Dominion Executives Exercise Options to
Repay Loans That Can't Be Extended Under
Sarbanes-Oxley Provisions
RICHMOND, Va. - Dominion (NYSE: D) said today that a limited
number of executives have exercised options under a previously announced program
approved by the compensation committee of its board of directors, enabling the
executives to raise the funds needed to prepay personal loans from third-party
commercial lenders coming due in 2005.
Under board directives announced in the company’s first-quarter
earnings news release April 20 and in its 2004 proxy statement, Dominion is
allowing its officers to exercise options and sell shares of stock from now
until the end of 2005. The loans were taken out in early 2000 to assist the
officers’ purchase of Dominion shares under the company’s share
ownership guidelines.
The proceeds from any option exercises or sale of shares must
be used to prepay loans and cover any related costs. In the case of option exercises,
proceeds may also be used to acquire additional shares of Dominion. This will
enable officers to continue to maintain substantial share ownership in accordance
with the intent of the company’s ownership program and guidelines.
Thos. E. Capps, chairman and chief executive officer, who
has exercised options under the program, said:
“I am exercising options for the purpose of loan retirement.
I have not sold – and do not intend to sell – any Dominion shares.
I am Dominion’s largest individual shareholder and expect to maintain
my share ownership position.”
To comply with Sarbanes-Oxley provisions, Dominion will not
extend its guaranty of personal bank loans to executives who borrowed money
under the program. The officers have been personally responsible for repaying
the loans since inception.
The stock options were granted in 1999 under a shareholder-approved
incentive compensation plan to closely and directly link management and shareholder
interests. Direct stock ownership by officers is also part of the program to
link management and shareholder interests financially.
Under Dominion’s ownership guidelines, officers are
required to own from three to eight times their annual base salaries in Dominion
shares. Officers will still be responsible for complying with share ownership
guidelines after using proceeds from any stock and options sales to retire their
loans.
Thomas N. Chewning, chief financial officer, said:
“Our share ownership program closely aligns management’s
interests with shareholder interests, and our program has been an unqualified
success. Shareholders who have held shares during the period that our program
has been in effect have realized total returns greater than the rest of the
sector.
“The different cultures existing at Dominion Resources,
Virginia Power, CNG regulated and CNG oil and gas at the beginning of our merger
in 2000 were melded into one through the significant investment our officers
made in Dominion stock. It was no more ‘them and us’ — just
‘us.’ ”
