<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THIS PROSPECTUS SUPPLEMENT RELATES TO AN EFFECTIVE REGISTRATION STATEMENT +
+UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND IS SUBJECT TO COMPLETION OR +
+AMENDMENT. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Filed Pursuant to Rule 424(B)(2)
Registration No. 333-35501
PROSPECTUS SUPPLEMENT ISSUED January 9, 1998 (Subject to Completion)
(To Prospectus dated September 17, 1997)
5,000,000 Shares
Dominion Resources, Inc.
[LOGO OF DOMINION RESOURCES APPEARS HERE]
COMMON STOCK
-----------
ALL OF THE SHARES OF COMMON STOCK (WITHOUT PAR VALUE) BEING OFFERED ARE BEING
SOLD BY THE COMPANY. OUR COMMON STOCK IS LISTED AND TRADED ON THE NEW YORK STOCK
EXCHANGE UNDER THE SYMBOL "D." THE LAST REPORTED SALE PRICE OF THE COMMON STOCK
ON THE NEW YORK STOCK EXCHANGE ON JANUARY 8, 1998 WAS $41 13/16 PER SHARE.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
PRICE $ A SHARE
-----------
<TABLE>
<CAPTION>
PRICE PROCEEDS
TO UNDERWRITING TO
PUBLIC DISCOUNTS(1) COMPANY(2)
------ ------------ ----------
<S> <C> <C> <C>
Per Share........................................ $ $ $
Total(3)......................................... $ $ $
</TABLE>
- -----
(1) We have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriters."
(2) Before deducting offering expenses we will pay, estimated to be
$265,500.
(3) We have granted the Underwriters a 30-day option, after the date of this
Prospectus Supplement, to purchase up to 750,000 additional shares of
Common Stock at the Price to Public less Underwriting Discounts for the
purpose of covering any over-allotments. If the option is fully
exercised, the total Price to Public, Underwriting Discounts and
Proceeds to the Company will be $ , $ and $ . See "Underwriters."
-----------
The Underwriters are offering the Shares of Common Stock subject to prior
sale and their acceptance of the Shares from us. Our sale of the Shares to the
Underwriters is subject to a number of conditions. The Underwriters expect to
deliver the Shares to purchasers in New York, New York on or about January ,
1998. Purchasers must pay for the Shares in immediately available funds.
-----------
MORGAN STANLEY DEAN WITTER
LEHMAN BROTHERS
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
January , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE COMMON
STOCK OFFERING AND MAY BID FOR AND PURCHASE SHARES OF COMMON STOCK IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."
----------------
ABOUT THIS PROSPECTUS SUPPLEMENT
You should read this Prospectus Supplement along with the Prospectus that
follows. Both documents contain information you should consider when making
your investment decision. You should rely only on the information provided or
incorporated by reference in this Prospectus Supplement and the Prospectus. We
have not authorized anyone else to provide you with different information. We
are not making an offer of the Common Stock in any state where the offer is
not permitted. You should not assume that the information in this Prospectus
Supplement or the Prospectus is accurate as of any date other than the date on
the front of these documents.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
The Company................................................................ S-3
Common Stock Dividends and Price Range..................................... S-3
Selected Financial Information............................................. S-4
Other Selected Data........................................................ S-4
Capitalization............................................................. S-5
Use of Proceeds............................................................ S-5
Recent Developments........................................................ S-5
Underwriters............................................................... S-7
Legal Opinions............................................................. S-8
PROSPECTUS
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of Debt Securities............................................. 3
Description of Capital Stock............................................... 7
Common Stock............................................................. 7
Preferred Stock.......................................................... 8
Virginia Stock Corporation Act and the Articles and the Bylaws............. 8
Plan of Distribution....................................................... 11
Legal Opinions............................................................. 12
Experts.................................................................... 12
</TABLE>
S-2
<PAGE>
THE COMPANY
Dominion Resources, Inc. is a holding company headquartered in Richmond,
Virginia. Our operating subsidiaries are:
. Virginia Power/North Carolina Power, principally an electric utility serving
two million residences and businesses in a 30,000-square-mile region from
northern Virginia to northeastern North Carolina. It owns and operates
nuclear, coal, natural gas, oil and hydroelectric power stations;
. Dominion Energy, Inc., an independent power and natural gas subsidiary. It
has ownership and operating interests in 27 generating facilities in six U.S.
states, Argentina, Belize, Bolivia and Peru. This company has about 460
billion cubic feet of proven natural gas reserves throughout several major
regions of the United States;
. Dominion Capital, Inc., a financial services and real estate subsidiary, with
commercial and mortgage lending entities, a full-service commercial real
estate company, a large hydroelectric station in Louisiana, and a variety of
debt and equity investments; and
. East Midlands Electricity plc, principally an electric power distribution and
supply company serving 2.3 million homes and businesses in the East Midlands
region of the United Kingdom.
For additional information about our company, see "Where You Can Find More
Information."
COMMON STOCK DIVIDENDS AND PRICE RANGE
Our company (Virginia Power prior to the creation of our holding company in
1983) has paid cash dividends on its Common Stock in each year since 1925.
Future dividends will depend on future earnings, the financial condition of the
Company and other factors. Our Board of Directors has the right to change our
dividends at any time.
