EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made as of September 12,
1997 between DOMINION RESOURCES, INC. (the "Company") and XXXXX X. XXXXX, XX.
(the "Executive").
RECITALS:
The Board of Directors of Dominion Resources, Inc. (the "Board of
Directors") recognizes that outstanding management of the Company is essential
to advancing the best interests of the Company, its shareholders and its
subsidiaries. The Board of Directors believes that it is particularly important
to have stable, excellent management at the present time. The Board of Directors
believes that this objective may be achieved by giving key management employees
assurances of financial security for a period of time, so that they will not be
distracted by personal risks and will continue to devote their full time and
best efforts to the performance of their duties.
The Organization and Compensation Committee of the Board of Directors (the
"Committee") has recommended, and the Board of Directors has approved, entering
into employment agreements with the Company's key management executives in order
to achieve the foregoing objectives. The Executive is a key management executive
of the Company and is a valuable member of the Company's management team. The
Company acknowledges that the Executive's contributions to the growth and
success of the Company will be substantial. The Company and the Executive are
entering into this Agreement to induce the Executive to serve as an employee of
the Company and to devote his full energy to the Company's affairs. The
Executive has agreed to be employed by the Company under the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual
undertakings contained in this Agreement, the parties agree as follows:
1. Employment. The Company will employ the Executive, and the Executive
will be employed by the Company, as an executive of the Company, for the period
beginning September 12, 1997 (the "Effective Date") and ending on the third
anniversary of such date, subject to the further provisions of this Section 1
(the "Term of this Agreement"). If Xxxx. X. Xxxxx ceases to be the Chief
Executive Officer of the Company before the third anniversary of the Effective
Date, the Term of this Agreement shall be extended for a period of three years
from the date Xxxx. X. Xxxxx ceases to be the Chief Executive Officer of the
Company.
2. Duties. The Company and the Executive agree that, during the Term of
this Agreement, the Executive will serve in a senior management position with
the Company. The Executive (i) will devote his knowledge, skill and best efforts
on a full-time basis to performing his duties and obligations to the Company
(with the exception of absences on account of illness or vacation in accordance
with the Company's policies and civic and charitable commitments not involving a
conflict with the Company's business), and (ii) will comply with the directions
and
2
orders of the Board of Directors and Chief Executive Officer of the Company with
respect to the performance of his duties.
3. Effect on Other Agreements.
(a) The Board of Directors recognizes that the Executive has entered or may
enter into an Employment Continuity Agreement with the Company, which provides
benefits under certain circumstances in the event of a change in control of the
Company. Notwithstanding anything in this Agreement to the contrary, if the
Executive's employment terminates for any reason after a change in control and
payments are to be made to the Executive under the Executive's Employment
Continuity Agreement: (i) the Executive will not receive payments under this
Agreement as a result of his termination of employment for any reason, (ii)
after payment of any amounts otherwise due the Executive under this Agreement,
this Agreement will terminate without liability on the part of the Company, and
(iii) if and to the extent that any payments made under this Agreement are
considered "parachute payments" for purposes of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), the payments will be taken into
account in determining the amount to be paid to the Executive under the
Employment Continuity Agreement, according to the terms of the Employment
Continuity Agreement. If a change of control occurs and the Executive is not
entitled to receive payments under the Executive's Employment Continuity
Agreement, this Agreement will continue in effect according to its terms. The
agreement between the Executive and Virginia Electric and
3
Power Company dated September 15, 1995 (as supplemented and interpreted) which
is attached as Exhibit A to this Agreement shall not be treated as an Employment
Continuity Agreement for purposes of this Agreement.
(b) Except as provided above and in Section 5 (c), this Agreement sets
forth the entire understanding of the parties with respect to the Executive's
employment with the Company. The Executive and the Company agree that, effective
as of the execution of this Agreement, any prior employment agreements between
the Executive and the Company (other than the Executive's Employment Continuity
Agreement) are null and void. The term "employment agreement" as used in the
preceding sentence does not include any retirement, incentive or benefit plan or
program in which the Executive participates or any credited service agreement
under which the Executive receives years of service credit for retirement plan
purposes.
