UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
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RULE 14A-6(E)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Dominion Resources, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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2002 Proxy Statement Contents
2 The Proxy Process
4 Item One: Election of Directors
6 Item Two: Shareholder Proposals
8 The Board
10 Share Ownership Table
11 The Audit Committee Report
12 Organization, Compensation &
Nominating Committee Report
14 Executive Compensation
20 Auditors
20 Other Information
NOTICE OF ANNUAL MEETING
Dominion Resources, Inc.
P.O. Box 26532
Richmond, Virginia 23261
[GRAPHIC] Dominion (SM)
March 20, 2002
Dear Shareholder:
On Friday, April 26, 2002, Dominion Resources, Inc. will hold its Annual Meeting
of Shareholders at the Library of Virginia, 800 East Broad Street, Richmond,
Virginia. The meeting will begin at 9:30 a.m. Eastern Daylight Time.
Only shareholders that owned stock at the close of business on March 1, 2002 may
vote at this meeting or any adjournments that may take place. At the meeting we
propose to:
o Elect 14 directors;
o Consider two shareholder proposals, if presented, and;
o Attend to other business properly presented at the meeting.
This proxy statement was mailed and our 2001 Annual Report made available to you
on approximately March 20, 2002. I hope you will be able to attend the meeting,
but even if you cannot, please vote your proxy as soon as you can.
By order of the Board of Directors,
Patricia A. Wilkerson
Vice President and Corporate Secretary
THE PROXY PROCESS
Your Board of Directors is soliciting your proxy for the 2002 Annual Meeting of
Shareholders and encourages you to vote in favor of all the Director nominees
and against the two proposals presented on p. 6 and 7.
Record Date
All shareholders that owned common stock at the close of business on March 1,
2002 are entitled to vote at the Annual Meeting. There were 265,355,254 shares
of Dominion Resources, Inc. common stock outstanding on that date.
Householding
For registered shareholders and Dominion Direct/SM/ participants, a single
copy of the annual report has been sent to multiple shareholders who reside at
the same address. Shareholders who contacted us will receive an individual copy
of the annual report. Any shareholder that would like to receive a separate
annual report may call or write us at the address below, and we will promptly
deliver it.
If you received multiple copies of the annual report and would like to receive
combined mailings in the future, please contact us at the address below.
Shareholders who hold their shares in "street name" -- in an account with a
broker or a bank--should contact their broker regarding combined mailings.
Dominion Resources
Shareholder Services
P.O. Box 26532
Richmond, VA 23261
1-800-552-4034
shareholder_services@dom.com
Voting
Methods. You may vote in person at the Annual Meeting or by proxy. For
shares that you hold directly as a registered shareholder or shares held in
Dominion Direct/SM/, you have three ways to vote by proxy:
1. Connect to the Internet at www.votefast.com;
2. Call 1-800-542-1160; or
3. Complete the proxy card and mail it back to us.
Complete instructions for voting your shares can be found on your proxy
card.
If you vote and change your mind on any issue, you may revoke your proxy at any
time before the close of voting at the Annual Meeting. There are four ways to
revoke your proxy:
1. Connect to the website listed above;
2. Call the 800 number listed above under
Voting Methods;
3. Write our Corporate Secretary; or
4. Vote your shares at the Annual Meeting.
Beneficial Owners (Broker Shares). If your shares are held in "street name" with
your broker, please follow the instructions found on the Voting Instruction Card
enclosed with this proxy statement.
Registered Shareholders and Dominion Direct/SM/ Participants. Your proxy
card shows the number of full and fractional shares you own. If you are a
participant in our Dominion Direct/SM/ stock purchase plan, the number includes
shares we hold in your Dominion Direct/SM/ account. All shares will be voted
according to your instructions if you properly vote your proxy by one of the
methods listed above. If you sign your proxy and do not make a selection, your
shares will be voted as recommended by the Board. If you are a Dominion
Direct/SM/ participant and do not vote your proxy, we will vote all shares held
in that account according to the Board's recommendations. No vote will be
recorded for registered shares that are not properly voted.
2
Employee Savings and Thrift Plan Participants.
You will receive a request for Voting Instructions from the Trustee(s) for the
Plans. The share amounts listed on that form include the full and fractional
shares in your Plan account(s). You may instruct the Trustee(s) by:
1. Connecting to www.votefast.com;
2. Calling 1-800-542-1160; or
3. Returning your Voting Instructions in the enclosed envelope (not to
Dominion).
Complete instructions can be found on the Voting Instruction Card included with
the proxy statement. Whichever method you choose, the Trustee(s) will vote
according to your instructions and will keep your vote confidential. If you do
not vote your Savings or Thrift Plan shares, the Trustee(s) will vote your
shares according to each Plan's voting standards.
Rights. Each of your shares will be counted as one vote.
A majority of the shares outstanding on March 1, 2002 constitutes a quorum
for this meeting. Abstentions and shares held by a broker or nominee (Broker
Shares) that are voted on any matter are included in determining a quorum.
The 14 nominees for director receiving the most votes will be elected.
The Shareholder Proposals presented on p. 6 and 7 require more votes in favor of
each than the number of votes against each in order to be approved. Broker
shares not voted and abstentions have no effect on the final vote counted.
Attending the Meeting
Shareholders who plan to attend the meeting this year will be asked to present
valid picture identification, such as a driver's license or passport. Registered
shareholders must bring a Dominion DirectSM statement or dividend check stub as
proof of ownership. If you hold stock in a brokerage account ("street name"),
you must bring a copy of a brokerage statement. If you are an authorized proxy,
you must present the proper documentation. Registration will begin at 8:00 a.m.,
and seating will be available on a first come, first served basis. Cameras,
recording devices and other electronic devices will not be permitted at the
meeting.
Solicitation and Tabulation
We will pay for soliciting proxies from our shareholders, and some of our
employees may telephone shareholders after the initial mail solicitation. We
have also retained Georgeson Shareholder Communications Inc., a proxy
solicitation firm, to assist in the solicitation of proxies for a fee of $14,000
and reimbursement of expenses. In addition, we may reimburse brokerage firms and
other custodians, nominees and fiduciaries for their reasonable expenses in
sending proxy materials to the beneficial owners of stock. We have retained
Corporate Election Services, Inc. to tabulate the proxies and to assist with the
Annual Meeting.
3
ITEM ONE: ELECTION OF DIRECTORS
Each nominee for director and information about that nominee is listed below.
Directors are elected annually; therefore, each director's term of office will
end at the next annual meeting of shareholders.
Your proxy will be voted to elect the nominees unless you tell us otherwise. If
any nominee is not available to serve (for reasons such as death or disability),
your proxy will be voted for a substitute nominee if the Board nominates one.
Year First Elected a Director
Nominees for Election of Dominion (or Affiliate Company)
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WILLIAM S. BARRACK, JR., 72, former Senior Vice 2000
President, Texaco, Inc., New Canaan, Connecticut. (1994)
He is a Director of Standard Commercial Corporation.
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RONALD J. CALISE, 53, former Managing Director of 2001
the Global Power Industry Group, Investment Banking
Division, Lehman Brothers, New York, New York.
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THOS. E. CAPPS, 66, Chairman, President and Chief 1986
Executive Officer of Dominion (from January 28, 2000
to August 1, 2000, Vice Chairman, President and Chief
Executive Officer, and prior to that Chairman, President
and Chief Executive Officer). He is Chairman and a
Director of Virginia Electric and Power Company.
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GEORGE A. DAVIDSON, JR., 63, Retired Chairman of the 2000
Board of Directors of Dominion (from January 28, 2000 (1985)
to August 1, 2000, Chairman of Dominion, prior to that,
Chairman and Chief Executive Officer of Consolidated
Natural Gas Company). He is a Director of PNC Financial
Services Group, Inc. and Goodrich Corporation.
