Exhibit 10(xxvi)
DOMINION RESOURCES, INC.
EMPLOYMENT CONTINUITY AGREEMENT
Amended and Restated as of August 12, 1994
THIS AGREEMENT is between Dominion Resources, Inc., a Virginia
corporation (the "Company"), and __________________ (the "Executive").
The Company and the Executive have entered into an Employment
Continuity Agreement dated June 1, 1988 and now wish to amend and restate
the Executive's Employment Continuity Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual undertakings
contained in this Agreement, the parties agree that the Executive's
Employment Continuity Agreement is hereby amended and restated in its
entirety to read as follows:
The Company's Board of Directors (the "Board") acknowledges that
the Executive's contributions to the past and future growth and success of
the Company have been and will continue to be substantial. As a publicly
held corporation, the Board recognizes that there exists a possibility of a
change in control of the Company. The Board also recognizes that the
possibility of such a change in control may contribute to uncertainty on
the part of senior management and may result in the departure or
distraction of senior management from operating responsibilities.
Outstanding management of the Company is always essential to
advancing the best interests of the Company and its shareholders. In the
event of a threat or occurrence of a bid to acquire or change control of
the Company or to effect a business combination, it is particularly
important that the Company's business be continued with a minimum of
disruption. The Board believes that the objective of securing and
retaining outstanding management will be achieved if the Company's key
management employees are given assurances of employment security so they
will not be distracted by personal uncertainties and risks created by such
circumstances.
The Board believes that such assurances will secure the continued
services of the Company's key operational and management executives in the
performance of both their regular duties and such extra duties as may be
required of them during such periods of uncertainty, enable the Company to
rely on such executives to manage its affairs during any such period with
less concern for their personal risks, and enhance the Company's ability to
attract new key executives as needed.
The Organization and Compensation Committee (the "Committee") of
the Board has recommended, and the Board has approved, entering into
employment agreements with the Company's key management executives in order
to achieve the foregoing objectives; and the Executive is a key management
executive of the Company.
The Company and the Executive enter into this Agreement to induce
the Executive to remain an employee of the Company and to continue to
devote his full energy to the Company's affairs.
1. Employment.
(a) The Company and the Executive hereby agree that the
Executive's employment will continue after this Agreement is effective on
the same terms and conditions of employment as are in effect on the date of
the Agreement.
(b) The Company further agrees that if the Executive is in
the employ of the Company on a Control Change Date, the Company will
continue to employ the Executive, and the Executive will remain in the
employ of the Company, for the period commencing on the Control Change Date
and ending on the third anniversary of such date (the "Employment Period"),
and the Executive will continue to exercise such authority and perform such
executive duties as are commensurate with the authority being exercised and
duties being performed by the Executive immediately before the Control
Change Date. The Executive's services will be performed at the location
where the Executive was employed immediately before the Control Change
Date. If the Company consents, however, the Executive may elect to change
the location of his employment without affecting any of his rights under
this Agreement.
(c) For purposes of this Agreement, a Change in Control
occurs if: (i) after the date of the Agreement, any person, including a
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of
1934, becomes the owner or beneficial owner of Company securities having
20% or more of the combined voting power of the then outstanding Company
securities that may be cast for the election of the Company's directors
(other than as a result of an issuance of securities initiated by the
Company, or open market purchases approved by the Board, as long as the
majority of the Board approving the purchases is the majority at the time
the purchases are made); or (ii) as the direct or indirect result of, or in
connection with, a cash tender or exchange offer, a merger or other
business combination, a sale of assets, a contested election, or any
combination of these transactions, the persons who were directors of the
Company before such transactions cease to constitute a majority of the
Company's Board, or any successor's board, within two years of the last of
such transactions. For purposes of this Agreement, the Control Change Date
is the date on which an event described in (i) or (ii) occurs. If a Change
in Control occurs on account of a series of transactions, the Control
Change Date is the date of the last of such transactions.
