Exhibit 10(ii)
AMENDMENT
TO
EMPLOYMENT AGREEMENT
This AMENDMENT (the "September 1995 Amendment") to the
Employment Agreement dated as of April 21, 1995 (the "April 1995
Employment Agreement") between VIRGINIA ELECTRIC AND POWER
COMPANY (the "Company") and XXXXX X. XXXXXX (the "Executive") is
made as of September 15, 1995.
RECITALS:
The Board of Directors of the Company (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 has
and continues to believe that it is particularly important to
have stable, excellent management. The Board of Directors
believes that the continued services of the Executive are
essential to preserve consistent management of the Company at the
present time. Therefore, the Executive and the Board of
Directors have agreed that the term of employment of the
Executive should be extended under the April 1995 Employment
Agreement until July 31, 1999. To accomplish this, the
Organization and Compensation Committee of the Board of Directors
has recommended, and the Board of Directors has approved, certain
amendments to the April 1995 Employment Agreement. All terms in
this Amendment that are defined in the April 1995 Employment
Agreement have the meaning provided therein, unless otherwise
specified in this Amendment.
NOW, THEREFORE, in consideration of the foregoing, the
parties agree as follows:
1. Section 1 of the April 1995 Employment Agreement is
amended by replacing the phrase "July 31, 1996" with the phrase
"July 31, 1999".
3. Section 5(a) is amended by changing the title of the
section to "Completion Benefits" and by replacing the phrase "the
Term of this Agreement, and terminates his employment at the end
of the Term of this Agreement" with the phrase "July 31, 1996."
2. Section 5(a)(i) is amended by replacing the phrase "the
Executive's annual salary during his final year of employment" in
the first sentence with the phrase "the Executive's highest rate
of annual salary in effect at any time during his final year of
employment."
3. Section 5(a)(ii) of the April 1995 Employment Agreement
is amended by replacing the phrase "55%" with the phrase "65%".
4. Section 5(a)(iv) of the April 1995 Employment Agreement
is amended by replacing the phrase "July 31, 1996" each place it
appears with the phrase "the date of termination of his
employment".
5. Section 5(a)(v) of the April 1995 Employment Agreement
is amended by replacing the phrase "August 1, 1996" with the
phrase "the day following the date of termination of his
employment".
6. Sections 5(b) and 5(b)(i) of the April 1995 Employment
Agreement are replaced with the following:
"(b) In addition to the foregoing, if the Executive
continues in the employment of the Company through July 31,
1996, the Executive will receive upon his termination of
employment with the Company a single lump sum cash payment
equal to the present value of the annual base salary and
annual cash incentive awards (computed as described below)
that the Executive is projected to receive for employment in
the period from August 1, 1996 until April 21, 1997 (i.e.,
the end of the term of the 1994 Employment Agreement). The
lump sum will be computed as follows:
(i) For purposes of this calculation, the annual
base salary that the Executive is projected to receive
for employment from August 1, 1996 until April 21, 1997
will be calculated at the highest annual base salary
rate in effect for the Executive during the three-year
period ending on July 31, 1996. For purposes of this
calculation, the annual cash incentive awards that the
Executive is projected to receive for employment from
August 1, 1996 until April 21, 1997 will be calculated
at a rate equal to the highest annual cash incentive
award paid to the Executive during the three-year
period ending on July 31, 1996. Salary and bonus that
the Executive elected to defer will be taken into
account for purposes of this Agreement without regard
to the deferral."
7. Sections 6(a) and 6(b) of the April 1995 Employment
Agreement are amended to read as follows:
"6. Termination of Employment.
