THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, July 27, 1994 TAG: 9407270359
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By TOM SHEAN, STAFF WRITER
LENGTH: Medium: 81 lines
Dominion Resources Inc. said Tuesday it had removed three directors from the board of its Virginia Power subsidiary.
The move intensified a bitter struggle over the direction of Virginia Power, the state's largest electric utility.
Dominion, a Richmond-based utility holding company, said it ousted William W. Berry, James F. Betts, and William G. Thomas from Virginia Power's 10-member board.
Thomas E. Spahn, an attorney for Dominion Resources, said the company has no plans to replace any of the other seven directors. Dominion, he said, has solicited suggestions for replacements from other Virginia Power directors but has not yet filled the vacancies.
Dominion also ordered a handful of changes in Virginia Power's bylaws. One makes Dominion chairman and chief executive officer Thomas E. Capps a voting member of all committees of the Virginia Power board.
Dominion justified the ouster of Berry and Thomas from Virginia Power's board by saying the two had tried to ``seize and retain control'' of the Dominion board and engaged in ``other activities contrary to the best interests of Virginia Power and its sole common shareholder,'' Dominion Resources.
Berry is a retired chairman and chief executive officer of Virginia Power and Dominion Resources. He continues to hold a seat on the Dominion board. Thomas, an attorney with the Alexandria law firm Hazel & Thomas, is active in Democratic Party politics in Virginia. Betts is a management consultant and retired insurance company executive. He is also a director of Dominion.
Berry, Betts and Thomas could not be reached for comment Tuesday.
But attorneys for Virginia Power and for a group of Dominion directors condemned the removal of the three board members as an effort by Capps, Dominion's CEO, to entrench himself.
These are ``three voices that (Dominion) doesn't like to hear because they are independent,'' said Arne M. Sorenson, an attorney who represents Berry, Betts and three other Dominion directors. Dominion's charge that Berry and others have sought to gain control over the Dominion board, Sorenson said, ``is dead wrong.''
When Berry devised a plan earlier this year for changing the structure of Dominion's board, he was responding to orders from state regulators that Dominion directors work out a long-term plan satisfactory to the full board, said Everette G. Allen Jr., an attorney for Virginia Power.
By removing Berry, Betts and Thomas from the power company's board, Dominion violated orders from state regulators protecting the independence of Virginia Power's board, Allen contended.
The utility, he said, might try to block the dismissal of the three board members by seeking an injunction from the State Corporation Commission.
Allen and Sorenson said their clients had received no notice from Dominion that the three directors would be dismissed.
Dominion's action is the latest development in an increasingly public struggle over the direction of Virginia Power and its management. James T. Rhodes, Virginia Power's president and chief executive officer, complained to some Dominion directors last spring of his inability to work with Dominion chairman Capps.
Rhodes told some directors he would take early retirement unless he reported to someone other than Capps. In response, the board appointed Betts as its vice chairman and intermediary between Capps and Rhodes.
But tensions mounted between Capps and Rhodes, collapsing the arrangement with Betts. The intensity of their dispute became public in mid-June when the State Corporation Commission ordered an investigation into the relationships between Dominion and Virginia Power. That investigation is still pending.
Dominion said it notified the SCC of its dismissals of Berry, Betts and Thomas from the Virginia Power board. The dismissals, it said, will take effect after a 21-day waiting period, a condition imposed on the company June 17 by the SCC. ILLUSTRATION: FILE COLOR PHOTO
One of the three ousted: William W. Berry, a retired chairman and
CEO of Virginia Power and Dominion Resources. He'll keep his seat
on the board of Dominion Resources.
by CNB