mr. Farrell) based on a number of considerations, including: (i) the report of the committee's independent compensation consultant; (ii) an assessment of the performance of each officer during 2005; and (iii) internal equity, succession planning and market condition assessments. After reviewing the current compensation as compared to its peer companies and competitive labor market, and considering the other factors outlined above, the OCN Committee approved base salary increases for four of its five named executive officers. These adjustments were deemed appropriate by the OCN Committee and its consultant in light of each officer's current compensation as compared to the market median for comparative positions, tenure in office and other considerations. Mr. Capps did not receive a base salary increase as he will no longer be a salaried employee as of January 1, 2006. The base salaries for Dominion's other named executive officers were as follows: Executive Vice President and Chief Financial Officer - $600,000; Executive Vice President (President and CEO-Dominion Exploration & Production) - $575,000; and Senior Vice President-Law - $400,000. The base salary increases were approved by the OCN Committee but are not otherwise set forth in a written agreement between the company and the executives. No long-term grants were made at this time, but the OCN Committee did state its intention to recommend a long-term equity grant to officers in 2006, the details of which will be determined at a later meeting.

Item 5.02.  Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

As reported above, on December 16, 2005, Dominion announced the retirement of Thos. E. Capps as CEO, effective December 31, 2005. Mr. Capps remains as Chairman of Dominion's Board of Directors. Also on December 16, 2005, the Board of Directors elected Thomas F. Farrell, II, age 51, as President & CEO, effective January 1, 2006. Mr. Farrell, who has been Dominion's President and Chief Operating Officer since 2004, joined Dominion in 1995 and has held several executive management positions for Dominion and its subsidiaries.

See also Item 1.01 above regarding an amendment to Mr. Farrell's letter agreement with Dominion.

Item 9.01.  Financial Statements and Exhibits.

Exhibits

10.1

Letter agreement between Dominion and Thomas F. Farrell, II (Exhibit 10.24, Form 10-K for the fiscal year ended December 31, 2002, File No. 1-8489, incorporated by reference), as amended December 16, 2005 (filed herewith).

10.2

Dominion Resources, Inc. Executive Stock Purchase Tool Kit, effective September 1, 2001, amended and restated December 16, 2005 (filed herewith).

 

 

 

SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

DOMINION RESOURCES, INC.
Registrant

               /s/ Patricia A. Wilkerson             
Patricia A. Wilkerson
Vice President and Corporate Secretary

 

Date: December 16, 2005

Exhibit 10.1

December 16, 2005

Mr. Thomas F. Farrell, II
Dominion Resources, Inc.

Dear Tom:

The purpose of this letter agreement is to amend the letter agreement between you and the Company dated February 27, 2003 (the "Agreement"). In recognition of your election as Chief Executive Officer of Dominion effective as of January 1, 2006 and your agreement to serve in such position, the Board of Directors has approved an amendment to your Agreement to include a new section as follows:

E. Benefits Upon Involuntary Termination

In the event your employment is involuntarily terminated without cause (as defined in your Employment Continuity Agreement) before you reach age 55, any unvested restricted stock granted to you before your election as Chief Executive Officer shall vest upon termination. This provision will not apply to any equity awards made on or after January 1, 2006. Furthermore, you will be entitled to participate in retiree medical coverage without regard to your age or service to the same extent as retired employees under the terms of the plan offered at such time by the company to its retired employees.

Signatures

If you agree with the terms and conditions set forth above, please indicate your acceptance by signing and returning one copy of this letter to me. You should retain the other copy for your records.

Sincerely yours,

/s/ Dr. Frank S. Royal          
Dr. Frank S. Royal
Chairman, Organization, Compensation
and Nominating Committee
Dominion Resources, Inc.

 

 

Accepted: /s/ Thomas F. Farrell, II   
                Thomas F. Farrell, II

Date: December 16, 2005                 

 Exhibit 10.2 

DOMINION RESOURCES, INC.

EXECUTIVE STOCK PURCHASE TOOL KIT

 

 

 

 

 

Effective September 1, 2001

Amended and Restated December 16, 2005

TABLE OF CONTENTS

 

 

Page

1.

Purpose

1

2

Eligibility

1

3.

Participation

1

4.

Bonuses under the Programs

1

5.

Bonus Exchange Program

1

6.

Dominion Direct Program

2

7.

Effective Date of the Tool Kit

2

8.

Termination, Modification, Change

2

9.

Administration of the Tool Kit

2

10.

Notice

2

11.

Definitions

3

DOMINION RESOURCES, INC.

EXECUTIVE STOCK PURCHASE TOOL KIT

 

    1. Purpose .   The purpose of this Dominion Resources, Inc. Executive Stock Purchase Tool Kit (the "Tool Kit") is to encourage and facilitate ownership of Dominion Resources, Inc. (the "Company") common stock by the executives of the Company and certain of its subsidiaries. The Tool Kit is established in conjunction with the Dominion Resources, Inc. 2005 Incentive Compensation Plan. The Tool Kit contains programs that the employee can use to build his or her ownership in Company Stock.
    2. Eligibility .   An employee of the Company or a Subsidiary is eligible to participate who:
      1. is subject to the Company's Stock Ownership Guidelines, and
      2. is not in compliance with their Guideline Level for any reason approved by the Administrator, including (i) being newly hired or promoted into an officer position; (ii) having a higher Guideline Level due to a promotion, to an increase in salary, or (iii) a change in Guideline Level due to stock price fluctuations.