The following table shows the high and low sales prices of our Common Stock
as reported by the New York Stock Exchange on the composite tape in The Wall
Street Journal and cash dividends paid:
<TABLE>
<CAPTION>
CASH
YEAR HIGH LOW DIVIDENDS
- ---- --------- ------- ---------
<S> <C> <C> <C>
1995
First Quarter....................................... $39 1/4 $35 1/2 $.645
Second Quarter...................................... 38 5/8 35 7/8 .645
Third Quarter....................................... 37 7/8 34 7/8 .645
Fourth Quarter...................................... 41 5/8 37 5/8 .645
-----
Year................................................ 41 5/8 34 7/8 $2.58
=====
1996
First Quarter....................................... 44 3/8 37 5/8 $.645
Second Quarter...................................... 40 1/4 37 .645
Third Quarter....................................... 40 36 7/8 .645
Fourth Quarter...................................... 41 37 1/8 .645
-----
Year................................................ 44 3/8 36 7/8 $2.58
=====
1997
First Quarter....................................... 41 1/4 36 $.645
Second Quarter...................................... 36 5/8 33 3/8 .645
Third Quarter....................................... 38 1/16 35 3/4 .645
Fourth Quarter...................................... 42 11/16 36 1/8 .645
-----
Year................................................ 42 11/16 33 3/8 $2.58
=====
1998
First Quarter (through January 8, 1998)............. 42 15/16 40 7/8 --
</TABLE>
The last reported sale price of the Common Stock on the New York Stock
Exchange on January 8, 1998 was $41 13/16 per share.
S-3
<PAGE>
SELECTED FINANCIAL INFORMATION
This summary of financial information for the years 1992-1996 was taken from
and should be read along with the audited financial statements contained in our
most recent Annual Report on Form 10-K. Information for the nine months ended
September 30, 1997 and 1996 is taken from financial statements that have not
been audited but which, we believe, fairly present our financial position and
results of operations and cash flows for the period and should be read along
with our most recently filed Quarterly Reports on Form 10-Q. See "Where You Can
Find More Information."
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS
----------------- --------------------------------------------
1997(*) 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenues and
income (millions)..... $5,549.3 $3,647.0 $4,842.3 $4,651.7 $4,491.1 $4,433.9 $3,791.1
Operating expenses
(millions)............ 4,564.4 2,723.2 3,737.9 3,623.7 3,452.9 3,306.6 2,761.9
Operating income
(millions)............ 984.9 923.8 1,104.4 1,028.0 1,038.2 1,127.3 1,029.2
Income before
cumulative effect of
accounting change
(millions)............ 299.4 406.6 472.1 425.0 478.2 516.6 428.9
Change in accounting
for income taxes
(millions).......... -- -- -- -- -- -- 15.6
-------- -------- -------- -------- -------- -------- --------
Net income (millions).. $ 299.4 $ 406.6 $ 472.1 $ 425.0 $ 478.2 $ 516.6 $ 444.5
======== ======== ======== ======== ======== ======== ========
Earnings per common
share................. $ 1.62 $ 2.29 $ 2.65 $ 2.45 $ 2.81 $ 3.12 $ 2.76
Average common shares
outstanding
(millions)............ 184.5 177.6 178.3 173.8 170.3 165.7 161.1
</TABLE>
- --------
(*) Reflects the acquisition of East Midlands Electricity plc in early 1997 and
the effect of an anticipated one-time windfall profits tax which was levied
on East Midlands in the third quarter.
OTHER SELECTED DATA
<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, -----------------------------------------------------
1997 1996 1995 1994 1993 1992
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets (millions)....... $19,730.0 $14,905.6 $13,903.3 $13,562.2 $13,349.5 $12,615.1
Capitalization
(millions)............. 13,006.0 10,281.8 9,914.9 9,786.3 9,474.9 9,088.7
Capitalization ratios
(percent):
Long-term debt and
capital lease
obligations(*)....... 55% 44% 44% 45% 44% 45%
Preferred securities
of subsidiary trust.. 1 1 1 -- -- --
Preferred stock....... 5 7 7 8 9 9
Common equity......... 39 48 48 47 47 46
--------- --------- --------- --------- --------- ---------
100% 100% 100% 100% 100% 100%
========= ========= ========= ========= ========= =========
</TABLE>
- --------
(*) Excludes nonrecourse financing of nonutility subsidiaries and short-term
debt.
S-4
<PAGE>
CAPITALIZATION
The table below shows our capitalization on a consolidated basis as of
September 30, 1997. The "As Adjusted" column reflects our capitalization after
giving effect to this offering of Common Stock, the December 1997 sale of
$250,000,000 of 7.83% capital securities by a subsidiary trust, and the use of
the net proceeds from both offerings. You should read this table along with our
audited financial statements contained in our most recent Annual Report on Form
10-K and the information presented in our Quarterly Reports on Form 10-Q. See
"Where You Can Find More Information."