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JOHN W. HARRIS, 54, President, Lincoln Harris, LLC, 1999
a real estate consulting firm, Charlotte, North Carolina. (1994)
He is a Director of Piedmont Natural Gas Company, Inc.
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BENJAMIN J. LAMBERT, III, 65, Optometrist, Richmond, 1994
Virginia. He is a Director of Consolidated Bank & (1992)
Trust Company and USA Education, Inc. (Sallie Mae).
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RICHARD L. LEATHERWOOD, 62, Retired President and 1994
Chief Executive Officer, CSX Equipment, an operating
unit of CSX Transportation, Inc., Baltimore, Maryland.
He is a Director of CACI International Inc.
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4
Year First Elected a Director
Nominees for Election of Dominion (or Affiliate Company)
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MARGARET A. McKENNA, 56, President, Lesley 2000
University, Cambridge, Massachusetts. (1994)
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STEVEN A. MINTER, 63, President and Executive 2000
Director, The Cleveland Foundation, Cleveland, Ohio. (1988)
He is a Director of Goodyear Tire & Rubber Company
and KeyCorp.
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KENNETH A. RANDALL, 74, corporate director for 1971*
various companies, Williamsburg, Virginia.
He is a Director of Oppenheimer Mutual Funds, Inc.
and Prime Retail, Inc.
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FRANK S. ROYAL, M.D., 62, Physician, Richmond, 1994
Virginia. He is a Director of HCA, Inc., SunTrust Banks, Inc.,
Chesapeake Corporation and CSX Corporation.
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S. DALLAS SIMMONS, 62, Chairman, President and 1992
CEO of Dallas Simmons & Associates, a consulting firm,
Richmond, Virginia (prior to July 1, 1999, President,
Virginia Union University).
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ROBERT H. SPILMAN, 74, President, Spilman Properties, 1994
Inc., private investments, Bassett, Virginia (prior to
August 1, 1997, Chairman and Chief Executive Officer
of Bassett Furniture Industries, Inc.). He is a Director of
Birmingham Steel Company.
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DAVID A. WOLLARD, 64, Founding Chairman of the 1999
Board, Emeritus, Exempla Healthcare, Denver, Colorado. (1994)
Also former President of Bank One Colorado, N.A.
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*Service includes tenure on Virginia Electric and
Power Company Board prior to establishment of
Dominion as a holding company in 1983.
The Board of Directors recommends that you vote FOR these nominees.
5
ITEM TWO: SHAREHOLDER PROPOSALS
Dominion has been notified that two shareholders intend to present proposals for
consideration at the annual meeting. We will furnish upon request the name,
address and stock ownership of each proponent of the Proposals identified below.
Proposal 1:
"Be it resolved that the shareholders urge the Company to invest in new
electrical generation capacity from solar and wind sources to replace or add
approximately one percent (1%) of system capacity yearly for the next twenty
years with the goal of having the company producing twenty percent (20%) of
generation capacity from clean renewable sources in 20 years."
Supporting Statement:
"Utility deregulation demands the Company present a good public image, and the
public is demanding progress toward clean energy and a reduction in global
warming. Electric power utilities currently emit over 30% of the pollution that
now blankets the earth and causes global climate change.
I believe efforts must be made to slow down changes in global warming to prevent
a wide range of unintended, harmful and costly impacts including but not limited
to sea level rise, drought and desertification, other extreme weather events,
expansion of tropical diseases, and changes in the biosphere affecting animal
and plant life.
Solar and wind sources do not require the purchase of fossil fuels. As the costs
of these non-renewable fuels rise in the future, this renewable generation
capacity may achieve a return on investment over the long term. A mix in the
generation capacity will allow for small pilot facilities to be built and tried
as the program and technology advances.
Support for this resolution will indicate shareholder desire to gradually
de-emphasize the production of fossil fuels and to support the development of
more non-polluting, environmentally-friendly approaches to energy production.
Please vote `yes' for this resolution."
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Dominion's Opposing Statement
The Board recommends that shareholders reject this proposal. The Board could not
adopt such a policy because of its obligation under Virginia law to act in a
manner that is in the best interests of the corporation and that supplies
reliable energy to its customers. Current research and experience suggest that
these sources are not cost-effective or dependable sources of power.
Dominion is committed to meeting its customers' energy demand in an
environmentally responsible manner. The company continues to explore new sources
and expansion of existing sources of energy in the ordinary course of the
company's business.
The Board of Directors recommends that you vote AGAINST this shareholder
proposal.
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6
Proposal 2:
Resolved: That shareholders urge that the board of directors will solicit
shareholder approval for any "shareholder rights" plan that might be adopted,
and that if this approval is not granted in the form of a majority of shares
voted, then any rights plan be redeemed.
Supporting Statement:
Shareholder rights plans, sometimes called "poison pills," may be adopted by
boards at any time. Our company might redeem a pill, adopt another, and redeem
that one, three separate moves, between the time this resolution is filed in the
fall of 2001, and the time of the 2002 annual meeting in the spring. Yet I
believe shareholders frequently oppose pills when they are asked in a vote. This
resolution merely urges the board to secure shareholder approval if and when a
pill is put in place by the board. By adopting a policy that any shareholder
rights plan would be ratified by a shareholder vote, our board could demonstrate
a commitment to insure the greatest management care for shareholders.
Pills have come to represent management insulation.
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Dominion's Opposing Statement
The Board recommends that shareholders reject this proposal. Dominion does not
have a shareholder rights plan, and is not considering adopting a shareholder
rights plan. Under Virginia law, the Board can adopt a shareholder rights plan
only if it finds that such a plan is in the best interests of the company.
Shareholder rights plans are not intended to prevent takeovers. They are
designed to help the Board negotiate a deal at a price and on terms that are in
the best interests of the company and the shareholders. They protect against
hostile acquirers using tactics to obtain companies for the cheapest price
possible, and doing so in a manner that may result in unequal shareholder
treatment.
The Board of Directors recommends that you vote AGAINST this shareholder
proposal.
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7
THE BOARD
Committees & Meeting Attendance
The Board met seven times in 2001. Each Board member attended all meetings of
the Board and committees on which he or she served.
Committee Members Description
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Audit S. Dallas Simmons, These four non-employee directors consult with the independent and internal
Chairman auditors regarding the examination of Dominion and its subsidiaries'
John W. Harris (collectively, the Company) financial statements, the adequacy of internal
Margaret A. McKenna controls and the independence of auditors. The committee's report to
Steven A. Minter shareholders can be found on p. 11. As required by New York Stock Exchange
rules, the committee is comprised of independent directors and has a written
Charter, which was provided in the 2001 proxy statement. It also recommends to
the Board the independent auditors to be designated for the next year. In 2001,
this committee met two times, and Dr. Simmons met with management and the
independent auditors prior to each quarter's earnings release.
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Finance William S. Barrack, Jr., These four non-employee directors review the Company's financing strategies and
Chairman consider dividend policy. In 2001, this committee met two times.
Ronald J. Calise
Benjamin J. Lambert, III
David A. Wollard
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Organization, Kenneth A. Randall, These four non-employee directors work closely with independent consultants and
Compensation Chairman management to review the Company's organizational and compensation structure.
and Nominating Richard L. Leatherwood They make recommendations on these matters to the Board and administer certain
Frank S. Royal compensation plans. They also review the qualifications of director candidates
Robert H. Spilman suggested by Board members, management, shareholders and others, and recommend
nominees for election as directors. In 2001, this committee met five times.
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Risk Oversight Ronald J. Calise, In December 2001, the Board established this committee to work with the
Chairman Company's treasury group to oversee and advise management on its policies and
Richard L. Leatherwood guidelines regrding energy trading.
David A. Wollard
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8
Compensation and Other Programs
Fees. Director fees did not increase in 2001. Non-employee directors were paid
an annual retainer of $40,000 -- $20,000 in cash and $20,000 in shares of
Dominion stock. They also received $1,200 in cash per Board or committee meeting
attended.