4. Affiliates. Employment by an Affiliate of the Company or a successor to
the Company will be considered employment by the Company for purposes of this
Agreement, and termination of employment with the Company means termination of
employment with the Company and all its Affiliates and successors. The term
"Company" as used in this Agreement will be deemed to include Affiliates and
successors. For purposes of this Agreement, the term "Affiliate" means the
subsidiaries of Dominion Resources, Inc. and other entities under common control
with Dominion Resources, Inc.
4
5. Compensation and Benefits.
(a) During the Term of this Agreement, while the Executive is employed by
the Company, the Company will pay to the Executive the following salary and
incentive awards for services rendered to the Company:
(i) The Company will pay to the Executive an annual salary in an
amount not less than the base salary in effect for the Executive as of the
date on which this Agreement is executed. The Board of Directors will
evaluate the Executive's performance at least annually and will consider
annual increases in the Executive's salary based on the Executive's
performance.
(ii) The Executive will be entitled to receive incentive awards if and
to the extent that the Board of Directors determines that the Executive's
performance merits payment of an award. The Board of Directors will make
its determination consistent with the methodology used by the Company for
compensating its senior management employees.
If the Executive is employed by an Affiliate or a successor (as described in
Section 4), the term "Board of Directors" as used in this Section 5(a) and in
Section 6(a) (iii) means the Board of Directors of the Executive's employer.
(b) During the Term of this Agreement, while the Executive is employed by
the Company, the Executive will be
5
eligible to participate in a similar manner as other senior executives of the
Company in retirement plans, cash and stock incentive plans, fringe benefit
plans and other employee benefit plans and programs provided by the Company for
its senior management employees from time to time.
(c) The provisions of an agreement between the Executive and Virginia
Electric Power Company dated September 15, 1995 (as supplemented and
interpreted) which is attached as Exhibit A to this Agreement are incorporated
by reference and any benefits accruing or amounts payable to the Executive under
that agreement shall be deemed to be benefits or amounts payable under this
Agreement. The provisions of this subsection (c) shall survive the termination
of this Agreement.
6. Termination of Employment.
(a) If the Company terminates the Executive's employment, other than for
Cause (as defined in Section 8 below), during the Term of this Agreement, the
Company will pay the Executive a lump sum payment equal to the present value of
the Executive's annual base salary and annual cash incentive awards (computed as
described below) for the balance of the Term of this Agreement. The lump sum
payment will be computed as follows:
(i) For purposes of this calculation, the Executive's annual base
salary for the balance of the Term of the Agreement will be calculated at
the highest annual base salary rate in effect for the Executive during the
three-year period preceding his termination
6
of employment. For purposes of this calculation, the Executive's annual
cash incentive awards for the balance of the Term of the Agreement will be
calculated at a rate equal to the highest annual cash incentive award paid
to the Executive during the three-year period preceding his termination of
employment. Salary and bonus that the Executive elected to defer will be
taken into account for purposes of this Agreement without regard to the
deferral.
(ii) The salary and incentive award for any partial year in the Term
of this Agreement will be a pro-rated portion of the annual amount.
(iii) If the Executive has not yet received an annual cash incentive
award for the year in which his employment terminates, the lump sum payment
will be increased to include a pro-rated award for the portion of the year
preceding the Executive's termination of employment. If the Executive has
not yet received payment of his annual cash incentive award for the year
preceding his termination of employment, the lump sum payment will be
increased to include an award for the year preceding the Executive's
termination of employment. The incentive award for the year or portion of
the year preceding the Executive's termination of employment will be
determined according to clause (i) above, unless the Board of Directors
made
7
a good faith final determination of the amount of the applicable incentive
award pursuant to Section 5(a) (ii) before the Executive's termination of
employment. If the Board of Directors made such a determination, the
applicable incentive award will be computed according to the Board of
Directors' determination.