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
---------------------
ACTUAL AS ADJUSTED
--------- -----------
(IN MILLIONS)
<S> <C> <C>
Long-term debt and capital lease obligations(*)........... $ 7,155.8 $ 6,710.2
Preferred securities of subsidiary trusts................. 135.0 382.1
Preferred stock........................................... 689.0 689.0
Common equity............................................. 5,026.2 5,224.7
--------- ---------
Total capitalization...................................... $13,006.0 $13,006.0
========= =========
</TABLE>
- --------
(*) Excludes nonrecourse financing of nonutility subsidiaries and short-term
debt.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of Common Stock for the
repayment of debt. This debt may include a portion of a five-year revolving
credit facility used to finance our purchase of East Midlands Electricity plc
in early 1997. This credit facility has a variable interest rate which was
7.73% as of January 8, 1998.
RECENT DEVELOPMENTS
U.S. REGULATORY DEVELOPMENTS
The U.S. electric industry is undergoing an evolutionary change toward less
regulation and more competition. Many states are writing new laws and
regulations to restructure utilities to promote competition for electric
service.
Currently, there is no general retail competition in Virginia or North
Carolina, the primary service areas of Virginia Power. However, the U.S.
Congress is expected to consider federal legislation this year authorizing or
requiring retail competition, and the Virginia and North Carolina legislatures
are both currently studying electric power competition. Each of these
legislative bodies will soon be convening for its 1998 session. We cannot
predict what, if any, definitive actions any of them will take, but it is clear
that their actions could have a substantial impact on us, both operationally
and financially.
In addition, in late 1995 the Virginia State Corporation Commission
instituted a study of electric utility competition. In November 1996, the
Commission instituted a separate proceeding specifically involving Virginia
Power. The Commission's ongoing study is combined with a traditional rate
setting proceeding for Virginia Power in which the Commission Staff has said it
believes Virginia Power's rates should be reduced. In March 1997, Virginia
Power filed with the Commission an alternative regulatory plan designed to
provide an orderly transition for Virginia Power should competition be allowed
in Virginia. Its plan also sought the Commission's approval in principle for
recovery of costs, known as stranded costs, which are likely to be rendered
unrecoverable by competition.
S-5
<PAGE>
In November 1997, the Virginia Commission Staff presented to the Virginia
legislature a draft working model for the future structure of the electric
industry. The report suggested a two-phase, five year period to address
restructuring issues. The report acknowledged the need for direction from the
Virginia legislature concerning policy issues surrounding competition in the
electric industry, including transition cost recovery, reliability and
selection of appropriate models for wholesale and retail competition.
In December 1997, Virginia Power requested the Virginia Commission to accept
withdrawal of its alternative regulatory plan from the Commission's
proceedings. Virginia Power believes that legislative guidance is needed before
transition cost issues can be resolved. Virginia Power believes that the
legislature would be more likely to act if its alternative rate regulatory plan
is not pending at the same time before the Commission. The Commission's
decision on withdrawal is expected in early 1998.
If the Virginia legislature indicates that it will consider this subject in
its 1998 session, Virginia Power intends to propose its legislative solutions
for bringing competition to Virginia. Virginia Power's legislative proposals
will include components of the alternative regulatory plan submitted to the
Commission, and also will address issues which include potential stranded costs
related to nuclear power operation and power purchase contracts, unbundling
electric utility services, retail customer access to wholesale competition and
establishment of independent system operators and regional power exchanges.
U.K. REGULATORY DEVELOPMENTS
East Midlands Electricity plc continues to prepare for expanded competition
within the U.K. electricity supply market. The final phase of competition is to
begin in April 1998 and is expected to be fully implemented by the end of 1998.
East Midlands anticipates that 2.3 million customers within its service
territory will be affected by supply deregulation and, in order to prepare for
competition, the Company is making substantial investments in its computer
infrastructure. The introduction of full competition and associated operational
costs could have an adverse effect on East Midlands' earnings.
OTHER
Because the worldwide electric power industry is rapidly changing, especially
in the U.S., there are many opportunities for acquisitions of electric power
assets and for business combinations. We investigate any of the opportunities
we learn about that may increase shareholder value or build on our existing
businesses. Any acquisitions or combinations may result in transactions
involving cash, debt or equity securities, including Common Stock, and may
involve payment of a premium over book and market values. Such transactions or
payments could dilute the interest of holders of Common Stock.
S-6
<PAGE>
UNDERWRITERS
Subject to terms and conditions of the Underwriting Agreement which we have
entered into with the Underwriters named below, the Underwriters have each
agreed to purchase, and we have agreed to sell to each of them, the number of
shares of Common Stock written opposite their names in the table below.
<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------
<S> <C>
Morgan Stanley & Co. Incorporated.....................................
Lehman Brothers Inc. .................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated....................
J.P. Morgan Securities Inc. ..........................................
---------
Total............................................................... 5,000,000
=========
</TABLE>
The obligations of the Underwriters to purchase the shares of Common Stock
are subject to certain conditions. If any shares are purchased, the
Underwriters will be obligated to purchase all 5,000,000 shares of Common
Stock.
The Underwriters have advised us that they initially propose to offer the
Common Stock to the public at the price to public on the cover page of this
Prospectus Supplement and to certain dealers at that price less a concession of
no more than $ per share. The Underwriters may allow, and such dealers may
reallow, a discount of no more than $ per share to certain other dealers.
After the initial public offering, the price to public, concession and discount
may be changed.