Options. In keeping with the philosophy that governs executive compensation (see
p. 12), in July 2001 the Board granted 12,000 options to each non-employee
director at the then current market price of $59.96 per share. One third of
these options will become exercisable on January 1, 2003, 2004 and 2005 and will
expire in thirds, five years from the respective vesting date.
Deferred Cash Compensation Plan. Directors may elect to defer their cash fees
under this plan until they reach retirement or a specified age. The deferred
fees are credited to either an interest bearing account or a Dominion common
stock equivalent account. Interest or dividend equivalents accrue until
distributions are made. A director will be paid in cash or stock according to
the election made.
Stock Compensation Plan. The stock portion of the directors' retainer is paid
under this plan. Directors have the option to defer receipt of the stock. If a
director elects this option, the shares are held in trust until the director's
retirement and the dividends on those shares are reinvested. However, the
director retains all voting and other rights as a shareholder.
Stock Accumulation Plan. Upon election to the Board, a non-employee director
receives a one-time award under this plan. The award is in Stock Units, which
are equivalent in value to Dominion common stock. The award amount is determined
by multiplying the director's annual cash retainer by 17, then dividing the
result by the average price of Dominion common stock on the last trading days of
the three months before the director's election to the Board. The Stock Units
awarded to a director are credited to a book account. A separate account is
credited with additional Stock Units equal in value to dividends on all Stock
Units held in the director's account. A director must have 17 years of service
to receive all of the Stock Units awarded and accumulated under this plan.
Reduced distributions may be made where a director has at least 10 years of
service.
Charitable Contribution Program. Dominion had offered its directors
participation in a Directors' Charitable Contribution Program. The program is
funded by life insurance policies purchased by Dominion on the directors. The
directors derive no financial or tax benefits from the program, because all
insurance proceeds and charitable tax deductions accrue solely to Dominion.
However, upon the death of a director, Dominion will donate an aggregate of
$50,000 per year for ten years to one or more qualifying charitable
organizations recommended by that director. Effective in January 2000, this
program was discontinued. Directors elected to the Board after January 28, 2000
do not participate in this program.
Matching Gifts Program. Directors may give up to $1,000 per year to 501(c)(3)
organizations of their choice, and Dominion will match their donations on a
1-to-1 basis, with a maximum of $5,000 of matching funds per director per year.
If a director's donation is to an organization on whose board they serve or for
which they volunteer more than 50 hours of work during a year, Dominion will
match the donation on a 2-to-1 basis.
Director Nominations
Under our Bylaws, if you wish to nominate a director at a shareholder's meeting
you must be a shareholder and deliver written notice to our Corporate Secretary
at least 60 days before the meeting. If the meeting date has not been publicly
announced 70 days before the meeting, then notice can be given 10 days following
the public announcement. Any notice must include the following information:
1. your name and address;
2. each nominee's name and address;
3. a statement that you are entitled to vote at the meeting and intend to
appear in person or by proxy to nominate your nominees;
4. a description of all arrangements or undertakings between you and each
nominee and any other person concerning the nomination;
5. other information about the nominee that would be included in a proxy
statement soliciting proxies for the election of directors; and
6. the consent of the nominee to serve as a director.
9
SHARE OWNERSHIP TABLE
Beneficial Share Ownership of Common Stock Other Plan Accounts
Exercis- Deferred
Deferred able Stock Cash
Name of Stock Restricted Stock Accumu- Compen-
Beneficial Owner Shares Accounts/1/ Shares Options Total lation/2/ sation/3/
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William S. Barrack, Jr. 1,134 905 - - 2,039 8,866 11,501
Ronald J. Calise 1,000 169 - - 1,169 5,642 305
Thos. E. Capps/4/ 326,309 - 16,667 1,233,000 1,575,976 - -
George A. Davidson, Jr. 123,314 - - - 123,314 - 3,283
John W. Harris 5,108 1,348 - 10,000 16,456 11,256 2,141
Benjamin J. Lambert, III 94 1,933 - 10,000 12,027 11,256 1,684
Richard L. Leatherwood 1,000 1,933 - 10,000 12,933 11,256 14,139
Margaret A. McKenna 4,803 905 - - 5,708 8,866 467
Steven A. Minter 2,421 905 - - 3,326 8,866 7,267
Kenneth A. Randall 5,571 - - 10,000 15,571 11,256 -
Frank S. Royal - 1,933 - 10,000 11,933 11,256 1,661
S. Dallas Simmons 4,108 773 - 10,000 14,881 11,256 3,035
Robert H. Spilman 2,976 - - 10,000 12,976 11,256 -
David A. Wollard 2,544 - - 10,000 12,544 11,256 -
Thomas N. Chewning 109,549 - 8,333 450,000 567,882 - 158
Thomas F. Farrell, II/4/ 142,915 - 10,000 450,000 602,915 - -
James P. O'Hanlon 103,500 - 8,333 350,000 461,833 - -
Edgar M. Roach, Jr. 141,964 - 10,000 450,000 601,964 - 1,593
Robert E. Rigsby/5/ 52,432 - 11,893 350,000 414,325 - -
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All directors and executive
officers as a group
(25 persons)/6/ 1,244,790 10,804 104,292 3,813,715 5,173,601 122,288 47,485
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1. Shares held in Trust for which a director has voting rights.
2. Amounts represent share equivalents that do not have voting rights. Because
of this plan's vesting provisions (described on p.9), these amounts will not
necessarily be distributed to a director.
3. Amounts represent cash compensation deferred by the director or executive in
a stock equivalent account without voting rights until a specified age or
retirement. Final payment will be made in cash or stock.
4. Messrs. Capps and Farrell disclaim ownership for 323 and 399 shares,
respectively.
5. Mr. Rigsby's ownership is reported as of December 1, 2001, the date he ceased
to be an executive.
6. All directors and executive officers as a group own 1.9 percent of the number
of shares outstanding at March 1, 2002.
10
THE AUDIT COMMITTEE
Audit Committee Report
Our Committee reviews Dominion's financial reporting process on behalf of the
company's Board. Management has the primary responsibility for the financial
statements and the reporting process, including the system of internal controls.
Communication with Management and Independent Auditors
During the year, it is our practice to review and discuss the following with
management and the independent auditors:
o Year-end results prior to public disclosure.
o Risk management policies, procedures and guidelines implemented by
Dominion's financial management group to manage and mitigate business
and financial risks. The Board has further expanded their oversight
with the establishment of a Risk Oversight Committee charged with
reviewing the company's trading activities.
o Dominion's compliance program established by the company's law
department to educate employees and promote lawful and ethical
behavior.
In addition, on a quarterly basis, the Chair of our committee meets with
management and the independent auditors to discuss quarterly results before
public disclosure.
With this background, management has represented that Dominion's consolidated
financial statements were prepared in accordance with generally accepted
accounting principles. We reviewed and discussed the consolidated financial
statements with management and the independent auditors. In accordance with the
requirements established by the Statement on Auditing Standards No. 61,
Communication with Audit Committees, (as amended by Auditing Standards 89 and
90), this discussion included a review of significant accounting estimates and
controls, and the quality of Dominion's accounting principles.
Independence of the Auditors and the Committee
It is our practice to review with management any significant engagements with
the company's independent auditors that are not audit-related. We also discuss
with Dominion's internal and independent auditors the overall scopes and plans
for their respective audits. At each of our meetings, we meet with the internal
and independent auditors, with and without management present, to discuss the
results of their examinations, the evaluations of Dominion's internal controls,
and the overall quality of its financial reporting.
We have received a letter from our independent auditors required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees
and have discussed with our independent auditors the issue of their independence
from Dominion, including any non-audit services performed by them. We have
determined that the provision of these services does not affect their
independence.