(a) During the Term of this Agreement, the
Company may terminate the Executive's employment only for
Cause. During the Term of this Agreement, the Executive may
voluntarily terminate employment under the circumstances
described in clauses (i)-(v) of this subsection (a). After
July 31, 1996, the Executive may voluntarily terminate
employment under the circumstance described in clause (vi)
of this subsection (a). If the Executive's employment is
terminated for Cause on or before July 31, 1996, he will be
entitled only to the benefits described in Section 12. If
the Executive's employment is terminated for Cause after
July 31, 1996, or if the Executive voluntarily terminates
employment pursuant to this Section 6(a), the Executive will
be entitled to receive the benefits described in subsection
(b) below. Subject to the provisions of this subsection
(a), the Executive may voluntarily terminate employment
after (i) the Executive's base salary is reduced, (ii) the
Executive is not in good faith considered for incentive
awards as described in Section 4(a)(ii), (iii) the Company
fails to provide benefits as required by Section 4(b), (iv)
the Executive's place of employment is relocated to a
location further than 30 miles from Richmond, Virginia, (v)
the Executive's working conditions or management
responsibilities are substantially diminished (other than on
account of the Executive's disability, as defined in Section
7 below), or (vi) the Executive voluntarily terminates
employment on or after August 1, 1996 upon 90 days prior
written notice to the Company. In order for clause (i),
(ii), (iii), (iv) or (v) of this subsection (a) to be
effective: (1) the Executive must give written notice to
the Company indicating that the Executive intends to
terminate employment under this subsection (a), (2) the
Executive's voluntary termination under this subsection must
occur within 60 days after an event described in clause (i),
(ii), (iii), (iv) or (v) of the preceding sentence, 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), (iv) or (v), 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), (iv) or (v), as the case may be,
within 30 days after receiving the Executive's written
notice, the Executive may not terminate employment under
this subsection (a) on account of the event specified in the
Executive's notice.
(b) In accordance with the provisions of Section
6(a) above, the Executive will be entitled to receive the
following benefits determined as of the date of his
termination of employment:
(i) The Executive will receive the benefits
described in Section 5(a)(i), (ii), (iii), (iv), (v)
and (vi) above as of the date of his termination of
employment. In addition, the Executive will receive
the single lump sum cash payment described in Section
5(b) of this Agreement if such payment is not otherwise
payable under the terms of Section 5(b).
(ii) The Executive will be credited with a total
of 30 years of service and will be considered to have
attained age 60 (if he has not already done so) for
purposes of the Company's retirement plans.
(iii) 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 medical and other welfare 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. 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 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."
8. The last sentence of Section 6(c) of the April 1995
Employment Agreement is amended to read as follows:
"If the Executive voluntarily terminates employment prior to
the end of the Term of this Agreement for a reason not
described in subsection (a) above or Section 7 or Section 12
below, this Agreement will immediately terminate, and the
Executive shall be entitled to the payment of the benefits under
Sections 5(a) and 5(b) if the termination occurs after July 31,
1996."
9. The first two sentences of Section 7 of the April 1995
Employment Agreement are deleted and the following new sentences
are added in their place:
"If the Executive becomes disabled (as defined below) during
the Term of this Agreement while he is employed by the
Company, the Executive shall be entitled to receive the
benefits described in Sections 5(a)(i), 5(a)(ii), 5(a)(iii),
5(a)(iv), 5(a)(v), 5(a)(vi), and 6(b)(ii) of this Agreement
as of the date on which he is determined by the Company to
be disabled. If the Executive dies during the Term of this
Agreement while he is employed by the Company, the benefits
described in Sections 5(a)(i), 5(a)(ii), 5(a)(iii),
5(a)(iv), 5(a)(v), 5(a)(vi), and 6(b)(ii) will be provided
to the Executive's beneficiary designated under the terms of
the applicable benefit plan. In addition, if the Executive
becomes disabled or dies on or after August 1, 1996, he or
his beneficiary shall be entitled to the benefit described
in Section 5(b)."
10. Section 8 of the April 1995 Employment Agreement is
amended in its entirety to read as follows:
8. Cause. For purposes of this Agreement, the term
"Cause" means (i) material misappropriation with respect to
the business or assets of the Company, (ii) persistent
refusal or willful failure of the Executive materially to
perform his duties and responsibilities to the Company,
which continues after the Executive receives notice of such
refusal or failure, (iii) conviction of a felony involving
moral turpitude, or (iv) the use of drugs or alcohol that
interferes materially with the Executive's performance of
his duties. The foregoing acts or events will constitute
"Cause" for purposes of this Agreement only to the extent
that they were committed on or after the date of the
September 1995 Amendment."
WITNESS the following signatures.
VIRGINIA ELECTRIC AND POWER
COMPANY
By: /s/Xxxxxxx X. Xxxxxx
________________________
Xxxxxxx X. Xxxxxx
Chairman, Organization
and Compensation
Committee
Dated: 9/15/95
/s/Xxxxx X. Xxxxxx
________________________
Xxxxx X. Xxxxxx
Dated: 9/15/95