We have granted the Underwriters an option to purchase up to 750,000
additional shares of Common Stock at the price to public on the cover page of
this Prospectus Supplement, less underwriting discounts, for the purpose of
covering any over-allotments. The option will be exercisable for 30 days after
the date of this Prospectus Supplement. If they exercise the option, each of
the Underwriters will be obligated to purchase its pro rata portion of the
shares for which the option is exercised, based on the proportion of its
initial commitment shown in the above table.
We will indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or contribute to
payments of this type that they may be required to make.
We have agreed not to offer or sell any other shares of Common Stock or
Common Stock equivalents for 90 days after the date of this Prospectus
Supplement. Common Stock equivalents include securities convertible into or
exchangeable for Common Stock. During the 90-day period, we have also agreed
not to sell to third parties any call option or other right to acquire Common
Stock or Common Stock equivalents and not to purchase from third parties any
put option or other right to sell Common Stock or Common Stock equivalents. In
addition, we have agreed not to enter into any swap or other arrangement that
transfers the economic consequences of ownership of Common Stock or Common
Stock equivalents. There are some exceptions to these restrictions, including
the issuance of Common Stock under our benefit plans and in connection with our
Dominion Direct Investment plan.
S-7
<PAGE>
To facilitate this offering, the Underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of the Common Stock.
Specifically, the Underwriters may over-allot in connection with the offering,
creating a short position in the Common Stock for their own account. In
addition, to cover over-allotments or to stabilize the price of the Common
Stock, the Underwriters may bid for, and purchase Common Stock in the open
market. Finally, the underwriting syndicate may reclaim selling concessions
allowed to an underwriter or a dealer if the syndicate repurchases previously
distributed Common Stock in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities, and
may end any of these activities at any time. Some of the Underwriters or their
affiliates have provided investment or commercial banking services to us in the
past and are likely to do so in the future. They receive customary fees and
commissions for these services.
LEGAL OPINIONS
Certain legal matters in connection with the offering of the Common Stock
will be passed upon for the Company by McGuire, Woods, Battle & Boothe LLP,
Richmond, Virginia, and for the underwriters by LeBoeuf, Lamb, Greene & MacRae,
L.L.P., a limited liability partnership including professional corporations,
New York, New York. LeBoeuf, Lamb, Greene & MacRae, L.L.P. also performs
certain legal services for us on other matters.
S-8
<PAGE>
Prospectus
[LOGO OF DOMINION RESOURCES APPEARS HERE]
DOMINION RESOURCES, INC.
901 East Byrd Street
Richmond, Virginia 23219-4072
(804) 775-5700
$950,000,000
Debt Securities
Preferred Stock
Common Stock
-------------------------------------------------------------------
We will provide specific terms of these securities in supplements to this
prospectus.
You should read this prospectus and any supplement carefully before you invest.
-------------------------------------------------------------------
These securities have not been approved by the SEC or any state securities
commission, nor have these organizations determined that this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
This prospectus is dated September 17, 1997.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may,
over the next two years, sell any combination of the securities described in
this prospectus in one or more offerings up to a total dollar amount of
$950,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading WHERE YOU CAN FIND MORE INFORMATION.
We are participating in the SEC's plain English program. This is an
initiative launched by the SEC to make prospectuses and other information more
understandable to the general investor. To see more detail, you should read the
exhibits filed with this registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-
SEC-0330 for further information on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities.
. Annual Report on Form 10-K for the year ended December 31, 1996;
. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997;
. Current Reports on Form 8-K, filed January 23, 1997 and Form 8-K/A, filed
March 20, 1997; and
. The description of the Company's common stock contained in Form 8-B (Item 4)
dated April 29, 1983.
You may request a copy of these filings at no cost, by writing or telephoning
us at the following address:
Corporate Secretary
Dominion Resources, Inc.
901 East Byrd Street
Richmond, Virginia 23219-4072
(804) 775-5700
You should rely only on the information incorporated by reference or provided
in this prospectus or any prospectus supplement. We have not authorized anyone
else to provide you with different information. We are not making
2
<PAGE>
an offer of these securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of those documents.
THE COMPANY
Dominion Resources, Inc. is a holding company headquartered in Richmond,
Virginia. Our operating subsidiaries are:
. Virginia Power/North Carolina Power, principally an electric utility serving
two million residences and businesses in a 30,000-square-mile region from
northern Virginia to northeastern North Carolina. It owns and operates
nuclear, coal, natural gas, oil and hydroelectric power stations;
. Dominion Energy, Inc., an independent power and natural gas subsidiary. It
has ownership and operating interests in 27 generating facilities in six
U.S. states, Argentina, Belize, Bolivia and Peru. This company has about 460
billion cubic feet of proven natural gas reserves throughout several major
regions of the United States;
. Dominion Capital, Inc., a financial services and real estate subsidiary, with
commercial and mortgage lending entities, a full-service commercial real
estate company, a large hydroelectric station in Louisiana, and a variety of
debt and equity investments; and
. East Midlands Electricity plc, principally an electric power distribution and
supply company serving 2.3 million homes and businesses in the East Midlands
region of the United Kingdom.
USE OF PROCEEDS
The net proceeds from the sale of the offered securities will be used for
general corporate purposes including repayment of debt. This debt may include
approximately $910 million incurred in connection with the purchase of East
Midlands in early 1997.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
TWELVE
MONTHS
ENDED TWELVE MONTHS ENDED DEC.
