Stock Split Information

Two-for-One Stock Split Frequently Asked Questions

At its meeting on October 26, 2007, your company’s board of directors approved a two-for-one stock split for shareholders of record on November 9, 2007.  As a result of the stock split, each shareholder will receive one additional share of Dominion common stock for each share held at the close of business on the split record date.

To assist our shareholders in their understanding of the split, we are providing answers to the most frequently asked questions.


What does a two-for-one stock split mean to Dominion shareholders?

A two-for-one stock split means a Dominion shareholder will be issued one additional share of common stock for every share of common stock held by that shareholder at the close of business on the record date. The split doubles the number of shares outstanding but the corresponding market value per share decreases by half.

Here’s an example:
Assume that as of the November 9, 2007 record date, an investor owns 100 shares of Dominion common stock and the market price is $90 per share. The investor’s total investment value would be $9,000. On the November 20, 2007 ex-split date the investor will own 200 shares at a market price of $45 per share (assuming a $90 stock price on November 19, 2007). The investor’s total investment value in Dominion would remain the same at $9,000 until the stock price moves up or down.

What is the effective date of the split?

There are several key dates to be aware of:

  • The record date, November 9, 2007, determines which shareholders are entitled to receive additional shares due to the split.
  • The payable date (or distribution date), November 19, 2007, is the date shareholders of record are mailed notification of the shares received as a result of the split.
  • The ex-split date, November 20, 2007, is the date when Dominion common shares will trade on the NYSE at the new split-adjusted price.
How does the split affect Dominion’s quarterly dividend rate?

The recently announced 79 cents per share dividend rate has been adjusted by half to reflect the increased number of shares outstanding because of the split. As an example, for a shareholder whose stock ownership increased from 100 to 200 shares because of the split, their next quarterly dividend will be based on 200 shares multiplied by 39.5 cent per share.

Why did Dominion approve a stock split?

The split reflects our awareness that Dominion remains a popular stock among retail investors, many of whom purchase shares through our Dominion Direct program.  By splitting our shares, we remove what many retail investors perceive as a price barrier to entry.  We believe most shareholders will view this as a constructive move and as an indicator of management’s positive outlook for the future of our company.

Is the stock split a taxable transaction?

No. The receipt of these additional shares will not result in taxable income under existing U.S. tax law. The tax basis of each share owned after the split will be half of what it was before the split. When you sell the shares received in the split, or any other shares owned as of the split record date, you must adjust your cost basis to properly reflect the split to determine your gain or loss.  You should consult with your tax advisor with any questions you have about calculating your cost basis or any state or foreign tax consequences.

Does the two-for-one stock split dilute the value of my Dominion stock holdings by increasing the number of shares outstanding?

No.  This move does not change the proportionate interest that a shareholder maintains in the company.  That is, a shareholder who owned 1% of Dominion common stock before the split will continue to own 1% of Dominion common stock after the split.

What happens if I sell my shares after the split record date and before the split distribution date?

Between November 7, 2007 and November 19, 2007, two separate markets will exist for Dominion’s common stock on the New York Stock Exchange (NYSE.) The “regular way” market, reported under the company’s normal D stock symbol, continues to trade at the higher, pre-split price. Since sellers in the “regular way” market will receive full value for the shares they sell, they are not entitled to the split shares they will receive by virtue of their being shareholders on the record date. Instead, they transfer their rights to the split shares to their buyers by means of “due bills.” The NYSE recognizes that shareholders might alternatively want to sell only the “new” split shares while retaining their old shares. This is accomplished by creating a “when issued” market at the post-split price. “When issued” trading is reported under the company’s normal trading symbol followed by “wi”, that is, Dwi.   “When issued” trading will end on the November 19, 2007 distribution date.

Will there be a “when issued” market for the split shares?

It is expected that the NYSE will authorize and establish a “when issued” market for the new split shares under the Dwi symbol.  This will occur only between November 7, 2007 and November 19, 2007. Trading in the “when issued” market will reflect the anticipated split value of Dominion shares. Settlement of “when issued” trades is expected to occur on November 26, 2007. This date is fixed by the NYSE as three business days after the distribution date. The “when issued” market is only of interest to shareholders planning to trade shares at the post-split price between November 7, 2007 and November 19, 2007 and its technicalities can be explained by the broker handling the trade.

When will the notice reporting additional shares be mailed to shareholders?

On November 19, 2007 Dominion Shareholder Services (our transfer agent) will mail written notification of additional shares to registered shareholders.