(iv) Present value will be computed by the Company as of the date of
the Executive's termination of employment, based on a discount rate equal
to the applicable Federal short-term rate, as determined under Section
1274(d) of the Code, compounded monthly, in effect on the date as of which
the present value is determined.
(v) The lump sum payment will be paid within 30 days after the
Executive's termination of employment.
(b) If the Company terminates the Executive's employment, other than for
Cause, during the Term of this Agreement, the Executive will be entitled to
receive the following additional benefits determined as of the date of his
termination of employment:
(i) Any outstanding restricted stock that would become vested (that
is, transferable and nonforfeitable) if the Executive remained an employee
through the Term of this Agreement will become vested as of the date of the
Executive's termination of employment (or as of the date described in the
next
8
sentence, if applicable). In addition, if the Company has agreed to award
the Executive restricted stock at the end of a performance period, subject
to the Company's achievement of performance goals, and the date as of which
the restricted stock is to become vested falls within the Term of this
Agreement, the stock will be awarded and become vested at the end of the
performance period if and to the extent that the performance goals are met.
The Executive must satisfy the tax withholding requirements described in
Section 10 with respect to the restricted stock.
(ii) The Executive will be credited with age and service credit
through the end of the Term of this Agreement for purposes of computing
benefits under the Company's pension, medical and other benefit plans, and
the Company will continue the Executive's coverage under the Company's
welfare benefit plans as if the Executive remained employed through the end
of the Term of this Agreement. Service credited to the Executive for
purposes of the Company's pension plans pursuant to this subsection (ii)
shall be in addition to any service credited to the Executive pursuant to
Section 5 (c). Notwithstanding the foregoing, if the Company determines
that giving such age and service credit or continued coverage could
adversely affect the tax qualification or tax treatment of a benefit plan,
or
9
otherwise have adverse legal ramifications, the Company may pay the
Executive a lump sum cash amount that reasonably approximates the after-tax
value to the Executive of such age and service credit and continued
coverage through the end of the Term of this Agreement, in lieu of giving
such credit and continued coverage.
(c) If the Executive voluntarily terminates employment with the Company
during the Term of this Agreement under circumstances described in this
subsection (c), the Executive will be entitled to receive the benefits described
in subsections (a) and (b) above as if the Company had terminated the
Executive's employment other than for Cause. Subject to the provisions of this
subsection (c), these benefits will be provided if the Executive voluntarily
terminates employment after (i) the Company reduces the Executive's base salary,
(ii) the Executive is not in good faith considered for incentive awards as
described in Section 5 (a) (ii), (iii) the Company fails to provide benefits as
required by Section 5(b) and 5(c), or (iv) the Company demotes the Executive to
a position that is not a senior management position (other than on account of
the Executive's disability, as defined in Section 7 below). For this purpose, a
"senior management position" means the position of President of a subsidiary of
the Company, or a position that reports directly to the Chief Executive Officer,
Chief Operating Officer or Senior Vice President of the Company or to the
President of a subsidiary of the Company. In order for this subsection (c) to be
10
effective: (1) the Executive must give written notice to the Company indicating
that the Executive intends to terminate employment under this subsection (c),
(2) the Executive's voluntary termination under this subsection must occur
within 60 days after the Executive knows or reasonably should know of an event
described in clause (i), (ii), (iii) or (iv) above, or within 60 days after the
last in a series of such events, and (3) the Company must have failed to remedy
the event described in clause (i) (ii) (iii) or (iv), as the case may be, within
30 days after receiving the Executive's written notice. If the Company remedies
the event described in clause (i), (ii), (iii) or (iv), as the case may be,
within 30 days after receiving the Executive's written notice, the Executive may
not terminate employment under this subsection (c) on account of the event
specified in the Executive's notice.