JUNE 31,
30, --------------------------
1997 1996 1995 1994 1993 1992
- ------ ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.38 2.75 2.56 2.77 2.90 2.69
</TABLE>
These computations include us and our subsidiaries, and 50% or less equity
companies. For these ratios, "earnings" is determined by adding "total fixed
charges" (excluding interest capitalized), income taxes, minority common
stockholders equity in net income and amortization of interest capitalized to
income from continuing operations after eliminating equity in undistributed
earnings and adding back losses of companies in which at least 20% but less
than 50% equity is owned. For this purpose, "total fixed charges" consists of
(1) interest on all indebtedness and amortization of debt discount and
expense, (2) interest capitalized and (3) an interest factor attributable to
rentals.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be our direct unsecured general obligations. The
Debt Securities will be either senior debt securities or subordinated debt
securities.
3
<PAGE>
The Debt Securities will be issued under one or more separate indentures
between us and The Chase Manhattan Bank as Trustee. Senior Debt Securities will
be issued under a "Senior Indenture" and Subordinated Debt Securities will be
issued under a "Subordinated Indenture". Together the Senior Indentures and the
Subordinated Indentures are called "Indentures".
We have summarized selected provisions of the Indentures below. The summary
is not complete. The forms of the Indentures have been filed as exhibits to the
registration statement and you should read the Indentures for provisions that
may be important to you. In the summary below, we have included references to
section numbers of the applicable Indentures so that you can easily locate
these provisions. Capitalized terms used in the summary have the meanings
specified in the Indentures.
GENERAL
The Debt Securities will be our direct, unsecured obligations. The Senior
Debt Securities will rank equally with all of our other senior and
unsubordinated debt. The Subordinated Debt Securities will have a junior
position to all of our Senior Debt.
Because we are a holding company that conducts all of our operations through
our subsidiaries, holders of Debt Securities will generally have a junior
position to claims of creditors of our subsidiaries, including trade creditors,
debtholders, secured creditors, taxing authorities, guarantee holders and any
preferred stockholders. Virginia Power has 6,890,140 outstanding shares of
preferred stock. All of our operating subsidiaries have ongoing corporate debt
programs used to finance their business activities. As of June 30, 1997, our
subsidiaries had approximately $7.8 billion of outstanding debt.
A prospectus supplement and a supplemental indenture relating to any series
of Debt Securities being offered will include specific terms relating to the
offering. These terms will include some or all of the following:
. The title and type of the Debt Securities;
. The total principal amount of the Debt Securities;
. The percentage of the principal amount at which the Debt Securities will be
issued and any payments due if the maturity of the Debt Securities is
accelerated;
. The dates on which the principal of the Debt Securities will be payable;
. The interest rate which the Debt Securities will bear and the interest
payment dates for the Debt Securities;
. Any optional redemption periods;
. Any sinking fund or other provisions that would obligate us to repurchase or
otherwise redeem the Debt Securities;
. Any provisions granting special rights to holders when a specified event
occurs;
. Any changes to or additional Events of Defaults or covenants;
. Any special tax implications of the Debt Securities, including provisions for
Original Issue Discount Securities, if offered; and
. Any other terms of the Debt Securities.
None of the Indentures limits the amount of Debt Securities that may be
issued. Each Indenture allows Debt Securities to be issued up to the principal
4
<PAGE>
amount that may be authorized by us and may be in any currency or currency unit
designated by us.
Debt Securities of a series may be issued in registered, bearer, coupon or
global form. (Sections 201 & 203.)
DENOMINATIONS
The prospectus supplement for each issuance of Debt Securities will state
whether the securities will be issued in registered form of $1,000 each or
multiples thereof or bearer form of $5,000 each.
SUBORDINATION
Under the Subordinated Indenture, payment of the principal, interest and any
premium on the Subordinated Debt Securities will generally be subordinated and
junior in right of payment to the prior payment in full of all Senior Debt. The
Subordinated Indenture provides that no payment of principal, interest and any
premium on the Subordinated Debt Securities may be made in the event:
. of any insolvency, bankruptcy or similar proceeding involving the Company or
our property, or
. we fail to pay the principal, interest, any premium or any other amounts on
any Senior Debt when due.
The Subordinated Indenture will not limit the amount of Senior Debt that we
may incur.
"Senior Debt" is defined to include all notes or other unsecured evidences of
indebtedness including guarantees of the Company for money borrowed by the
Company, not expressed to be subordinate or junior in right of payment to any
other indebtedness of the Company.
CONSOLIDATION, MERGER OR SALE
Each Indenture generally permits a consolidation or merger between us and
another corporation. They also permit the sale by us of all or substantially
all of our property and assets. If this happens, the remaining or acquiring
corporation shall assume all of our responsibilities and liabilities under the
Indentures including the payment of all amounts due on the Debt Securities and
performance of the covenants in the Indentures.