2001 Consolidated Financial Statements
Relying on these reviews and discussions, we recommended to the Board, and the
Board approved, that the audited financial statements be included in Dominion's
Annual Report on Form 10-K for the year ended December 31, 2001, for filing with
the Securities and Exchange Commission.
S. Dallas Simmons,
Chairman
John W. Harris
Margaret A. McKenna
Steven A. Minter
January 22, 2002
11
ORGANIZATION, COMPENSATION & NOMINATING COMMITTEE REPORT
Compensation Philosophy
Our Committee and management believe it is vitally important to align our
officers' financial success with the financial success of our shareholders. As a
result, we have developed programs that encourage our executives to own and hold
stock through ownership guidelines, forfeiture provisions in option grant
agreements and strong internal policies and oversight regarding stock
transactions. We work closely with management so that these programs continue to
attract, retain and motivate high caliber employees.
Our 2001 executive compensation program put a substantial portion of our
executives' annual pay at risk and was tied to the achievement of aggressive
financial performance measures. We continued heavy emphasis on stock ownership
through grants of options and restricted stock. As we face the economic
challenges of 2002, we plan to continue that emphasis, but have determined not
to increase executive base salaries in 2002.
2001 Compensation
Our 2001 executive compensation program consisted of three basic components:
o Base Salary
o Annual Incentives
o Long-Term Incentives
Base Salary
As reported last year, our Committee positioned 2001 executive base salaries to
be between the median and 75th percentile of base salaries of similar positions
at a peer group of diversified energy companies and other businesses with which
we compete on a national basis. Our decisions in this regard were based on
retention concerns, market data and individual performance.
Executive Officers. An independent compensation consultant analyzed our
executives' salaries and compared them to our competitive labor market. Our
Committee also reviewed individual executive performance. Based on our review
and the consultant's report, base salaries were increased effective January 1,
2001.
Chief Executive Officer. In determining Mr. Capps' base salary adjustment for
2001, our Committee continued to focus on his contributions to Dominion's
long-term business strategy and his leadership in guiding Dominion through
acquisitions, the increasingly challenging energy industry, and the competitive
general business environment. We reviewed competitive compensation information
for CEOs within our peer group of diversified energy companies. Keeping in mind
our compensation philosophy, we thoroughly evaluated this material and approved
an annual base salary of $1,000,000 for Mr. Capps, effective January 1, 2001.
Annual Incentives
Under the annual incentive program, if goals are achieved or exceeded, the
executive's total cash compensation for the year is targeted to be between the
median and 75th percentile of total cash compensation for similar positions at
companies in our executive labor market.
Under this program our Committee establishes "target awards" for each executive
officer. These target awards are expressed as a percentage of the individual
executive's base salary (for example, 40% x base salary). The target award is
the amount of cash that will be paid, at year-end, if the executive achieves
100% of the goals established at the beginning of the year. We also establish a
"threshold" -- or minimum acceptable level of financial performance. If this
threshold is not met, no executive receives an annual bonus. Actual bonuses, if
any, are based on a pre-established formula and may exceed 100% of the target
award.
Executive Officers. For Dominion's executive officers, the 2001 annual incentive
plan did not differ from the 2000 plan, in that earnings per share was used as
the performance measure. However, each executive's goals were weighted more
consistently on a combination of corporate earnings per share, business unit
earnings per share and operating goals.
Our Committee established and approved the goals at the beginning of 2001. At
year-end, we compared the company's actual financial performance with the
consolidated and business unit earnings per share goals. For 2001, these goals
were substantially achieved.
12
Earnings per share for the business segments are reported in the Management's
Discussion and Analysis section of our 2001 Annual Report to Shareholders.
Annual bonuses paid to the named executives are detailed in the Summary
Compensation Table on the next page.
Chief Executive Officer. At the beginning of 2001, we approved a consolidated
earnings per share goal for Mr. Capps. Because our earnings per share goal for
2001 was achieved, we approved an annual cash bonus of $1,250,000 for Mr. Capps.
Long-Term Incentives
We believe the long-term incentive programs we approve play a critical part in
our compensation practices and philosophy. As discussed in our 2001 report, 2001
long-term incentives focused on stock ownership in the form of stock options and
restricted stock. Options were granted at 100% of the Fair Market Value of the
company's stock price on the date of grant. We believe the combination of
options and restricted stock provides balance to our long-term incentive program
and that these forms of long-term incentives underscore commitment to the
company while rewarding performance.
Executive Officers. In 2001, shares of restricted stock were granted to
executives and are reported in the table on p. 14. The shares will remain
restricted for three years and will be forfeited if the executive officer's
employment with the company ends (other than retirement) prior to that time.
Stock options also were granted to executives in 2001 and are reported in the
table on p. 14. One-third of these options will become exercisable on each
January 1st of 2003, 2004, and 2005. One-third of the options expires on each
January 1st of 2008, 2009, and 2010.
Chief Executive Officer. Mr. Capps received 16,667 shares of restricted stock on
January 26, 2001 that will remain restricted until January 26, 2004. Also, Mr.
Capps received a grant of 1,200,000 nonqualified stock options at $59.96 per
share. One third of these options will become exercisable on each January 1st of
2003, 2004 and 2005 and will expire in thirds, five years from the respective
vesting date.
Stock Ownership Guidelines
Our Committee reported to you in 2000 that we adopted stock ownership guidelines
for our executive officers and we reconfirmed these guidelines (outlined below)
in 2001. These guidelines combined with other option grant provisions and
internal policies emphasize stock ownership and retention that align management
with the interests of our shareholders. We also recently established an
Executive Stock Purchase Tool Kit (described on p. 19) to assist executives in
meeting the guidelines. As reported under the Share Ownership Table on p. 10,
the executive officers named in the executive compensation table have met these
guidelines.
Stock Ownership Guidelines *
Positions Share Ownership
--------------------------------------------------------------------------------
Chairman, Chief Executive Officer 145,000
Executive Vice President 35,000
CEO--Operating Companies
Senior Vice President 20,000
--------------------------------------------------------------------------------
Vice President 10,000
--------------------------------------------------------------------------------
* Officers have up to five years to meet the guidelines.
Deductibility of Compensation
Under Section 162(m) of the Internal Revenue Code, Dominion may not deduct
certain forms of compensation in excess of $1 million paid to our CEO or any of
the four other most highly compensated executive officers. However, certain
performance-based compensation is specifically exempt from the deduction limit.
It is our intent to provide competitive executive compensation while maximizing
the company's tax deduction. However, we reserve the right to approve, and in
some cases have approved, non-deductible compensation if we believe it is in the
company's best interest.
Kenneth A. Randall,
Chairman
Richard L. Leatherwood
Frank S. Royal
Robert H. Spilman
February 14, 2002
13
EXECUTIVE COMPENSATION
The table below shows the total salary and other compensation awarded to or
earned by the CEO and the other most highly compensated executive officers as of
December 31, 2001.