If your shares are held in a brokerage account, the additional shares will be sent to your broker automatically with no action required on your part. Please contact your broker directly for an account statement reflecting the additional shares credited to your brokerage account as a result of the split.

What do I do with my existing Dominion stock certificate(s)?

Your existing common stock certificates are still valid.  KEEP YOUR STOCK CERTIFICATES. DO NOT DESTROY THEM.  The stock certificates you personally hold should be kept in a safe place such as a safety deposit box, as they are valuable documents.

Will I receive a new stock certificate for my additional shares?

No. As a convenience to shareholders, all additional shares will be issued in book-entry form, either through the Direct Registration System (DRS) or as a credit to an existing Dominion Direct® account.

How will additional shares from the split be distributed to registered shareholders?
  • For Dominion Direct participants, all additional shares will be credited to their existing Dominion Direct account.
  • For shareholders who hold stock certificates and receive cash dividends, additional shares will be issued in book-entry form through the direct registration form of ownership. These shares will be described on Dominion account statements as DRS Shares.
What is Direct Registration?

The direct registration form of ownership allows registered shareholders to maintain their shares in book-entry form without the need for a physical certificate.  The shareholder retains full ownership of the shares without the responsibility of holding the actual certificate.

Why is Dominion using DRS?

There are advantages to having your shares in DRS. The benefits are that it:

  • saves you the burden of storing your certificate(s) in a safe place, i.e. safe deposit box or vault;
  • eliminates the risk of potential loss thus avoiding the significant costs involved in replacing any lost, stolen, or destroyed certificates;
  • eliminates the risk of fraudulent transfer of cancelled certificates;
  • saves the costs associated with the issuance and delivery of physical stock certificates;
  • makes your stock transactions faster and easier;
  • saves you the inconvenience of delivering stock certificates(s) to your broker for sale or safekeeping; and
  • allows for shares to be moved electronically to your brokerage account.
Are there any fees associated with DRS?

No. This is a free service that eliminates the worry and responsibility of keeping track of stock certificates, as well as the time and expense of replacement if certificates are lost or misplaced.

Without certificates, how will I know how many shares I own?

You will receive a Split Distribution Statement that is your proof of ownership. This statement will indicate the number of additional shares you own as a result of the split. When you receive your statement, keep it with your existing stock certificate(s), if applicable, and other important documents as a record of your ownership. Each time there is a transaction in your account, you will be sent an Activity Statement that reports the number of shares you own.

Can I receive a stock certificate for the DRS shares?

Yes. After the November 19, 2007 distribution you may request a stock certificate and one will be issued at no cost to you. Your request must be in writing and signed by all shareholders on the account. Your written request can be mailed or faxed to Dominion.

While it is solely your decision how to hold your shares, you should carefully review each alternative form and should consult with your financial advisor to determine which form is best for you.

Can I convert my other Dominion stock certificates into book-entry form?

Yes.  If you would like to take advantage of the convenience of having all shares held in book-entry form, you must mail your certificates to Dominion.  It is recommended that you mail your stock certificates, certified or registered and insured for 2% of the current market value.  This is the cost to replace the certificates if they are lost.  Do not sign your stock certificates.  Include written instructions indicating you would like to deposit your stock certificate(s).  All shareholders shown on the account must sign the written request.  The certificate shares will then be added to your account.

Will I be charged a fee to convert my certificate shares into book-entry form now?

No. This is a free service that eliminates the worry and responsibility of keeping track of stock certificates, as well as the time and expense of replacement if certificates are lost or misplaced.

What happens if my stock certificate(s) is lost or stolen?

You should immediately notify Dominion of the loss or theft and request paperwork to have your certificate(s) replaced.  You must complete an affidavit to have the certificate(s) replaced.  You will have to pay the cost of an indemnity bond and any processing fees (an indemnity bond typically costs approximately 2% of the value of the lost certificate).

If I previously authorized partial reinvestment or cash dividends based on a specific number of shares, what effect will the stock split have on my dividend payment?

Your current instruction will be followed and dividends will be reinvested or paid in cash based on the specific number of shares you originally authorized. If you would like to adjust that number to reflect the additional shares issued as a result of the split, you may do so by providing a new written authorization to Dominion. For the change to be effective for the December 20, 2007 dividend payment, your written authorization must be received by December 14, 2007.

Please be advised that all of the answers above are intended only to provide a general overview of the stock split process. None of the answers should be considered tax or investment advice. You should consult your tax or investment professionals for detailed advice that takes into account your specific circumstances.

NYSE : (April 17, 2014) D 70.67 -0.86