8-KExhibits & Filings

DOMINION ENERGY, INC 8-K Report, Exhibit Filing (Apr 4, 2006)

Filed April 4, 2006For Securities:D

Summary

Dominion Resources, Inc. (now Dominion Energy) filed an 8-K on April 4, 2006, reporting on actions taken by its Organization, Compensation and Nominating (OCN) Committee on March 31, 2006. The primary focus of this filing is the approval of the 2006 Long-Term Compensation Program for officers. This program is designed to incentivize executive performance through a combination of restricted stock grants and cash-based performance grants, both tied to specific performance metrics. The filing also details an amendment to the Employment Continuity Agreements (ECAs) for officers. These amendments address changes in company policy regarding pro-rata vesting upon retirement, death, disability, or termination without cause, and ensure compliance with new IRS regulations for nonqualified deferred compensation. The changes clarify equity grant vesting based on individual grant terms and confirm that grants made before April 2006 will continue to fully vest upon a change in control.

Key Highlights

  • 1Approval of the 2006 Long-Term Compensation Program for officers, effective March 31, 2006.
  • 2The compensation program includes two equal components: a restricted stock grant and a cash-based performance grant.
  • 3Restricted stock grants have a three-year cliff vesting period.
  • 4Performance grants are contingent on achieving Total Shareholder Return (TSR) and Return on Invested Capital (ROIC) metrics.
  • 5Payout for the performance grant is expected by March 2008, with the amount varying based on performance.
  • 6Amendment to Employment Continuity Agreements (ECAs) for officers.
  • 7ECAs updated to reflect changes in pro-rata vesting policies and comply with new IRS nonqualified deferred compensation rules.

Frequently Asked Questions

The 2006 Long-Term Compensation Program was established to incentivize Dominion's officers by linking a significant portion of their compensation to the company's performance through restricted stock and performance-based cash grants, measured by shareholder return and return on invested capital.

The performance grant payout is variable and depends on Dominion achieving specific performance metrics, namely Total Shareholder Return and Return on Invested Capital. Payout is anticipated by March 2008, with the exact amount determined by the degree of achievement of these metrics.

The ECAs were amended to update the company's policy on pro-rata vesting in cases of retirement, death, disability, or termination without cause, and to align with new Internal Revenue Service regulations for nonqualified deferred compensation. Vesting of equity grants will now be governed by the specific terms of each grant.

The amended ECAs clarify that any equity grants made by Dominion prior to April 2006 will continue to fully vest upon a change in control of the company.