Summary Compensation Table
------------------------------------------------------------------------------------------------------------------------------------
Name and Annual Compensation Long-Term Compensation
Principal Position ---------------------------------------------------------------------------------------------------
Awards Payouts
Other ------------------------------------
Annual Restricted Securities
Compen- Stock Underlying LTIP All Other
Year Salary/(1)/ Bonus sation/(2)/ Awards/(3)/ Options/SARs Payouts Compensation/(4)/
($) ($) ($) ($) (#) ($) ($)
------------------------------------------------------------------------------------------------------------------------------------
Thos. E. Capps 2001 1,000,000 1,250,000 214,860 1,059,354 1,200,000 0 265,725
Chairman, 2000 925,000 1,495,528 707,496 0 219,397 959,633 232,525
President & CEO 1999 828,439 481,021 15,942 0 1,233,000 1,093,865 4,8007
------------------------------------------------------------------------------------------------------------------------------------
Thomas F. Farrell, II 2001 560,577 467,500 99,312 635,600 600,000 0 133,285
Executive 2000 484,134 577,985 100,285 0 112,663 389,040 121,885
Vice President 1999 325,174 187,148 314 0 450,000 366,781 3,486
(CEO of
Dominion Energy)
------------------------------------------------------------------------------------------------------------------------------------
Edgar M. Roach, Jr. 2001 560,577 467,500 113,623 635,600 500,000 0 131,635
Executive 2000 484,134 577,985 132,194 0 112,663 389,040 121,238
Vice President 1999 305,770 162,277 8,035 0 450,000 366,145 3,382
(CEO of
of Dominion Delivery)
------------------------------------------------------------------------------------------------------------------------------------
Thomas N. Chewning 2001 407,692 300,000 91,603 529,645 450,000 0 106,499
Executive 2000 382,211 418,800 84,646 0 88,945 307,137 97,300
Vice President, CFO 1999 334,511 186,156 2,871 0 450,000 339,659 4,800
------------------------------------------------------------------------------------------------------------------------------------
James P. O'Hanlon 2001 400,000 300,000 79,875 529,645 350,000 0 106,558
Executive 2000 384,999 429,944 79,701 0 91,316 315,328 99,758
Vice President 1999 348,700 189,580 0 0 350,000 186,856 355,800
(President & COO
Dominion Energy)
------------------------------------------------------------------------------------------------------------------------------------
Robert E. Rigsby/(5)/ 2001 407,692 300,000 26,184 529,645 200,000 0 46,965
Executive Vice 2000 392,403 303,608 26,184 0 30,000 323,245 36,198
President (President 1999 291,162 218,253 0 0 350,000 286,500 4,795
& COO of Dominion
Delivery - retired)
------------------------------------------------------------------------------------------------------------------------------------
Footnotes to the Summary Compensation Table
/(1)/ Salary. Amounts shown may include vacation sold back to Dominion.
/(2)/ Other Annual Compensation Column. None of the named executives received
perquisites or other personal benefits in excess of $50,000 or 10% of their
total cash compensation. The amounts listed in this column for 2001 are tax
payments.
14
3. The number and value of each executive's restricted stock holdings at
year-end, based on a December 31, 2001 closing price of $60.10 per share, were
as follows:
Number of Vesting
Officer Restricted Shares* Value Schedule
(#) ($)
--------------------------------------------------------------------------------
Thos. E. Capps 21,436 1,288,304 2 years
16,667 1,001,687 3 years
Thomas F. Farrell, II 4,558 273,936 2 years
10,000 601,000 3 years
Edgar M. Roach, Jr. 4,550 273,455 2 years
10,000 601,000 3 years
Thomas N. Chewning 4,221 253,682 2 years
8,333 500,813 3 years
James P. O'Hanlon 2,322 139,552 2 years
8,333 500,813 3 years
Robert E. Rigsby** 3,560 213,956 2 years
8,333 500,813 3 years
--------------------------------------------------------------------------------
* Dividends are paid on restricted shares.
** Mr. Rigsby's restricted stock vested upon his retirement.
4. All Other Compensation. The amounts listed for 2001 are as follows:
ExecStock Employee
Purchase& Savings
Employee Loan Program Plan Match
Savings Plan Interest above IRS
Officer Match Plan Subsidy Limits
--------------------------------------------------------------------------------
Thos. E. Capps $5,100 $227,425 $33,200
Thomas F. Farrell, II 5,100 116,785 11,400
Edgar M. Roach, Jr. 5,100 116,785 9,750
Thomas N. Chewning 5,100 92,199 9,200
James P. O'Hanlon 5,100 94,658 6,800
Robert E. Rigsby 6,667 31,098 9,200
--------------------------------------------------------------------------------
5. At December 31, 2001, Mr. Rigsby was not serving as an executive officer of
Dominion, but is listed in this table in accordance with proxy rules.
Option/SAR Grants in Last Fiscal Year/1/
Number % of Total
of Securities Options/SARs
Underlying Granted to
Options/SARs Employees Exercise or Expiration Grant Date
Officer Granted/1/ in Fiscal Year/2/ Base Price Date Present Value/3/
(#) (%) ($/share) ($)
------------------------------------------------------------------------------------------------------------------------
Thos. E. Capps 400,000 2.9 59.96 1-1-08 4,336,000
400,000 2.9 59.96 1-1-09 4,380,000
400,000 2.9 59.96 1-1-10 4,420,000
Thomas F. Farrell, II 200,000 1.5 59.96 1-1-08 2,168,000
200,000 1.5 59.96 1-1-09 2,190,000
200,000 1.5 59.96 1-1-10 2,210,000
Edgar M. Roach, Jr. 166,667 1.2 59.96 1-1-08 1,806,670
166,666 1.2 59.96 1-1-09 1,824,993
166,666 1.2 59.96 1-1-10 1,841,659
Thomas N. Chewning 150,000 1.1 59.96 1-1-08 1,626,000
150,000 1.1 59.96 1-1-09 1,642,500
150,000 1.1 59.96 1-1-10 1,657,500
James P. O'Hanlon 116,667 0.9 59.96 1-1-08 1,264,670
116,667 0.9 59.96 1-1-09 1,277,504
116,666 0.9 59.96 1-1-10 1,289,159
Robert E. Rigsby 66,667 0.5 59.96 1-1-08 722,670
66,667 0.5 59.96 1-1-09 730,004
66,666 0.5 59.96 1-1-10 736,659
1. Nonstatutory stock options were granted on July 1, 2001 to the named
executives at an exercise price of $59.96 per share, which equaled 100% of the
Fair Market Value of the shares on the date of grant. The shares vest one-third
per year on each January 1 of 2003, 2004 and 2005. They expire five years from
the vesting date.
2. The total number of options granted in 2001 to employees and outside
directors was 13,615,328.
15
EXECUTIVE COMPENSATION (Continued)
3. The Black-Scholes pricing model was used to calculate the present value of
the stock options. The assumptions underlying this model are:
Expiration Date: 1-1-08 1-1-09 1-1-10
------------------------------------------------------------
Volatility: 22.24% 22.24% 22.24%
Risk Free Rate: 5.14% 5.24% 5.33%
Dividend Yield: 4.30% 4.30% 4.30%
Option Value: $10.84 $10.95 $11.05
------------------------------------------------------------
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options/SARs at FY-End Options/SARs at FY-End
Shares Acquired Value ---------------------------------- --------------------------------
on Exercise Realized Exercisable Unexercisable Exercisable/1/ Unexercisable/1/
Officer (#) ($) (#) (#) ($) ($)
---------------------------------------------------------------------------------------------------------------------
Thos. E. Capps 0 0 1,233,000 1,200,000 23,242,050 168,000
Thomas F. Farrell, II 0 0 450,000 600,000 8,482,500 84,000
Edgar M. Roach, Jr. 0 0 450,000 500,000 8,482,500 70,000
Thomas N. Chewning 0 0 450,000 450,000 8,482,500 63,000
James P. O'Hanlon 0 0 350,000 350,000 6,597,500 49,000
Robert E. Rigsby/2/ 150,000 2,592,150 200,000 200,000 3,770,000 28,000
---------------------------------------------------------------------------------------------------------------------
1. Spread between the market value at year-end minus the exercise price.
Year-end stock price was $60.10 per share.
2. At December 31, 2001, Mr. Rigsby was not serving as an executive officer of
Dominion. He retired on February 1, 2002.
Performance Graph
The tables below show the five year cumulative total return comparison
between Dominion, the S&P 500 Index and the S&P Utility Index.
[PERFORMANCE GRAPH}
Retirement Plans
The table below shows the estimated annual straight life benefit that Dominion
would pay to an employee at normal retirement (age 65) under the benefit formula
of the Retirement Plan.
