Summary
Dominion Resources, Inc. (Dominion) filed an 8-K on December 23, 2004, detailing significant changes to its employee and director benefit plans. These amendments and adoptions are primarily to ensure compliance with the new deferred compensation requirements outlined in Section 885 of the American Jobs Creation Act of 2004 and Section 409A of the Internal Revenue Code. Key actions include freezing participation and benefits in certain existing director and executive plans as of December 31, 2004, and establishing new plans to govern compensation and benefits for 2005 onwards, adhering to the new regulatory framework. In addition to benefit plan adjustments, the filing also reports on the 2005 compensation program for executive officers. While long-term equity grants were not approved for 2005, base salaries for the named executive officers were increased. These adjustments, based on an independent compensation consultant's report, reflect comparisons to peer companies and the competitive labor market, with specific salary increases detailed for the CEO and other key executives.
Key Highlights
- 1Dominion Resources is amending and adopting new employee and director benefit plans to comply with the American Jobs Creation Act of 2004 and IRS Section 409A.
- 2Participation and benefits in several existing Director Plans (Stock Accumulation, Director Stock Compensation, Directors’ Deferred Cash Compensation) will freeze after December 31, 2004.
- 3A new Non-Employee Directors’ Compensation Plan is being adopted, effective January 1, 2005, to allow for deferred compensation for non-employee directors under the new regulations, subject to shareholder approval.
- 4Existing Executive Plans (Supplemental Retirement, Retirement Benefit Restoration, Deferred Compensation) are being amended and restated, freezing participation and benefits after December 31, 2004.
- 5New Executive Plans are being established, effective January 1, 2005, to comply with Section 409A for compensation and benefits earned after the freeze date.
- 6The 2005 compensation program for executive officers includes base salary increases for named executive officers, with specific adjustments for the CEO and other senior roles, based on market analysis.
- 7No long-term equity grants were approved for executive officers for 2005, a notable departure from potential prior practices.