8-KLeadership ChangesExhibits & Filings

DOMINION ENERGY, INC 8-K Report, Executive Changes (May 11, 2009)

Filed May 11, 2009For Securities:D

Summary

Dominion Energy, Inc. (D) filed an 8-K on May 11, 2009, primarily detailing the approval and amendments to its 2005 Incentive Compensation Plan (the "Amended Plan"). This plan, officially approved by shareholders on May 5, 2009, extends the plan's term to after the 2016 Annual Meeting and increases the number of reserved shares for incentive awards from 30 million to 36 million. Key changes include the addition of new performance criteria such as book value, environmental considerations, safety, and reliability, aimed at aligning executive compensation with broader company objectives and ensuring compliance with IRS regulations, including Section 409A. Investors should note the types of awards that can be granted under the Amended Plan, including performance grants, restricted stock, goal-based stock, stock options, and stock appreciation rights (SARs). The plan outlines minimum vesting schedules, prohibits repricing of stock options without shareholder approval, and restricts discounted stock options except in specific M&A scenarios. The amendments are intended to provide flexibility in compensation while maintaining shareholder oversight and regulatory compliance. The Amended Plan also clarifies that forfeited shares can be reissued, but shares used for option exercises or tax withholdings are not.

Key Highlights

  • 1Shareholder approval received on May 5, 2009, for the Amended and Restated 2005 Incentive Compensation Plan.
  • 2Plan term extended to after the 2016 Annual Meeting.
  • 3Total reserved shares for incentive awards increased from 30 million to 36 million.
  • 4New performance criteria added, including book value, environmental, safety, and reliability metrics.
  • 5Plan amended for compliance with Section 409A of the Internal Revenue Code.
  • 6Prohibition on repricing stock options without shareholder approval.
  • 7Restriction on discounted stock options, except in merger/acquisition scenarios.

Frequently Asked Questions

The main purpose of the amendments is to extend the plan's duration, increase the number of shares available for incentive awards, incorporate new performance criteria focused on key company objectives (including environmental and safety metrics), and ensure compliance with IRS regulations, particularly Section 409A. This aims to align executive compensation with long-term company performance and shareholder interests.

The increase from 30 million to 36 million shares represents a potential dilution of existing shareholder equity if all shares are issued as awards. However, it also provides the company with greater flexibility to attract and retain talent through incentive-based compensation, which can drive future performance and value creation.

The Amended Plan allows for various awards including performance grants, restricted stock, goal-based stock, stock options, and SARs. Key restrictions include a minimum three-year vesting schedule for non-performance-based restricted stock, a prohibition on repricing stock options without shareholder approval, and restrictions on discounted stock options except in M&A transactions. Shares used for option exercises or tax withholdings will not be added back to the reserve.

The new performance criteria introduced for incentive awards include measures related to book value, environmental considerations, safety, and reliability. These additions aim to broaden the scope of performance metrics beyond traditional financial targets, reflecting a commitment to operational excellence and corporate responsibility.