      Once a Participant has reached the Guideline Level, generally the Participant must cease participation in any of the Programs. An employee's participation in the Tool Kit shall not obligate the Company or a Subsidiary to pay any particular salary or to continue the employment of a Participant. Additional qualifications may apply for each Program.

    3. Participation .   To become a Participant, an eligible employee must satisfy the requirements to participate in the Program (or Programs) of his or her choice. The agreements and other documents required under the Tool Kit shall be in such form and shall be submitted at such times and to such individuals as specified by the Administrator. No eligible employee is required to participate in the Tool Kit. The Participant shall complete, sign and submit all agreements and other documents as may be required by the Administrator relating to the desired Program.
    4. Bonuses under the Programs .   Each of the Programs provides for a bonus to be awarded to the Participant, subject to certain limitations. All of the bonuses under the Programs cease when the Participant has reached the Guideline Level.
    5. Bonus Exchange Program .   Participants may acquire Company Stock through the Bonus Exchange Program as described in this Section 5.
      1. Under the provisions of the Incentive Compensation Plan, a Participant may elect to receive a percentage (up to 100%) of an annual cash incentive plan award as Goal-Based Stock. The elected percentage will be paid in a combination of Goal-Based Stock and cash. The cash portion will equal the Applicable Taxes on the

        2.  

        1

        elected percentage and any partial share with the remainder in Goal-Based Stock.

      2. When a Participant makes an election under Section 5(a), an additional payment will be made to the Participant equal to 25% (twenty five percent) of the amount of the annual incentive plan award elected under Section 5(a). The additional payment will be made in a combination of Goal-Based Stock and cash in the same relationship as stated in Section 5(a).
    6. Dominion Direct Program .   Participants may acquire Company Stock through the Dominion Direct Program as described in this Section 6.
      1. Under the procedures of Dominion Direct®, a Participant may elect to make periodic monthly or quarterly purchases of Company Stock. The Participant shall complete any forms required to participate in Dominion Direct® and any additional forms provided for purposes of participation in the Dominion Direct Program.
      2. When Company Stock is purchased under Dominion Direct®, the Company or a Subsidiary shall pay the Participant a cash bonus equal to 25% (twenty five percent) of the total amount invested in Dominion Direct® under this Program. By receiving the bonus, the Participant agrees to invest the net cash proceeds from the bonus (after taxes) to purchase further shares of Company Stock under Dominion Direct® at the next purchase opportunity. Any Dominion Direct® purchase of Company Stock with a value equal to the net cash proceeds from the bonus will not be eligible for an additional bonus under this Section 6(b).
    7. Effective Date of the Tool Kit .   This Amended and Restated Tool Kit shall be effective on December 15, 2005.
    8. Termination, Modification, Change .   If not sooner terminated or extended by the Committee or the Board, this Tool Kit shall terminate at the close of business on August 31, 2011. The Committee or the Board may terminate the Tool Kit or may amend the Tool Kit in such respects as it shall deem advisable. A termination or amendment of the Tool Kit shall not, without the consent of the Participant, adversely affect the Participant's rights under existing participation in a Program.
    9. Administration of the Tool Kit .   The Administrator shall administer the Tool Kit subject to the oversight of the Committee. The Administrator shall have the authority to interpret the Tool Kit and its interpretations shall be binding on all parties. The Committee may establish and revise from time to time rules and regulations for the Tool Kit. The Committee may delegate any of its duties and responsibilities under the Tool Kit to the Administrator. The laws of the Commonwealth of Virginia shall govern the terms of this Tool Kit.
    10. Notice .   All notices and other communications required or permitted to be given under this Tool Kit shall be in writing and shall be deemed to have been duly given if delivered personally or mailed first class, postage prepaid, as follows (a) if to the Company - at its

      11.  

      2

      principal business address to the attention of the Chief Financial Officer; (b) if to any Participant - at the last address of the Participant known to the sender at the time the notice or other communication is sent.

    11. Definitions .   As used in the Tool Kit, the following terms shall have the meanings indicated:
      1. "Administrator" means the individual or committee authorized by the Committee to administer the Tool Kit. Unless the Committee determines otherwise, the Administrator shall be the Director-Executive Compensation.
      2. "Applicable Taxes" means the projected assumed federal, state and local income taxes and Medicare taxes payable by a Participant due to the receipt of compensation income under a Program.
      3. "Board" means the Board of Directors of Dominion Resources, Inc.
      4. "Committee" means the Organization, Compensation and Nominating Committee of the Board.
      5. "Company" means Dominion Resources, Inc.
      6. "Company Stock" means common stock of the Company. In the event of a change in capital structure of the Company, the shares resulting from such a change shall be deemed to be Company Stock within the meaning of the Tool Kit.
      7. "Goal-Based Stock" means Goal-Based Stock as defined in and issued pursuant to the terms of the Incentive Compensation Plan.
      8. "Guideline Level" means the lower of (i) the set number of shares or (ii) the multiple of salary of the Company's stock ownership guideline for executives as established from time to time.
      9. "Incentive Compensation Plan" means the Dominion Resources, Inc. 2005 Incentive Compensation Plan or any successor plan.
      10. "Participant" means any eligible employee who acquires Company Stock under the Tool Kit.
      11. "Program" means one of the following programs:
        1. "Bonus Exchange Program" described in Section 5; and
        2. "Dominion Direct Program" described in Section 6. 

         

        3

      12. "Subsidiary" means another corporation in which the Company owns stock possessing at least 50 percent of the combined voting power of all classes of stock or which is in a chain of corporations with the Company in which stock possessing at least 50% of the combined voting power of all classes of stock is owned by one or more other corporations in the chain.

 

4