Estimated Annual Benefits
Payable Upon Retirement at Age 65
--------------------------------------------------------------------------------
Final Credited Years of Service
Average ----------------------------------------
Compensation 15 years 20 years 25 years 30 years
--------------------------------------------------------------------------------
$ 300,000 $77,073 $102,579 $128,085 $153,591
350,000 90,666 120,672 150,678 180,684
400,000 104,258 138,764 173,270 207,776
450,000 117,851 156,857 195,863 234,869
500,000 131,443 174,949 218,455 261,961
550,000 145,036 193,042 241,048 289,054
600,000 158,629 211,135 263,641 316,147
650,000 172,221 229,227 286,233 343,239
700,000 185,814 247,320 308,826 370,332
750,000 199,406 265,412 331,418 397,424
800,000 212,999 283,505 354,011 424,517
850,000 226,591 301,597 376,603 451,609
900,000 240,184 319,690 399,196 478,702
950,000 253,776 337,782 421,788 505,794
1,000,000 267,369 355,875 444,381 532,887
--------------------------------------------------------------------------------
16
Dominion Retirement Plan. Benefits under the Retirement Plan are based on:
o highest average base salary over a five-year
period during the 10 years preceding retirement;
o years of credited service;
o age at retirement; and
o the offset of Social Security benefits.
In 2001, the Company introduced a Special Retirement Account (SRA) feature to
the Pension Plan. This account is credited with 2% of an employee's base salary
that is earned during the year. Account balances grow with interest based on the
30-year Treasury Bond rate. The impact of this feature is reflected in the above
table.
In addition, certain officers, if they reach a specified age while still
employed, will be credited with additional years of service. For the executives
named in the Summary Compensation Table on p. 14, credited years of service at
age 60 would be 30 years. Other retirement agreements and arrangements for the
named executives are described under Other Executive Agreements and
Arrangements.
2001 Dominion Retirement Benefit Restoration Plan. The Retirement Plan pays a
benefit that is calculated on average base salary over a five-year period. In
some years our executives' base salaries were set below the competitive market
median in order to more closely link annual pay to company performance through
the incentive programs. In connection with the Restoration Plan, we calculate a
"market-based adjustment" to base salary in those years when base salary was
below the market median. The difference between the benefit calculated on the
market-based salary and the benefit provided by the Retirement Plan is paid to
the executive under the Restoration Plan.
In 2001, a market-based adjustment to Dominion's executive base salaries was not
necessary.
Also, the Internal Revenue Code imposes certain limits related to Retirement
Plan benefits. Any resulting reductions in an executive's Retirement Plan
benefit will be compensated for under the Restoration Plan.
Executive Supplemental Retirement Plan. The Supplemental Plan provides an annual
retirement benefit equal to 25% of a participant's final cash compensation (base
salary plus target annual bonus). To retire with full benefits under the
Supplemental Plan, an executive must be 55 years old and have been employed by
Dominion for at least five years. Benefits under the plan are provided either as
a lump sum cash payment at retirement or as a monthly annuity typically paid
over 10 years. Certain executive officers receive this benefit for their
lifetime. Based on 2001 cash compensation, the estimated annual benefit under
this plan for certain executives named in the Summary Compensation Table on p.
14 are: Mr. Capps: $562,500; Mr. Farrell: $254,375; Mr. Roach: $254,375; Mr.
Chewning: $175,000; Mr. O'Hanlon: $175,000; and Mr. Rigsby: $175,000.
Other Executive Agreements and Arrangements
Companies that are in a rapidly changing industry such as ours require the
expertise and loyalty of exceptional executives. Not only is the business itself
competitive, but so is the demand for such executives. In order to secure the
continued services and focus of key management executives, Dominion has entered
into certain agreements with them, including those named in the Summary
Compensation Table on p. 14.
Employment Agreement -- Chief Executive Officer. The Board determined in
April 1999 that it was in Dominion's best interest to secure Mr. Capps'
employment as CEO and President until the Annual Meeting of Shareholders in
2005. As a result, Mr. Capps and Dominion entered into an agreement providing
for his employment as CEO and President until 2005. During his employment, the
agreement provides for the following: (1) an annual base salary of at least
$812,800, (2) incentive compensation awards based on performance and (3)
continued eligibility for all employee benefit and incentive plans provided by
Dominion to its senior management. When his employment ends (whether or not
before the end of the term of the agreement), Mr. Capps will: (1) receive a
retirement benefit calculated on the highest base salary rate during his
employment, (2) receive a Supplemental Plan benefit payable for life, (3)
become fully vested in outstanding restricted stock, and (4) receive a payment
of $950,000 plus an amount equal to the present value of his salary and annual
cash incentives for the period between the Annual Meetings of Shareholders for
2004 and 2005. In addition, any outstanding stock options become fully
exercisable for the remaining term of the grant. During the term of the
agreement, Dominion may terminate Mr. Capps
17
for cause only. Mr. Capps also receives age and service credit and continued
benefit plan coverage through the end of the contract period in the event of
termination for cause or resignation for cause.
Employment Agreements--Other Executives. Messrs. Chewning, Farrell, Roach and
O'Hanlon each have enhanced retirement benefits, as well as employment
continuity and non-compete agreements as described below.
Special Arrangements. Dominion has entered into employment continuity agreements
with executives named in the Summary Compensation Table, which provide benefits
in the event of a change in control.* Each agreement has a three-year term and
is automatically extended for an additional year, or extended for an
additional period in the event of a potential change of control, unless
cancelled by Dominion.
* A change in control shall be deemed to have occurred if (i) any person or
group becomes a beneficial owner of 20% or more of the combined voting power of
Dominion voting stock or (ii) as a direct or indirect result of, or in
connection with, a cash tender or exchange offer, merger or other business
combination, sale of assets, or contested election, the Directors constituting
the Dominion Board before any such transactions cease to represent a majority of
Dominion or its successor's Board within two years after the last of such
transactions.
The agreements provide for the continuation of salary and benefits for a maximum
period of three years after either (1) a change in control, (2) termination
without cause following a change in control or (3) a reduction of
responsibilities, salary and incentives following a change in control (if the
executive gives 60 days notice). Payment of this benefit will be made in either
a lump sum or installments over three years. In addition, the agreements
indemnify the executives for potential penalties related to the Internal Revenue
Code and fees associated with the enforcement of the agreements. If an executive
is terminated for cause, the agreements are not effective.
Dominion has also entered into supplemental agreements with Messrs. Chewning and
Farrell. Upon retirement, each of them will receive a payment of 12 months base
salary for their agreement not to compete with any activities of Dominion nor
solicit any Dominion employees for a period of two years. Under supplemental
agreements with Mr. Roach, he will receive a payment of six months base salary
for the same non-compete provisions listed above and a payment of 12 months base
salary at retirement.
Mr. Rigsby resigned from his officer positions with Dominion and its
subsidiaries effective December 1, 2001, and retired effective February 1, 2002.
In accordance with employment and retirement agreements, he received a lump sum
payment equal to 18 months salary and accelerated vesting and extended
expiration dates on options he held. He also received other enhanced retirement
and miscellaneous benefits.
Executive Deferred Compensation Plan. Under this plan, executives may defer any
portion of their cash compensation. Deferrals are credited at the executive's
discretion, for bookkeeping purposes, with earnings and losses as if they were
invested in any of several mutual fund options or Dominion common stock.
Distributions are made at the direction of the executive.
Also, under this Plan, executives may defer gains received as a result of a
stock option exercise. Stock option gain deferrals must be invested in Dominion
common stock. Under this Plan, Dominion also credits the accounts of eligible
executives with the amount of "lost" company matching contributions under
Dominion's Employee Savings Plan as a result of Internal Revenue Code Section
401(a)(17).
Executives may defer their benefits under the Executive Supplemental Retirement
Plan and the Benefit Restoration Plan if they elect to receive these payments in
the form of a lump sum at retirement.
Executive Stock Purchase and Loan Programs.