(d) The amounts under this Agreement will be paid in lieu of severance
benefits under any severance plan or program maintained by the Company (subject
to Section 3 above). The amounts payable under this Agreement will not be
reduced by any amounts earned by the Executive from a subsequent employer or
otherwise. If the Executive's employment is terminated by the Company for Cause
or if the Executive voluntarily terminates employment for a reason not described
in subsection (c) above or Section 7 below, this Agreement will immediately
terminate without liability on the part of the Company.
11
7. Disability or Death. If the Executive becomes disabled (as defined
below) during the Term of this Agreement while he is employed by the Company and
after Xxxx. X. Xxxxx ceases to be the Chief Executive Officer of the Company,
the Executive shall be entitled to receive the benefits described in Section
6(b)(i) Of this Agreement as of the date on which he is determined by the
Company to be disabled. If during the Term of this Agreement and while he is
employed by the Company the Executive qualifies to receive benefits under the
Company's short-term disability policy, the Executive will be treated as having
eleven or more years of service with the Company for purposes of determining the
amount of his benefits under that policy. If the Executive dies during the Term
of this Agreement while he is employed by the Company, the benefits described in
Section 6(b)(i) will be provided to the personal representative of the
Executive's estate. The foregoing benefits will be provided in addition to any
death, disability and other benefits provided under Company benefit plans in
which the Executive participates. Upon the Executive's death or disability, the
provisions of Sections 1, 2, 5, and 6 of this Agreement will terminate. The term
"disability" means a condition, resulting from bodily injury or disease, that
renders, and for a six consecutive month period has rendered, the Executive
unable to perform substantially the duties pertaining to his employment with the
Company. A return to work of less than 14 consecutive days will not be
considered an interruption in the Executive's six consecutive months of
disability.
12
Disability will be determined by the Company on the basis of medical evidence
satisfactory to the Company.
8. Cause. For purposes of this Agreement, the term "Cause" means (i) fraud
or material misappropriation with respect to the business or assets of the
Company, (ii) persistent refusal or wilful failure of the Executive to perform
substantially his duties and responsibilities to the Company, which continues
after the Executive receives notice of such refusal or failure, (iii) conviction
of a felony or crime involving moral turpitude, or (iv) the use of drugs or
alcohol that interferes materially with the Executive's performance of his
duties.
9. Indemnification. The Company will pay all reasonable fees and expenses,
if any, (including, without limitation, legal fees and expenses) that are
incurred by the Executive to enforce this Agreement and that result from a
breach of this Agreement by the Company.
10. Payment of Compensation and Taxes. All amounts payable under this
Agreement (other than restricted stock, which will be paid according to the
terms of the Company's Long-Term Incentive Plan) will be paid in cash, subject
to required income and payroll tax withholdings. No unrestricted stock will be
issued to the Executive with respect to the vesting of restricted stock until
the Executive has paid to the Company the amount that must be withheld for
applicable income and employment taxes or the Executive has made provisions
satisfactory to the Company for the payment of such taxes.
13
11. Administration. The Committee will be responsible for the
administration and interpretation of this Agreement on behalf of the Company. If
for any reason a benefit under this Agreement is not paid when due, the
Executive may file a written claim with the Committee. If the claim is denied or
no response is received within 90 days after the filing (in which case the claim
is deemed to be denied), the Executive may appeal the denial to the Board of
Directors within 60 days of the denial. The Executive may request that the Board
of Directors review the denial, the Executive may review pertinent documents,
and the Executive may submit issues and comments in writing. A decision on
appeal will be made within 60 days after the appeal is made, unless special
circumstances require that the Board of Directors extend the period for another
60 days. If the Company defaults in an obligation under this Agreement, the
Executive makes a written claim pursuant to the claims procedure described
above, and the Company fails to remedy the default within the claims procedure
period, then all amounts payable to the Executive under this Agreement will
become immediately due and owing.