However, we will only consolidate or merge with or into any other corporation
or sell all or substantially all of our assets according to the terms and
conditions of the Indentures. The remaining or acquiring corporation will be
substituted for us in the Indentures with the same effect as if it had been an
original party to the Indenture. Thereafter, the successor corporation may
exercise our rights and powers under any Indenture, in our name or in its own
name. Any act or proceeding required or permitted to be done by our Board of
Directors or any of our officers may be done by the board or officers of the
successor corporation. If we sell all or substantially all of our assets, we
shall be released from all our liabilities and obligations under any Indenture
and under the Debt Securities. (Sections 801& 802.)
MODIFICATION OF INDENTURES
Under each Indenture our rights and obligations and the rights of the holders
may be modified with the consent of the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of each series affected by
the modification. No modification of the principal or interest payment terms,
and no modification reducing the percentage required for
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modifications, is effective against any holder without its consent. (Sections
901 & 902.)
EVENTS OF DEFAULT
"Event of Default" when used in an Indenture, will mean any of the following:
. failure to pay the principal or any premium on any Debt Security when due;
. failure to deposit any sinking fund payment when due;
. failure to pay interest on any Debt Security for 30 days;
. failure to perform any other covenant in the Indenture that continues for 90
days after being given written notice;
. certain events in bankruptcy, insolvency or reorganization of the Company; or
. any other Event of Default included in any Indenture or supplemental
indenture. (Section 501.)
An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under an Indenture. The Trustee may withhold notice to the
holders of Debt Securities of any default (except in the payment of principal
or interest) if it considers such withholding of notice to be in the best
interests of the holders. (Section 602.)
If an Event of Default for any series of Debt Securities occurs and
continues, the Trustee or the holders of at least 25% in aggregate principal
amount of the Debt Securities of the series may declare the entire principal of
all the Debt Securities of that series to be due and payable immediately. If
this happens, subject to certain conditions, the holders of a majority of the
aggregate principal amount of the Debt Securities of that series can void the
declaration. (Section 502.)
Other than its duties in case of a default, a Trustee is not obligated to
exercise any of its rights or powers under any Indenture at the request, order
or direction of any holders, unless the holders offer the Trustee reasonable
indemnity. (Section 601.) If they provide this reasonable indemnification, the
holders of a majority in principal amount of any series of Debt Securities may
direct the time, method and place of conducting any proceeding or any remedy
available to the Trustee, or exercising any power conferred upon the Trustee,
for any series of Debt Securities. (Section 512.)
COVENANTS
Under the Indentures, we will:
. pay the principal, interest and any premium on the Debt Securities when due;
. maintain a place of payment;
. deliver a report to the Trustee at the end of each fiscal year reviewing the
Company's obligations under the Indentures; and
. deposit sufficient funds with any paying agent on or before the due date for
any principal, interest or any premium.
PAYMENT AND TRANSFER
Principal, interest and any premium on fully registered securities will be
paid at designated places. Payment will be made by check mailed to the persons
in whose
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names the Debt Securities are registered on days specified in the Indentures or
any prospectus supplement. Debt Securities payments in other forms will be paid
at a place designated by us and specified in a prospectus supplement.
(Section 307.)
Fully registered securities may be transferred or exchanged at the corporate
trust office of the Trustee or at any other office or agency maintained by us
for such purposes, without the payment of any service charge except for any tax
or governmental charge. (Section 1002.)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more global certificates that will be deposited with a depositary
identified in a prospectus supplement. Unless it is exchanged in whole or in
part for Debt Securities in definitive form, a global certificate may generally
be transferred only as a whole unless it is being transferred to certain
nominees of the depositary. (Section 203.)
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company, New York, New York ("DTC") will act as depositary. Beneficial
interests in global certificates will be shown on, and transfers of global
certificates will be effected only through, records maintained by DTC and its
participants.
DEFEASANCE
We will be discharged from our obligations on the Debt Securities of any
series at any time if we deposit with the Trustee sufficient cash or government
securities to pay the principal, interest, any premium and any other sums due
to the stated maturity date or a redemption date of the Debt Securities of the
series. If this happens, the holders of the Debt Securities of the series will
not be entitled to the benefits of the Indenture except for registration of
transfer and exchange of Debt Securities and replacement of lost, stolen or
mutilated Debt Securities. (Section 401.)
Under Federal income tax law as of the date of this prospectus, a discharge
may be treated as an exchange of the related Debt Securities. Each holder might
be required to recognize gain or loss equal to the difference between the
holder's cost or other tax basis for the Debt Securities and the value of the
holder's interest in the trust. Holders might be required to include as income
a different amount than would be includable without the discharge. Prospective
investors are urged to consult their own tax advisers as to the consequences of
a discharge, including the applicability and effect of tax laws other than the
Federal income tax law.
DESCRIPTION OF CAPITAL STOCK
As of June 30, 1997, our authorized capital stock was 320,000,000 shares.
Those shares consisted of: (a) 20,000,000 shares of preferred stock, none of
which were outstanding; and (b) 300,000,000 shares of common stock, of which
185,604,273 shares were outstanding.
COMMON STOCK
Listing
Our outstanding shares of common stock are listed on the New York Stock
Exchange under the symbol "D". Any additional common stock we issue will also
be listed on the NYSE.
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Dividends
Common shareholders may receive dividends when declared by the Board of
Directors. Dividends may be paid in cash, stock or other form. In certain
cases, common shareholders may not receive dividends until we have satisfied
our obligations to any preferred shareholders.