2. Compensation and Benefits. During the Employment Period,
the Company will (i) continue to pay the Executive a salary not less than
the salary applicable to the Executive on the Control Change Date, (ii) pay
the Executive bonuses in amounts not less in amount than those paid to the
Executive during the twelve-month period preceding the Control Change Date,
and (iii) continue employee benefit programs as to the Executive at levels
in effect on the Control Change Date (but subject to such reductions as may
be required to maintain such plans in compliance with applicable federal
laws regulating employee benefit programs).
3. Termination of Employment.
(a) The Executive is entitled to receive Continued
Compensation (as defined in subsection (d) below) according to the
remaining provisions of this Section if the Executive's employment with the
Company terminates during the Employment Period because of an event
described in Section 3(b) or 3(c), but subject to Section 3(f). If the
Executive's employment terminates during the Employment Period and an event
described in Section 3(b) or 3(c) has not occurred, this Agreement shall
terminate.
(b) The Executive is entitled to receive Continued
Compensation if the Executive's employment is terminated by the Company
without cause during the Employment Period (cause being limited to the
Executive's acts of theft, embezzlement, fraud, or moral turpitude).
(c) The Executive is entitled to receive Continued
Compensation if the Executive voluntarily terminates employment during the
Employment Period after (i) the Executive does not receive salary
increases, bonuses, and incentive awards comparable in the aggregate to the
salary increases, bonuses, and incentive awards that the Executive received
in prior years or, if greater, that other executives in comparable
positions receive in the current year; or (ii) the Executive's compensation
or employment related benefits are reduced; or (iii) the Executive's
status, titles, offices, places of employment, working conditions, or
management responsibilities are diminished (other than changes in reporting
or management responsibilities to reflect sound practices commonly followed
by enterprises comparable to the Company or required by applicable federal
or state law). The Executive's voluntary termination under this Section
must occur within sixty days after an event described in (i), (ii), or
(iii), or within sixty days after the last in a series of such events.
(d) Continued Compensation will be paid in a lump sum
payment. However, if the Executive requests and the Company (in its sole
discretion) consents, the Executive may receive Continued Compensation in
thirty-six equal monthly installments. If Continued Compensation is paid
in monthly installments, the total Continued Compensation payments will
equal three times the Executive's Base Period Income (as defined in
subsection (e) below). If the Continued Compensation is paid in a lump
sum, the Continued Compensation will equal the present value of the total
payments that would be due under the preceding sentence, using the interest
rate prescribed in section 280G(d)(4) of the Internal Revenue Code of 1986,
as amended (the "Code"). Continued Compensation is due and payable to the
Executive on the later of the fifteenth business day after the Executive's
employment termination or the first day of the month following his
employment termination. At the Company's sole discretion, however, a
Continued Compensation payment may be made on an earlier date. Continued
Compensation is subject to reduction according to Section 3(f).
(e) The Executive's Base Period Income equals the greater
of (i) his average annual base salary and cash incentive bonuses for the
thirty-six full month period (or actual period, if shorter) of employment
preceding the Control Change Date, or (ii) his average annual base salary
and cash incentive bonuses for the thirty-six full month period (or actual
period if shorter) of employment preceding the Executive's employment
termination. For purposes of the preceding sentence, cash amounts received
under the Dominion Resources, Inc. Performance Achievement Plan are not
considered cash incentive bonuses. Amounts of salary and bonus that the
Executive has elected to defer during the relevant period are included in
Base Period Income.
(f) If any payments that the Executive has the right to
receive from the Company (including Continued Compensation payments) or any
affiliated entity or any payments or benefits under any plan maintained by
the Company or any affiliated entity would constitute a "parachute payment"
(as defined in Code section 280G and not governed by terms defined in this
Agreement), all such payments (other than payments described in subsection
(g) below or Section 4) shall be reduced to the largest amount that will
result in no portion of any such payments being subject to the excise tax
imposed by Code section 4999. The determination of any reduction pursuant
to this subsection shall be made by the Company in good faith, before any
such payments are due and payable to the Executive. The payments described
in subsection (g) or Section 4 shall not be reduced pursuant to this
subsection (f), but they shall be taken into account (to the extent that
they are considered "parachute payments") in computing the maximum amount
of other payments that may be made without imposition of the excise tax
under Code section 4999.