12. Assignment. The rights and obligations of the Company under this
Agreement will inure to the benefit of and will be binding upon the successors
and assigns of the Company. If the Company is consolidated or merged with or
into another corporation, or if another entity purchases all or substantially
all of the Company's assets, the surviving or acquiring corporation will succeed
to the Company's rights and obligations
14
under this Agreement. The Executive's rights under this Agreement may not be
assigned or transferred in whole or in part, except that the personal
representative of the Executive's estate will receive any amounts payable under
this Agreement after the death of the Executive.
13. Rights Under the Agreement. The right to receive benefits under the
Agreement will not give the Executive any proprietary interest in the Company or
any of its assets. Benefits under the Agreement will be payable from the general
assets of the Company, and there will be no required funding of amounts that may
become payable under the Agreement. The Executive will for all purposes be a
general creditor of the Company. The interest of the Executive under the
Agreement cannot be assigned, anticipated, sold, encumbered or pledged and will
not be subject to the claims of the Executive's creditors.
14. Notice. For purposes of this Agreement, notices and all other
communications must be in writing and are effective when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid,
addressed to the Executive or his personal representative at his last known
address. All notices to the Company must be directed to the attention of the
Chairman of the Committee. Such other addresses may be used as either party may
have furnished to the other in writing. Notices of change of address are
effective only upon receipt.
15. Miscellaneous. This instrument contains the entire agreement of the
parties. To the extent not governed by federal
15
law, this Agreement will be construed in accordance with the laws of the
Commonwealth of Virginia, without reference to its conflict of laws rules. No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and the writing is
signed by the Executive and the Company. A waiver of any breach of or compliance
with any provision or condition of this Agreement is not a waiver of similar or
dissimilar provisions or conditions. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect. This Agreement may be executed in one or more counterparts, all of which
will be considered one and the same agreement.
WITNESS the following signatures.
DOMINION RESOURCES, INC.
By: /s/ Xxxx. X. Xxxxx
---------------------------
Xxxx. X. Xxxxx,
Chief Executive Officer
Dated:___________________
/s/ Xxxxx X. Xxxxx, Xx.
--------------------------
Xxxxx X. Xxxxx, Xx.
Dated: Sept. 12, 1997
16
September 15, 1995
Xx. Xxxxx X. Xxxxx, Xx.
Vice President - Regulation and General Counsel
[LOGO]
VIRGINIA POWER
Dear Ed,
In order to preserve the stability and continuity of the senior management
personnel of the Company, the Special Committee of the Board of Directors of
Virginia Electric and Power Company, in June 1994, approved a resolution
intended to promote your continuing employment relationship with the Company.
This was formalized through my letter of June 23, 1994 to you.
Since that time, a variety of events have happened. The Company believes it is
appropriate to modify the terms of the June 23, 1994 letter to provide
additional assurance of financial security so that you will not be distracted by
personal risks and will devote your best efforts to contribute to the future
growth and success of the Company. Upon my recommendation, the Organization and
Compensation Committee of the Board of Directors and the Board of Directors of
Virginia Electric and Power Company have approved the provisions of this present
letter. Upon your agreement, the terms of this letter will completely replace
the terms of the June 23, 1994 agreement which will lapse.
Section 1 provides you with the salary, short-term incentive and long-term
incentive protection which was provided in the June 23, 1994 agreement.
1. If at any time prior to June 21, 1997, your employment as an officer of the
Company should be terminated for any reason other than cause (i.e. in the
absence of a good faith determination by the President of Company or the Board
of Directors that such cause exists), then the Company will pay to you the
amount (as detailed in a, b and c below) that you would have otherwise received,
as if you had remained employed until that date. You will also be considered to
have been terminated without cause if your base salary is reduced, or if you are
not considered for incentive awards comparable to similar executives, or if you
are not provided benefits similar to those of similar executives, or if the
company diminishes your executive status, working conditions or management
responsibilities, or if the company relocates your place of employment more than
30 miles from Richmond, Virginia, and you resign within 60 days of the Company's
action. "Termination without cause" does not include voluntary retirement or
voluntary resignation.