Fully Paid
All outstanding shares of common stock are fully paid and non-assessable. Any
additional common stock we issue will also be fully paid and non-assessable.
Voting Rights
Each share of common stock is entitled to one vote in the election of
directors and other matters. Common shareholders are not entitled to preemptive
or cumulative voting rights.
Other Rights
We will notify common shareholders of any shareholders' meetings according to
applicable law. If we liquidate, dissolve or wind-up our business, either
voluntarily or not, common shareholders will share equally in the assets
remaining after we pay our creditors and preferred shareholders.
Transfer Agents and Registrars
We, along with Chase Mellon Shareholder Services, are transfer agent and
registrar. You may contact us at the address listed on page 2 or Chase Mellon
located in Ridgefield, New Jersey.
PREFERRED STOCK
The following description of the terms of the preferred stock sets forth
certain general terms and provisions of our authorized preferred stock. If we
offer preferred stock, the specific designations and rights will be described
in the prospectus supplement and a description will be filed with the SEC.
Our Board of Directors can, without approval of shareholders, issue one or
more series of preferred stock. The Board can also determine the number of
shares of each series and the rights, preferences and limitations of each
series including the dividend rights, voting rights, conversion rights,
redemption rights and any liquidation preferences of any wholly unissued series
of preferred stock, the number of shares constituting each series and the terms
and conditions of issue. In some cases, the issuance of preferred stock could
delay a change in control of the Company and make it harder to remove present
management. Under certain circumstances, preferred stock could also restrict
dividend payments to holders of our common stock.
The preferred stock will, when issued, be fully paid and non-assessable.
The transfer agent, registrar, and dividend disbursement agent for a series
of preferred stock will be named in a prospectus supplement. The registrar for
shares of preferred stock will send notices to shareholders of any meetings at
which holders of the preferred stock have the right to elect directors or to
vote on any other matter.
VIRGINIA STOCK CORPORATION ACT AND THE ARTICLES AND THE BYLAWS
GENERAL
We are a Virginia corporation subject to the Virginia Stock Corporation Act
(the
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"Virginia Act"). Provisions of the Virginia Act, in addition to provisions of
our Articles of Incorporation and Bylaws, address corporate governance issues,
including the rights of shareholders. Some of these provisions could hinder
management changes while others could have an anti-takeover effect. This anti-
takeover effect may, in some circumstances, reduce the control premium that
might otherwise be reflected in the value of our common stock. If you are
buying this stock as part of a short-term investment strategy, this might be
especially important to you.
We have summarized the key provisions below. The descriptions are not
complete.You should read the actual provisions of our Articles and Bylaws and
the Virginia Act that relate to your individual investment strategy.
BUSINESS COMBINATIONS
The Virginia Act and our Articles generally require that any merger, share
exchange or sale of substantially all of the assets of a corporation be
approved by at least two-thirds of the votes entitled to be cast by each voting
group entitled to vote.
Section 13.1-725 of the Virginia Act contains several provisions relating to
transactions with "interested shareholders." Interested Shareholders are
holders of more than 10% of any class of a corporation's outstanding voting
shares. Transactions between a corporation and an Interested Shareholder are
referred to as Affiliated Transactions. The Virginia Act requires that material
affiliated transactions must be approved by at least two-thirds of the
shareholders not including the Interested Shareholder. Affiliated Transactions
requiring this two-thirds approval include mergers, share exchanges, material
dispositions of corporate assets, dissolution or any reclassification of the
corporation with its subsidiaries which increases the percentage of voting
shares owned by an Interested Shareholder by more than five percent.
For three years following the time that a shareholder becomes an Interested
Shareholder, a Virginia corporation cannot engage in an Affiliated Transaction
with the Interested Shareholder without approval of two-thirds of the
disinterested voting shares, and majority approval of "Disinterested
Directors." A Disinterested Director is a director who was a director on the
date on which an Interested Shareholder became an Interested Shareholder and
was recommended for election or elected by a majority of the Disinterested
Directors then on the board. After three years, the approval of the
Disinterested Directors is no longer required.
The provisions of the Virginia Act relating to Affiliated Transactions do not
apply if a majority of Disinterested Directors approve the acquisition of
shares making a person an Interested Shareholder.
The Virginia Act permits corporations to opt out of the Affiliated
Transactions provisions. We have not opted out.
The Virginia Act also contains provisions regulating certain "control share
acquisitions," which are transactions causing the voting strength of any person
acquiring beneficial ownership of shares of a public corporation in Virginia to
meet or exceed certain threshold voting percentages (20%, 33 1/3% or 50%).
Shares acquired in a control share acquisition have no voting
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rights unless the voting rights are granted by a majority vote of all
outstanding shares other than those held by the acquiring person or any officer
or employee-director of the corporation. The acquiring person may require that
a special meeting of the shareholders be held to consider the grant of voting
rights to the shares acquired in the control share acquisition.
Our Bylaws give us the right to redeem the shares purchased by an acquiring
person in a control share acquisition. We can do this if the acquiring person
fails to deliver a statement to us listing information required by the Virginia
Act or if our shareholders vote not to grant voting rights to the acquiring
person.
The Virginia Act permits corporations to opt out of the control share
acquisition provisions. We have not opted out.