(g) In addition to any other payments provided under this
Agreement or any other arrangement between the Company and the Executive,
the Executive is entitled to (i) any benefits that become vested under the
accelerated vesting provisions of the Dominion Resources, Inc. Executive
Supplemental Retirement Plan and any benefits due the Executive as a result
of the exercise of a stock option granted or a restricted stock award made
under the Dominion Resources, Inc. Long-Term Incentive Plan, and (ii) any
payments or benefits due the Executive that are not "parachute payments"
(as defined in Code section 280G), including amounts that the Executive is
entitled to receive under the Company's qualified plans and health care
coverage under the Company's welfare plans for which the Executive pays the
cost.
4. Indemnification.
(a) The Company must pay all legal fees and expenses, if
any, incurred by the Executive in seeking to obtain or enforce any right or
benefit provided by this Agreement, whether successful or not.
(b) In addition, if the excise tax imposed under Code
section 4999 on "excess parachute payments," as defined in Code section
280G, is provoked by (i) any amount paid or payable to or for the benefit
of the Executive under this Section as legal fees and expenses, or (ii) any
benefits that become vested under the accelerated vesting provisions of the
Dominion Resources, Inc. Executive Supplemental Retirement Plan and any
benefits due the Executive as a result of the exercise of a stock option
granted or a restricted stock award made under the Dominion Resources, Inc.
Long-Term Incentive Plan, the Company shall indemnify the Executive and
hold him harmless against all claims, losses, damages, penalties, expenses,
excise taxes, and other taxes that result from the imposition of the excise
tax under Code section 4999 (including, without limitation, any income,
payroll and excise taxes imposed on the amount payable to the Executive to
cover his excise tax under Code section 4999).
5. Administration.
(a) The Committee shall 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 within 60 days of the denial. The Executive may
request that the Board 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 extend the
period for another 60 days.
6. Governing Law. This Agreement is construed according to the
laws of the Commonwealth of Virginia.
7. Amendment. This Agreement may not be amended except by the
written agreement of the parties.
8. Binding Effect. The parties agree that this Agreement is
enforceable under the laws of the Commonwealth of Virginia. This Agreement
is binding on the Company, its successors, and assigns and on the Executive
and his personal representatives. 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 shall succeed to the Company's rights and obligations under
this Agreement. This Agreement inures to the benefit of and is enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees.
If the Executive dies while any amounts are payable under this Agreement,
all such amounts, unless otherwise provided, shall be paid in accordance
with the terms of this Agreement to the Executive's spouse, or if none, to
his devisee, legatee, or other designee or, if there be no such designee,
to his estate.
9. 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 representatives at his
last known address. All notices to the Company must be directed to the
attention of the Chairman of the Board. 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.
10. Miscellaneous. No provisions of this Agreement may be
modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing signed by the Executive and the Company.
A waiver of any breach of or compliance with any provisions 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 does not affect the validity or enforceability of any other
provision of this Agreement, which remains 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.
11. No Assignment. The Executive may not assign, alienate,
anticipate, or otherwise encumber any rights, duties, or amounts which he
might be entitled to receive under this Agreement. The right to receive
benefits under this 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 will not be subject to
the claims of the Executive's creditors.
12. Term. This Agreement is effective from the date of its
execution by the Company. The Company may not terminate this Agreement for
thirty-six months after it becomes effective. The Agreement automatically
continues in effect from year to year thereafter unless the Company
notifies the Executive in writing thirty days before the end of the initial
thirty-six month period or any anniversary of its execution that the
Agreement will terminate as of that date.
The parties have executed this Agreement dated this _____ day of
__________, 1994.
DOMINION RESOURCES, INC.
By___________________________
_____________________________
_____________________________