If you are terminated for any reason other than for cause, prior to June
21, 1997, the company will pay you the following:
a. The base salary which you would have earned from the date of termination
until June 21, 1997. This number will be computed by dividing the annual base
salary at time of termination by 12 and multiplying by the number of whole or
partial months between the date of termination and June 21, 1997. The base
salary used in this calculation shall not be less than your highest base
2
salary on or after September 1, 1995.
Xxxxx X. Xxxxx, Xx.
b. Potential annual incentive award from date of termination until June 21,
1997. This number will be computed by dividing the Success Sharing target award
in effect for you at time of termination by 12 and multiplying by the number of
whole or partial months between the end of the most recently completed plan year
and June 21, 1997. Payment of this amount shall cancel your rights to any other
Success Sharing payments for the same time period. The target used in this
calculation shall not be less than the highest target award in effect for you on
or after September 1, 1995.
c. Potential long-term incentive award until June 21, 1997. The total
number of hypothetical shares (at 100%) goal accomplishment) of Dominion
Resources, Inc. stock granted in all cycles of the Performance Achievement Plan
which were active on the date of termination will be multiplied by the closing
price of the stock on the day of termination. This amount will be paid to you in
dollars. Payment of this amount will cancel your rights to any additional
payments in cash or stock from these active cycles.
Dual payment limitation: If events occur in such a manner that you are
entitled to the same or similar benefits under this agreement and your March 8,
1994 "Employment Continuity Agreement" with the company, you may choose which
version of the benefit to receive, i.e. the benefit as provided by this
agreement or the benefit as provided by the "Employment Continuity Agreement,"
but will not receive payments for that benefit from both agreements.
2. If you continue as an employee of the Company until June 21, 1997, you shall
be entitled to receive one year's base salary on the date you retire or leave
the Company for any reason after June 21, 1997. This special severance benefit
is in addition to and does not diminish any other rights you may have based on
other agreements or benefit plans. This benefit is reduced to six months' salary
if you choose the benefit provided by 3 following.
3. If you serve as an officer until June 2, 1998, you will be eligible, at
retirement, for 5 additional years of credited age and 5 additional years of
credited service to be added for pension and other retirement benefits, such as
the Executive Supplemental Retirement Plan, the Retirement Benefit Funding Plan,
medical coverage and life insurance. Any minimum age requirement shall be
waived. Choosing this benefit will reduce the benefit in 2 above as noted. You
will also be eligible for this benefit if you are terminated without cause prior
to June 2, 1998.
4. If your termination is due to death or disability, you, your estate or your
beneficiary will receive benefits 1, if death or disability is prior to June 21,
1997, or benefit 2 and/or 3 above, if death or disability is after that date.
3
Section 5 reduces the threshold age for earning additional years of service to
50.
5. As part of the arrangements for your employment with Virginia Power, the
company promised to provide you with 20 years of total credited service (for
retirement benefits) when you reach age 55, and 30 years of total credit service
when you reach age 60. On your 50th birthday (June 2, 1998), you will be
credited with total credited service of 15 years. This will increase on a year
by year basis until your 59th birthday when you will have 24 years of total
credited service. This will become 30 years of credited service on your 60th
birthday. Thirty years is the maximum allowed under our plan. Any additional
credited years of service which might be provided to you under section 3 above
will be added to the years discussed in the current section. Additional credited
years of age provided to you under section 3 above do not count toward your
eligibility for additional credited years of service.