DIRECTORS' DUTIES
The standards of conduct for directors of Virginia corporations are listed in
Section 13.1-690 of the Virginia Act. Directors must discharge their duties in
accordance with their "good faith business judgement of the best interest of
the corporation". Directors may rely on the advice or acts of others, including
officers, employees, attorneys, accountants and board committees if they have a
good faith belief in their competence. Directors' actions are not subject to a
"reasonableness" or "prudent person" standard. Virginia's Federal courts have
focused on the process involved with directors' decision-making and are
generally supportive of directors if they have based their decision on an
informed process. These elements of Virginia law
could make it more difficult to take over a Virginia corporation than
corporations in other states.
BOARD OF DIRECTORS
Members of our Board of Directors serve staggered three year terms. This
means that only one-third of our directors are elected each year.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Our shareholders can submit shareholder proposals and nominate candidates for
the Board of Directors if the shareholders follow advance notice procedures
described in our Bylaws.
To nominate directors, shareholders must submit a written notice to our
corporate secretary at least 60 days before a scheduled meeting. The notice
must include the name and address of the shareholder and of the nominee, a
description of any arrangements between the shareholder and the nominee,
information about the nominee required by the SEC, the written consent of the
nominee to serve as a director and other information.
Shareholder proposals must be submitted to our corporate secretary at least
90 days before the first anniversary of the date of our last annual meeting.
The notice must include a description of the proposal, the reasons for
presenting the proposal at the annual meeting, the text of any resolutions to
be presented, the shareholder's name and address and number of shares held and
any material interest of the shareholder in the proposal.
Director nominations and shareholder proposals that are late or that do not
include
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all required information may be rejected. This could prevent shareholders from
bringing certain matters before an annual or special meeting, including making
nominations for directors.
MEETINGS OF SHAREHOLDERS
Under our Bylaws, meetings of the shareholders may be called only by the
chairman of the board, the president or a majority of the Board of Directors.
This provision could have the effect of delaying until the next annual
shareholders' meeting shareholder actions which are favored by the holders of a
majority of our outstanding voting securities, because such person or entity,
even if it acquired a majority of the outstanding voting securities of Dominion
Resources, would be able to take action as a shareholder, such as electing new
directors or approving a merger, only at a duly called shareholders' meeting.
AMENDMENT OF ARTICLES AND BYLAWS
Generally, our Articles may be amended by a majority of the outstanding votes
entitled to be cast by each voting group entitled to vote on a given matter.
Some provisions of the Articles, however, may only be amended or repealed by
two-thirds of the votes entitled to be cast by each voting group entitled to
vote.
INDEMNIFICATION
We indemnify our officers and directors to the fullest extent permitted under
Virginia law against all liabilities incurred in connection with their service
to us.
LIMITATION OF LIABILITY
Our Articles provide that our directors will not be personally liable for
monetary damages to us for breaches of their fiduciary duty as directors,
unless they violated their duty of loyalty to us or our stockholders, acted in
bad faith, knowingly or intentionally violated the law, authorized illegal
dividends or redemptions or derived an improper personal benefit from their
action as directors. This provision applies only to claims against directors
arising out of their role as directors and not in any other capacity (such as
an officer or employee). Directors remain liable for violations of the federal
securities laws and we retain the right to pursue legal remedies other than
monetary damages, such as an injunction or rescission for breach of the
director's duty of care.
PLAN OF DISTRIBUTION
We may sell the offered securities (a) through agents; (b) through
underwriters or dealers; or (c) directly to one or more purchasers.
BY AGENTS
Offered securities may be sold through agents designated by us. The agents
agree to use their reasonable best efforts to solicit purchases for the period
of their appointment.
BY UNDERWRITERS
If underwriters are used in the sale, the offered securities will be acquired
by the underwriters for their own account. The underwriters may resell the
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the securities will be
subject to certain conditions. The underwriters will be obligated to purchase
all the securities of
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the series offered if any of the securities are purchased. Any initial public
offering price and any discounts or concessions allowed or re-allowed or paid
to dealers may be changed from time to time.
DIRECT SALES
Offered securities may also be sold directly by us. In this case, no
underwriters or agents would be involved.
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution of the
offered securities may be underwriters as defined in the Securities Act of 1933
(the "Act"), and any discounts or commissions received by them from us and any
profit on the resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Act. Any underwriters or
agents will be identified and their compensation described in a prospectus
supplement.
We may have agreements with the underwriters, dealers and agents to indemnify
them against certain civil liabilities, including liabilities under the Act, or
to contribute with respect to payments which the underwriters, dealers or
agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our subsidiaries in the ordinary course of their
businesses.
LEGAL OPINIONS
Thomas F. Farrell, II, Esq., who is our Senior Vice President--Corporate and
General Counsel, or another of our lawyers, will issue an opinion about the
legality of the offered securities for us. Any underwriters will be advised
about other issues relating to any offering by their own legal counsel.
EXPERTS
Deloitte & Touche LLP, independent accountants, audited our financial
statements and schedules incorporated by reference in this prospectus and
elsewhere in the registration statement. These documents are incorporated by
reference herein in reliance upon the authority of Deloitte & Touche LLP as
experts in accounting and auditing in giving the report.
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