At the end of 1999, Dominion's Board approved stock ownership target levels for
executives of Dominion and its subsidiaries. The Board also approved the Stock
Purchase and Loan Programs intended to encourage and facilitate executives'
ownership of common stock through the availability of loans guaranteed by
Dominion.
Under the Programs, loans must be used to purchase Dominion common stock. An
executive may borrow up to ten times his or her base salary, subject to credit
approval, for a term of five years. Executives who meet their target ownership
level through their participation in the Program receive "bonus shares" equal to
five percent of the number of shares purchased under the program. The dividends
on the stock purchased through the program are used to pay the interest on the
loan. Dominion subsidizes the interest payments to
18
the extent that the current dividend rate does not fully cover the payments.
Dominion will end its subsidy of the loan if it is pre-paid or if the stock is
sold. As of December 31, 2001 our officers have borrowed in aggregate $84.1
million, for which they are personally liable and which Dominion has guaranteed.
Executive Stock Purchase Tool Kit. During 2001, our Committee reconfirmed
the stock ownership guidelines for executives of Dominion and its subsidiaries
as described on p. 13. The Committee approved the implementation of the
Executive Stock Purchase Tool Kit to encourage ownership of Company stock by
executives who could not participate in the Executive Stock Purchase Loan
Program offered in 2000. The Tool Kit consists of a variety of programs,
including bonus deferrals, restricted stock exchanges, stock purchases through
Dominion Direct/SM/ and the availability of loans guaranteed by Dominion.
Executives who participate in one or more of the Tool Kit programs to achieve
their stock ownership target levels receive "bonus shares" up to ten percent of
the value of their investment in Company stock. As of December 31, 2001, our
officers had borrowed an aggregate of $1 million, for which they are personally
liable and which Dominion has guaranteed under the Tool Kit.
Section 16(a) Beneficial Ownership Reporting Compliance.
Our directors and officers report their Dominion stock transactions to the SEC.
The majority of those transactions are reported on an annual Form 5 that reports
nondiscretionary changes in their ownership under various stock plans, in
addition to any option grants in a given year. Due to administrative oversight,
the Form 5 filings for James L. Trueheart (now retired) for the year-ended 2000
did not report an exempt transaction and for George A. Davidson for the
year-ended 2001 did not report three exempt transactions. Both filings have been
corrected. Mr. Trueheart's filings omitted an option grant that occurred
coincident with a mid-year promotion. Mr. Davidson's filing did not
appropriately identify a cash distribution of equivalent share amounts from an
executive deferred compensation plan, which became payable following his
retirement as Chairman.
19
AUDITORS
With the review and recommendation of the Audit Committee, the Board has
re-appointed Deloitte & Touche LLP, independent certified public accountants, as
auditors of the 2002 consolidated financial statements of Dominion and its
subsidiaries. Representatives of D&T will be present at the Annual Meeting.
They will have an opportunity to make a statement if they desire, and will be
available to respond to shareholder questions.
Fees
The following table presents fees paid to D&T for the fiscal year ended December
31, 2001.
Fees for Services* Amount
(Millions)
-------------------------------------------------------------------------------
Audit fees $2.61
All other fees
Audit-related 1.88
Non-audit related 0
-------
1.88
--------------------------------------------------------------------------------
$ 4.49
=======
-------------------------------------------------------------------------------
* D&T did not render any services related to financial information systems
design and implementation.
Dominion defines audit-related fees as services related to SEC matters,
statutory audits, tax consultation, due diligence assistance related to
acquisitions, divestitures and investments, and consultation on new accounting
standards. The SEC defines these services as non-audit, and therefore these fees
are included in all other fees. Of the $1.88 million listed in the table, $1.22
million was paid to D&T for services related to SEC matters, such as
registration statements and comfort letters and consents for filings. As stated
in the Audit Committee's report (p. 11), it is Dominion's practice to seek the
committee's approval for any significant engagement of D&T for non-audit related
services and, where appropriate, to seek competitive bids for such services.
Matters Before the 2002 Annual Meeting
The management and directors are not aware of any matters that may come before
the Annual Meeting other than the matters disclosed in this proxy statement.
Proposals for the 2003 Annual Meeting
Under our Bylaws, if you wish to bring any matter (other than shareholder
nominations of director candidates) before the 2003 Annual Meeting, you must
notify the Corporate Secretary in writing no later than January 27, 2003.
Regarding each matter, the notice must contain:
o a brief description of the business to be brought before the Annual
Meeting, including the complete text of any related resolutions to be
presented and the reasons for conducting such business at the meeting;
o the name and address of record of the shareholder proposing such business;
o the class and number of shares of stock that are beneficially owned by the
shareholder; and
o any material interest of the shareholder in such business.
If you do not provide the proper notice by January 27, 2003, the Chairman of the
meeting may exclude the matter, and it will not be acted upon at the meeting. If
the Chairman does not exclude the matter, the proxies may vote in the manner
they believe is appropriate, as the SEC's rules allow.
For a shareholder proposal to be considered for possible inclusion in the 2003
Proxy Statement, the Corporate Secretary of Dominion must receive it no later
than November 20, 2002. Dominion plans to hold its 2003 Annual Meeting on April
25, 2003.
20
2001 Form 10-K
You may request, without charge, a copy of Dominion's Annual Report filed with
the SEC for 2001 on Form 10-K, excluding exhibits, by:
1. writing to the
Corporate Secretary
Dominion Resources, Inc.
P.O. Box 26532
Richmond, Virginia 23261;
2. sending us an e-mail at
dominion_resources@dom.com; or
3. calling us at
804-819-2000.
Or
You may view our Form 10-K
on our website at www.dom.com
(Keyword search: SEC filings)
VOTE YOUR PROXY
[GRAPHIC]
By Internet
[GRAPHIC]
By Telephone
[GRAPHIC]
By Mail
Dominion Resources, Inc.
P.O. Box 26532
Richmond, Virginia 23261-6532
www.dom.com
THE 2002 PROXY CARD
This proxy is solicited on behalf of the Board of Directors.
Your Control Number Is:
IMPORTANT: PLEASE SEE REVERSE SIDE FOR INFORMATION ABOUT YOUR VOTING CHOICES.
VOTE BY PROXY
Via Internet
Access the Website at: http://www.votefast.com
Via Telephone
Call toll-free:
1-800-542-1160 using a touch-tone phone
Via Mail
Return your proxy in the postage-paid envelope provided.
This proxy when properly executed will be voted as directed on the reverse side
by the signed shareholder. If no direction is made, this proxy will be voted
"FOR" Item 1 and "AGAINST" all proposals in Item 2.
Please sign exactly as your name appears on this proxy. When shares are
held by joint tenants, both shareholders should sign.
When signing in a representative capacity, please give your representative
title. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
In their discretion, the proxies are authorized to vote on any matters that
properly come before the meeting. The undersigned appoints Kenneth A. Randall,
Frank S. Royal, M.D., and Patricia A. Wilkerson, or any one of them, with the
power of substitution, proxies to vote all shares of the undersigned at the
Annual Meeting of Shareholders on April 26, 2002, and at any and all
adjournments thereof.
, 2002
--------------------------------------------------------
Signature Date
, 2002
--------------------------------------------------------
Signature (if held jointly) Date
Dominion Resources, Inc. P.O. Box 26532
Richmond, Virginia 23261
To Our Shareholders:
Dominion Resources, Inc. is pleased to offer you three ways to vote by proxy.
When voting by internet or telephone, you will be prompted to enter your
control number. Simple prompts will be presented to you to record your vote.
Internet and telephone votes must be received by 11:59 p.m. EDT on Thursday,
April 25, 2002 to be counted in the final tabulation.
If you vote by internet or telephone, do not return your proxy card by
mail.
If you choose to vote by mail, please mark, date and sign your proxy card.
Please use the postage-paid envelope to return your proxy.
