April 17, 2002

Dominion has given approval for its executives to exercise up to 20 percent of their vested options granted in 1999 and thereafter.

Those options were granted under a shareholder-approved plan and coincided with the elimination of the company’s cash-based long-term incentive program and Dominion’s agreement to acquire Consolidated Natural Gas Co.

A total of 1.1 million stock options are eligible to be exercised. Dominion will buy back any shares sold into the market as a result of exercises, effectively eliminating any dilution.

Dominion established executive share ownership guidelines in 2000. The policy has strict stock ownership guidelines for all officer levels, encouraging them to acquire various quantities of common stock, which can be calculated in a multiple of their salaries. Consequently, Dominion’s officers borrowed at least the amount necessary to achieve the ownership levels under a stock loan program. Officers in this program personally signed five-year notes, which cannot be prepaid. As of March 31, 2002, Dominion’s officers owned 2.19 million shares of Dominion stock, which is among the highest levels of executive stock ownership in the industry. The exercise of any vested options will not decrease the number of shares owned directly by Dominion’s officers.

While officers can exercise any or all of their vested options without advance approval, express approval is required before officers can exercise options or sell company stock without the loss of significant benefits. Non-officers have always had the ability to exercise their options and sell stock without the loss of any benefits.

Thos. E. Capps, chairman, president and chief executive officer, said: “With this decision, officers are able to achieve tangible recognition for the value they have helped to create for shareholders over the last three years.”

Capps noted that Dominion’s stock price has increased by 58 percent since options were first granted to executives and other employees. When the company began its stock options program in 1999, Dominion was selling at $41.25 per share. The closing price on April 16 was $65.20.

“Dominion’s equity market value has risen about $10 billion since options were first granted in May 1999, and Dominion has paid out about $1.8 billion in common stock dividends,” Capps said.

During the last one, three and five-year periods, Dominion’s total shareholder return has exceeded the S&P 500 and the S&P Utilities Index: 
 

Capps said the company’s new policy strikes a balance between its cash-only short-term compensation structure and its long-term compensation structure. The long-term compensation structure is entirely predicated on the company’s stock price performance.

Capps said enabling officers to exercise options on a gradual and regular basis accomplishes several objectives:

• Gradual exercise of options over time by officers will benefit the company by avoiding a concentration of options selling in a compressed period of time, known as “bunching,” which could unduly pressure the company’s stock price.
   
• The addition of a near-term reward component provides liquidity and serves as a valuable executive retention tool.
   
• Because all officers have placed a large amount of their own net worth in company stock, officers may diversify their holdings without diminishing their level of personal direct ownership in the company. Direct ownership by officers will remain at least at the same level prior to exercise of the options. As of March 31, 2002, Dominion’s officers owned more than $140 million in company stock.

“When Dominion and CNG merged in 2000, we wanted to develop an incentive to get the employees of the combined company in the same boat, rowing in the same direction, propelling at the same pace for shareholders,” Capps said. “The executive stock ownership guidelines and the stock options program have proven to be the perfect twosome for linking officers at the hip with shareholders.”

“The large majority of my net worth will remain in Dominion stock,” he said. “And that would be the case for all other officers as well.” 

* * *

Dominion is hosting a conference call for investors to discuss first-quarter earnings at 10 a.m. EDT on Thursday, April 18. Members of the media are also invited to listen.

Executive Vice President and Chief Financial Officer Thomas N. Chewning will conduct the call. Questions about the company’s executive options policy will also be entertained at that time.

Domestic investors who wish to participate in the conference call should dial 800-314-7867. International investors should call 719-219-0214. The confirmation number required to join the call is 785609. Participants should dial in 5 to 10 minutes prior to the scheduled start time.

A live web cast of the conference call will be available on the company’s investor information page at www.dom.com/investors.

A tape recording of the conference call will be available from approximately 1 p.m. EDT April 18 through 11 p.m. EDT April 23. Domestic investors may access the recording by dialing 888-203-1112. International callers should dial 719-457-0820 to access the recording. The access code for the replay is also 785609. A replay of the conference call also will be available on the company’s investor information home page by the end of the day April 18. 

* * *

Dominion is one of the nation's largest producers of energy, with a production capability of more than 3 trillion British thermal unit of energy per day. Dominion has a diversified and integrated energy portfolio consisting of 22,100-megawatts of generation, 5.1 trillion cubic feet equivalent of natural gas reserves, 7,600 miles of natural gas transmission pipeline and the nation's largest underground natural gas storage system with more than 950 billion cubic feet of storage capacity. Dominion also serves 3.9 million franchise natural gas and electric customers in five states. In addition, Dominion owns a managing equity interest in Dominion Fiber Ventures LLC, owner of Dominion Telecom. For more information about Dominion, visit the company's web site at www.dom.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations may include factors that are beyond the company's ability to control or estimate precisely, such as estimates of future market conditions, estimates of proved and unproved reserves and the behavior of other market participants. Other factors include, but are not limited to, weather conditions, economic conditions in the company's service area, fluctuations in energy-related commodity prices, trading counterparty credit risks, risks associated with successfully executing the telecommunications business plan and other uncertainties. Other risk factors are detailed from time to time in the company's Securities & Exchange Commission filings.

###