Dominion Resources, Inc. Performance Grant Agreement
Exhibit
10.2
Dominion
Resources, Inc.
THIS
AGREEMENT, dated April 3, 2007, between DOMINION RESOURCES, INC., a Virginia
Corporation (the "Company") and
("Participant"), is made pursuant and subject to the provisions of the Dominion
Resources, Inc. 2005 Incentive Compensation Plan (the "Plan") to the extent
provided below. If not used herein, all terms used in this Agreement have the
same meaning given them in the Plan. The Performance Grant will be administered
by the Compensation, Governance and Nominating Committee (the “CGN Committee”)
of the Company’s Board of Directors.
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1.
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Performance
Grant.
Pursuant to the Plan, the Participant is granted a Performance Grant
at a
Target Amount of on
April 3, 2007 (“Date of Grant”), subject further to the terms and
conditions set forth herein. The actual payout may be from 0% to
200% of
the Target Amount. Payment will be made by March 15, 2009 or as soon
as
administratively practicable thereafter. The Performance Period for
purposes of this Agreement is the period beginning January 1, 2007
and
ending December 31, 2008.
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2.
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TSR
Performance Conditions
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Total
Shareholder Return Performance (“TSR Performance”) shall determine fifty percent
(50%) of the Target Amount (“TSR Percentage”). TSR Performance is defined in
Exhibit A. The Performance Period for the TSR Performance is the period
beginning January 1, 2007 and ending December 31, 2008. The TSR Percentage
that
will be paid out, if any, is based on the following table.
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Percentage
Payout
of
TSR Percentage
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Relative
TSR Performance
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Top
Quartile - 75 % to 100%
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150%
- 200%
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2nd
Quartile - 50% to 74.9%
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100%
- 149.9%
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3rd
Quartile - 25% to 49.9%
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50%
- 99.9%
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4th
Quartile - below 25%
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0%
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To
the
extent that the Company’s TSR Performance ranks in a percentile within the Top,
2nd or 3rd Quartiles of Relative TSR Performance, then the TSR Percentage
Payout
shall be interpolated between the top and bottom of the Percentage Payout
of TSR
Percentage range for that Quartile.
No
payment will be made if the TSR Performance is in the 4th Quartile, except
that
a payment of 25% of the TSR Percentage shall be made if the Company’s TSR
Performance was at least %
on a
compounded annual basis for the Performance Period.
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3.
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ROIC
Performance Conditions
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Return
on
Invested Capital Performance (“ROIC Performance”) shall determine fifty percent
(50%) of the Target Amount (“ROIC Percentage”). ROIC Performance is defined in
Exhibit A. The Performance Period for the ROIC Performance is the period
beginning January 1, 2007 and ending December 31, 2008. The ROIC Percentage
that
will be paid out, if any, is based on the following table.
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Percentage
Payout
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ROIC
Performance
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of
ROIC Percentage
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%
or greater
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200%
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%
-
%
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150%
- 199.9%
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%
-
%
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100%
- 149.9%
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%
-
%
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50% - 99.9%
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Below %
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0%
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To
the
extent that the Company’s ROIC Performance is between %
and
%,
then
the ROIC Percentage payout shall be interpolated between the top and bottom
of
the applicable Percentage Payout of ROIC Percentage range set forth
above.
The
ROIC
Performance may be adjusted negatively by the CGN Committee based on the
Company’s performance under the final approved ROIC goals for non-executive
officers for their 2007 performance grants. Any adjustments to the ROIC
Performance will be communicated to the Participant when made.
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4.
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Death,
Disability, Retirement and Termination without Cause.
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a.
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Retirement.
If
the Participant Retires and would have been eligible for a payment
under
paragraphs 2 or 3 if the Participant had remained employed until
December
31, 2008, the Participant shall receive the amount determined under
paragraphs 2 and/or 3 as if the Participant had remained employed
times
the fraction of (A) the number of completed months from the Date
of Grant
to the Participant’s Retirement divided by (B) the number of months
between the Date of Grant and December 31, 2008. Payment shall be
made at
the time provided in paragraph 1.
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b.
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Death,
Disability and Termination without Cause.
If during the Performance Period and before a Change of Control,
the
Participant dies, becomes Disabled, or is terminated without Cause
(as
“Cause” is defined in the Participant’s Employment Continuity Agreement),
the Participant shall receive a lump sum cash payment equal to the
product
of (i) and (ii) where
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(i)
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is
the predicted performance used for determining the compensation cost
recognized by the Company for this Performance Grant for the latest
financial statement filed with the Company’s Annual Report on Form 10-K or
Quarterly Report on Form 10-Q immediately prior to the event and
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(ii)
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is
the fraction of (A) the number of complete calendar months from the
Date
of Grant to the date of death, Disability and termination without
Cause
divided by (B) the number of months between the Date of Grant and
December
31, 2008.
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Payment
under this paragraph 4(b) shall be made 30 days after the date of the
Participant’s death or termination of employment due to Disability or
termination without Cause; provided, however, that payment shall be made no
earlier than six months after the Participant’s death or termination if the
payment is subject to Section 409A of the Code and the Participant is a
Specified Employee (within the meaning of Section 409A(a)(2)(B)(i) of the
Code).