THE 2002 PROXY CARD
This proxy is solicited on behalf of the Board of Directors.
The Board of Directors recommends a vote "FOR" Item 1.
Item 1 - Election of Directors
[ ] FOR the following nominees:
---
01. William S. Barrack, Jr. 08. Margaret A. McKenna
02. Ronald J. Calise 09. Steven A. Minter
03. Thos. E. Capps 10. Kenneth A. Randall
04. George A. Davidson, Jr. 11. Frank S. Royal
05. John W. Harris 12. S. Dallas Simmons
06. Benjamin J. Lambert, III 13. Robert H. Spilman
07. Richard L. Leatherwood 14. David A. Wollard
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
-------- ---------
To withhold authority to vote for any individual nominee(s), write that
nominee's number in the following space:
The Board of Directors recommends a vote "AGAINST" all proposals in Item 2.
Item 2 - Shareholder Proposals
Proposal No. 1 - Relating to renewable energy sources
[ ] Against [ ] For [ ] Abstain
Proposal No. 2 - Relating to poison pills
[ ] Against [ ] For [ ] Abstain
[ ] To access future proxy materials and annual reports via internet only,
please check this block.
[ ] If you plan to attend the Annual Meeting of Shareholders on April 26, 2002,
please check this box.
--------------------------------------------------------------------------------
IF YOU ARE VOTING BY MAIL, please sign and
date your proxy card on the reverse side
and fold and detach card at perforation
before mailing in the enclosed envelope.
--------------------------------------------------------------------------------
ATTENDING THE MEETING
Shareholders who plan to attend the meeting this year will be asked to present
valid picture identification, such as a driver's license or passport. Registered
shareholders must bring a Dominion Direct statement or dividend check stub as
proof of ownership. If you hold stock in a brokerage account ("street name"),
you must bring a copy of a brokerage statement. If you are an authorized proxy,
you must present the proper documentation. Registration will begin at 8:00 a.m.,
and seating will be available on a first come, first served basis. Cameras,
recording devices and other electronic devices will not be permitted at the
meeting.
DIRECTIONS AND PARKING
To obtain directions to the meeting, or for information about parking please
call Shareholder Services at 1-800-552-4034.
THE 2002 PROXY INSTRUCTIONS
Your Control Number Is:
IMPORTANT: PLEASE SEE REVERSE SIDE FOR INFORMATION ABOUT YOUR VOTING CHOICES.
VOTE BY PROXY
Via Internet
Access the Website at: http://www.votefast.com
Via Telephone
Call toll-free:
1-800-542-1160 using a touch-tone phone
Via Mail
Return your proxy in the postage-paid envelope provided.
Voting instructions are solicited for the Annual Meeting of Shareholders, April
26, 2002 by Trustees for the various retirement plans sponsored by Dominion
Resources, Inc.
I acknowledge receipt of the Notice of Annual Meeting, Proxy Statement and
Annual Report for the Annual Meeting of Shareholders of Dominion Resources, Inc.
I hereby instruct the Trustee to vote the shares of Dominion Common Stock
relating to my Plan account at such Annual Meeting in the manner set forth on
the reverse side.
This voting instruction card, when properly executed, will be voted as directed.
If such card is returned executed with no direction given or is not returned at
all, the Trustee will vote the shares according to each Plan's voting standards.
All voting instructions will be kept confidential.
, 2002
-------------------------------------------------------
Signature Date
Dominion Resources, Inc. P.O. Box 26532
Richmond, Virginia 23261
To Our Shareholders:
Dominion Resources, Inc. is pleased to offer you three ways to vote by proxy.
When voting by internet or telephone, you will be prompted to enter your
control number. Simple prompts will be presented to you to record your vote.
Internet and telephone votes must be received by 11:59 p.m. EDT on Tuesday,
April 23, 2002 to be counted in the final tabulation.
If you vote by internet or telephone, do not return your instruction by
mail.
If you choose to vote by mail, please mark, date and sign your proxy
instruction. Please use the postage-paid envelope to return your proxy.
2002 PROXY INSTRUCTIONS
The Board of Directors recommends a vote "FOR" Item 1.
Item 1 - Election of Directors
FOR the following nominees:
----
01. William S. Barrack, Jr. 08. Margaret A. McKenna
02. Ronald J. Calise 09. Steven A. Minter
03. Thos. E. Capps 10. Kenneth A. Randall
04. George A. Davidson, Jr. 11. Frank S. Royal
05. John W. Harris 12. S. Dallas Simmons
06. Benjamin J. Lambert, III 13. Robert H. Spilman
07. Richard L. Leatherwood 14. David A. Wollard
WITHHOLD AUTHORITY to vote for all nominees listed above.
-------- ---------
To withhold authority to vote for any individual nominee(s), write that
nominee's number in the following space:
========================================
The Board of Directors recommends a vote "AGAINST" all proposals in Item 2.
Item 2 - Shareholder Proposals
Proposal No. 1 - Relating to renewable energy sources
[ ] Against [ ] For [ ] Abstain
Proposal No. 2 - Relating to poison pills
[ ] Against [ ] For [ ] Abstain
[ ] To access future proxy materials and annual reports via internet
only, please check this block.
[ ] If you plan to attend the Annual Meeting of Shareholders on April 26, 2002,
please check this box.
--------------------------------------------------------------------------------
IF YOU ARE VOTING BY MAIL, please sign and date
your instruction card on the reverse side and
fold and detach card at perforation before
mailing in the enclosed envelope.
--------------------------------------------------------------------------------
The 2002 PROXY CARD
Dominion Resources, Inc.
P.O. Box 26532
Richmond, Virginia 23261
This proxy is solicited on behalf of the Board of Directors. The Board of
Directors recommends a vote "FOR" Item 1 and "AGAINST" all proposals in Item 2.
This proxy when properly executed will be voted as directed by the signed
shareholder. If no direction is made, this proxy will be voted "FOR" Item 1 and
"AGAINST" all proposals in Item 2.
Please sign your name on the reverse side of this proxy exactly as it appears at
left. When shares are held by joint tenants, both shareholders should sign.
When signing in a representative capacity, please give your representative
title. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE SEE THE REVERSE SIDE OF THIS CARD FOR IMPORTANT VOTING INFORMATION.
Please mark, sign and mail in the enclosed envelope.
The 2002 PROXY CARD
Dominion Resources, Inc.
P.O. Box 26532
Richmond, Virginia 23261
The Board of Directors recommends a vote "FOR" Item 1.
Item 1 - Election of Directors
[ ] FOR the following nominees:
---
01. William S. Barrack, Jr. 08. Margaret A. McKenna
02. Ronald J. Calise 09. Steven A. Minter
03. Thos. E. Capps 10. Kenneth A. Randall
04. George A. Davidson, Jr. 11. Frank S. Royal
05. John W. Harris 12. S. Dallas Simmons
06. Benjamin J. Lambert, III 13. Robert H. Spilman
07. Richard L. Leatherwood 14. David A. Wollard
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
-------- ---------
To withhold authority to vote for any individual nominee(s), write that
nominee's number in the following space:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Board of Directors recommends a vote "AGAINST" all proposals in Item 2.
Item 2 - Shareholder Proposals
Proposal No. 1 - Relating to renewable energy sources
[ ] Against [ ] For [ ] Abstain
Proposal No. 2 - Relating to poison pills
[ ] Against [ ] For [ ] Abstain
In their discretion, the proxies are authorized to vote on any matters that
properly come before the meeting. The undersigned appoints Kenneth A. Randall,
Frank S. Royal, M.D., and Patricia A. Wilkerson, or any one of them, with the
power of substitution, proxies to vote all shares of the undersigned at the
Annual Meeting of Shareholders on April 26, 2002, and at any and all
adjournments thereof.
, 2002
-----------------------------------------------------------------------------
Signature Date
, 2002
-----------------------------------------------------------------------------
Signature (if held jointly) Date