6. The Company will pay all reasonable fees and expenses which you incur to
enforce this Agreement and that result from a breach of the Agreement by the
Company. The Company will also indemnify you for any excise tax you incur if any
portion of the benefits provided by this letter is considered to be an "excess
parachute payment" under the Internal Revenue Code. In either case, the
indemnification will be structured to be tax neutral to you.
Please acknowledge your agreement by signing a copy of this letter and returning
it to me. I will then make this document a part of your permanent file.
If you have any questions, please let me know.
Approved:
/s/ X. X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
---------------------------- ---------------------------
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
President and Chairman
Chief Executive Officer Organization and Compensation
Committee
Attachment
Agreed and Acknowledged:
/s/ Xxxxx X. Xxxxx, Xx.
----------------------------------
Xxxxx X. Xxxxx, Xx.
DAte: September 15, 1995
September 15, 1995
[LOGO]
VIRGINIA POWER
Xx Xxxxx X. Xxxxx, Xx.
Vice President - Regulation and General Counsel
The sentence, "Any minimum age requirement shall be waived." appears in the
section numbered 3 in the September 15, 1995 agreement signed by Xx. Xxxxxx, Xx.
Xxxxxx and you. The purpose of this letter is to assure you that this sentences
refers to all retirement programs which impose a minimum age requirement. This
includes the Executive Supplement Retirement Plan and the Retirement Benefit
Funding Plan.
A copy of this letter has been attached to the September 15, 1995 agreement in
your personnel file.
Please contact me if you have any questions.
Sincerely
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President - Human Resources
cc: Personnel File
November 1, 1995
Xx. X. X. Xxxxx, Xx.
Vice President - Regulation and General Counsel [LOGO]
VIRGINIA POWER
A reference to ""terminated without cause" appears in the section 3 in the
September 15, 1995 agreement signed by Xx. Xxxxxx, Xx. Xxxxxx and you. The
purpose of this letter is to clarify the use of the term "terminated without
cause" in section 3. The conditions which define "without cause" in numbered
section 1 apply to the use of this term in section 3
A copy of this letter has been attached to the September 15, 1995 agreement in
your personnel file.
Please contact me if you have any questions.
Sincerely,
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President - Human Resources
cc: Personnel File
MEMORANDUM
TO: File
FROM: Xxxxxxx X Xxxxxx, Chairman
Virginia Power Organization and Compensation Committee
DATE: June 17, 1997
RE: Virginia Power Organization and Compensation Committee
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxx, President and Chief Executive Officer of Virginia Power
recently raised an issue with me concerning the provisions of the Employment
Agreements currently in place with Xxxxxx X. Xxxxxx, Executive Vice President,
and Xxxxx X. Xxxxx, Xx., Senior Vice President Finance, Regulation and General
Counsel.
The issue raised by Xxx Xxxxxx was whether the Employment Agreements for
Xxxxxx and Xxxxx provided under Section 3 that benefits provided for in the
Agreements would be available to them if they were terminated without cause
prior to their 50th birthdays. I have reviewed the Employment Agreements, and
both contain the following sentence at the end of paragraph 3: "You will also be
eligible for this benefit if you are terminated without cause prior to (their
respective 50th birthdays)."
I've also read the balance of their Employment Agreements and have
concluded that the Agreements do provide that the benefits under Section 3 are
available to them if they are terminated without cause prior to their 50th
birthdays.
In the case of Xxxxx, there is an additional provision found in paragraph 5
of his Employment Agreement concerning a credit for years of service. I've also
concluded that this provision would be applicable and he would receive the
appropriate years of service credit if he were terminated prior to his 50th
birthday without cause.
Having reached these conclusions, I felt that no other action was
necessary. I have informed Xxx Xxxxxx of my conclusion and will see that copies
of this memorandum are placed in both Xxxxxx'x and Xxxxx'x personnel files.
WGT:ss
cc: Xxxxx X. Xxxxxx
President and Chief Executive Officer
Xxxxxx X. X'Xxxx
Vice President, Human Resources