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5.
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Change
of Control.
Upon a Change of Control, the Participant shall receive a lump sum
cash
payment, within 15 days of the Change of Control date, equal to the
greater of (A) the Target Amount or (B) the total payout that would
be
made at the end of the Performance Period if the predicted performance
used for determining the compensation cost recognized by the Company
for
this Performance Grant for the latest financial statement filed with
the
Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q
immediately prior to the Change of Control was the actual performance
for
the Performance Period.
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6.
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Terms
and Conditions.
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a.
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Forfeiture.
Except as provided in paragraphs 4 or 5, the Participant's rights
in the
Performance Grant shall be forfeited if the Participant’s employment with
the Company or a Dominion Company terminates before December 31,
2008.
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b.
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Nontransferability.
No
rights in the Performance Grant are transferable.
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c.
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Retirement.
For purposes of this Agreement, the term Retire or Retirement means
termination when the Participant is eligible for early, normal or
delayed
retirement as defined in the Dominion Pension Plan, or would be eligible
if any crediting of deemed additional years of age and/or service
applicable to the Participant under the Company’s Benefit Restoration Plan
or New Benefit Restoration Plan were applied under the Pension Plan,
as in
effect at the time of the determination.
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d.
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No
Right to Continued Employment.
This Performance Grant does not confer upon the Participant any right
with
respect to continuance of employment by the Company or a Dominion
Company,
nor shall it interfere in any way with the right of the Company or
a
Dominion Company to terminate the Participant's employment at any
time.
The CGN Committee reserves the right to reduce the amount paid to
a
Participant below the calculated amount earned under this Performance
Grant or pay no amount at all to the Participant.
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e.
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Tax
Withholding.
The Company will withhold from any payment the aggregate amount of
federal, state and local income and payroll taxes that the Company
is
required to withhold on the
payment.
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f.
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Application
of Code Section 162(m).
It
is intended that payments for TSR Performance under this Performance
Grant
to a Participant who is a “covered employee” constitute “qualified
performance-based compensation” within the meaning of section 1.162-27(e)
of the Income Tax Regulations. The CGN Committee will certify the
TSR
Performance. To the maximum extent possible, this Performance Grant
and
the Plan shall be interpreted and construed consistent with this
paragraph
6(f).
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g.
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Governing
Law.
This Agreement shall be governed by the laws of the Commonwealth
of
Virginia.
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h.
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Conflicts.
In
the event of any conflict between the provisions of the Plan as in
effect
on the date of the award and the provisions of this Agreement, the
provisions of the Plan shall govern. All references herein to the
Plan
shall mean the Plan as in effect on the date of the Performance Grant,
as
it may be amended from time to
time.
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i.
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Participant
Bound by Plan.
The Participant hereby acknowledges receipt of a copy of the Plan
and
agrees to be bound by all the terms and provisions
thereof.
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j.
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Binding
Effect.
Subject to the limitations stated above and in the Plan, this Agreement
shall be binding upon and inure to the benefit of the legatees,
distributees, and personal representatives of the Participant and
the
successors of the Company.
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IN
WITNESS WHEREOF the Company has caused this Agreement to be signed by a duly
authorized officer.
Dominion
Resources,
Inc.
By:
______________________________
Xxxxxx
X. Xxxxxxx,
XX
President
and Chief
Executive Officer
EXHIBIT
A
Total
Shareholder Return (TSR) and Return on Invested Capital (ROIC) are determined
under policies established by the CGN Committee. The calculations of the
performance measures are summarized below.
Total
Shareholder Return
The
TSR
Performance will be measured based on where the Company’s total shareholder
return during the Performance Period ranks in relation to the total shareholder
returns of the Comparison Companies during such period. TSR reflects the change
in stock price during the Performance Period plus any dividends paid.
The
Comparison Companies are:
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American
Electric Power Company, Inc.
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FPL
Group, Inc.
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Constellation
Energy Group, Inc.
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NiSource
Inc.
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Duke
Energy Corporation
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PPL
Corporation
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Entergy
Corporation
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Progress
Energy, Inc.
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Exelon
Corporation
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Public
Service Enterprise Group Incorporated
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FirstEnergy
Corporation
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Southern
Company
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The
list
of Comparison Companies is subject to adjustment in accordance with policies
established by the CGN Committee. Any adjustments to the list of Comparison
Companies will be communicated to the Participant when made.
Return
on Invested Capital
ROIC
reflects the Company’s total return divided by average invested capital for the
Performance Period.
For
this
purpose, total return is the Company’s operating earnings plus its after-tax
interest and related charges plus preferred dividends. In accordance with
policies established by the CGN Committee, the ROIC Performance may be adjusted
negatively by the CGN Committee based on the Company’s performance under the
final approved ROIC goals for non-executive officers for their 2007 performance
grants. Any adjustments to the ROIC Performance will be communicated to the
Participant when made.
