QUESTAR CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As amended and restated effective August 1, 1995)
1. PURPOSE
The Supplemental Executive Retirement Plan is intended to enable
Questar Corporation and its participating affiliates to attract and
retain key management personnel by providing them with monthly
supplemental retirement benefits to compensate them for the limitations
imposed by federal tax laws on benefits payable from the Questar
Corporation Retirement Plan. It is also intended to pay monthly
supplemental retirement benefits to certain officers based on years of
service that cannot be taken into account under the Questar Corporation
Retirement Plan.
2. DEFINITIONS
The following terms, when used herein, shall have the meanings set
forth below, unless a different meaning is plainly required by the
context:
"Board" means the Board of Directors of Questar Corporation or a
successor company.
"Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
"Committee" means the Management Performance Committee of the
Company's Board.
"Company" means Questar Corporation or any other organization
controlling Questar Corporation or any successor organization.
"Compensation" means an Officer's salary or wages, including
payments under incentive compensation plans paid by the Employer and
includable in taxable income during the applicable Plan Year, but
exclusive of any other forms of additional Compensation such as the
Employer's cost for any public or private employee benefit plan or any
income recognized by the Officer as a result of exercising stock
options. An Officer's Compensation for any Plan Year shall include any
Elective Deferrals of the Officer under Questar Corporation's Employee
Investment Plan or other tax-qualified plan, and any Compensation
deferred under the Questar Corporation Deferred Compensation Plan and
the Questar Corporation Deferred Share Plan. An Officer's Compensation
also shall include the amount of any reduction in Compensation for a
Plan Year agreed upon under one or more Compensation reduction
agreements entered into pursuant to the Questar Corporation Cafeteria
Plan.
"EIRP" means the Company's Executive Incentive Retirement Plan, as
amended or restated from time to time.
"Officer" means any officer of the Company and/or its affiliates
who has a vested right to receive benefits under the Company's
Retirement Plan and who has been nominated to receive supplemental
retirement benefits under the EIRP.
"Participating Corporation" means any company that is affiliated
with the Company and whose employees are covered by the Company's
Retirement Plan or that is affiliated with the Company and receives an
allocation of any employee benefit costs.
"Plan" means the plan set forth in and created by this document.
"Retired Officer" refers to an Officer who has satisfied the
eligibility requirements set forth in Section 4 of this Plan and who is
eligible to receive or who is receiving Supplemental Retirement Benefits
pursuant to the terms of this Plan.
"Retirement Plan" means the Company's Retirement Plan, as amended
or restated from time to time, or any successor plan. If not otherwise
defined, capitalized words or terms used in the Plan shall have the same
definitions used in the Retirement Plan.
"Special Situation Officer" means any officer or former officer of
the Company and/or its affiliates who was expressly promised upon his
reemployment prior to January 1, 1976, that his years of service prior
to a break in service would be restored to him for purposes of
calculating his retirement benefits.
"Special Supplemental Retirement Benefits" means benefits payable
to Special Situation Officers under the terms of the Plan calculated as
set forth in Section 6 or Section 7.
"Supplemental Retirement Benefits" means retirement benefits
payable to Retired Officers under the terms of the Plan calculated as
set forth in Section 5 or Section 7.
3. EFFECTIVE DATE
The Plan is effective January 1, 1987.
4. PARTICIPATION IN THE PLAN AND ELIGIBILITY FOR BENEFITS
Participation in the Plan shall be limited to Officers of the
Company and Participating Corporations. To become eligible for
Supplemental Retirement Benefits and Special Supplemental Retirement
Benefits under the Plan, an Officer must have a vested right to receive
benefits under the Retirement Plan. A Retired Officer cannot receive
benefits under both the Plan and the Company's Equalization Benefit
Plan. A Retired Officer cannot receive benefits under the Plan during
any period that his monthly benefits from the Retirement Plan are
suspended.
5. SUPPLEMENTAL RETIREMENT BENEFITS
An Officer who satisfies the eligibility requirements described
above shall be eligible to receive Supplemental Retirement Benefits
under the Plan. The first payment of Supplemental Retirement Benefits
will be due on the first day of the month following retirement, and
payments will continue on the first day of each month thereafter so long
as the Retired Officer is alive or so long as his surviving spouse is
entitled to receive monthly benefits under the Retirement Plan. (The
Retired Officer's surviving spouse must have been married to the Officer
at date of such Officer's retirement.)
The monthly Supplemental Retirement Benefit shall equal the
monthly benefit that would have been payable to or on behalf of a
Retired Officer under the Retirement Plan if the limitation on annual
benefits imposed by Section 415 of the Code and if the limitation on
annual compensation as defined in Section 401(a)(17) of the Code were
not applicable, and if the Retired Officer had not voluntarily chosen to
defer any compensation under the terms of the Questar Corporation
Deferred Share Plan or the Questar Corporation Deferred Compensation
Plan, less the monthly benefits payable from the Retirement Plan and the
EIRP. The monthly Supplemental Retirement Benefit of a Special
Situation Officer shall be calculated using the years of service
credited to him for purposes of calculating the Special Supplemental
Retirement Benefits as provided in Section 6.
Except as provided in Section 7, the monthly Supplemental
Retirement Benefit payable to or on behalf of the Retired Officer as
determined herein shall be paid in the same form as such Retired
Officer's benefits are payable under the Retirement Plan. Any monthly
Supplemental Retirement Benefits payable to the Retired Officer's
surviving spouse shall be reduced by the monthly benefits payable to
such surviving spouse under the Retirement Plan and the EIRP.
6. SPECIAL SUPPLEMENTAL RETIREMENT BENEFITS.
A Special Situation Officer shall be eligible to receive Special
Supplemental Retirement Benefits under the Plan.
The Special Supplemental Retirement Benefit is designed to provide
a Special Situation Officer with a supplemental retirement benefit that
is equal to the difference between the monthly Retirement Plan benefit
that he would have received if his years of service prior to his break
in service could be credited to him for purposes of calculating his
benefit under the Retirement Plan and the monthly Retirement Plan
benefit that he is entitled to receive because he cannot be given credit
for such years of service under the Retirement Plan.
The first payment of Special Supplemental Retirement Benefits will
be due on the first day of the month following retirement and payments
will continue on the first day of each month thereafter so long as the
Special Situation Officer is alive or so long as his surviving spouse is
entitled to receive monthly benefits under the Retirement Plan. (The
surviving spouse must have been married to the Special Situation Officer
at date of such Officer's retirement.)
The monthly benefit payable under this Section is not offset by
any monthly benefit payable under the EIRP. Except as provided in
Section 7, the monthly benefit payable to the Special Situation Officer
upon his retirement shall be paid in the same form as his benefits under
the Retirement Plan.
7. LUMP SUM ELECTION.
An Officer has a one-time election to receive the present value of
his Supplemental Retirement Benefit and Special Supplemental Retirement
Benefit (if applicable) in a lump sum. The Officer shall make this
election at least one year prior to retirement. The present value shall
be calculated using a standard mortality table referred to as the "83
Group Annuity Mortality Table" and 80 percent of the six-month average
rate for 30-year Treasury bond (with the six-month period ending as of
the date of the Officer's retirement). When making this election, the
Officer shall also indicate when the lump-sum payment shall be made and
if it is to be made in more than one installment. The full amount of
any lump-sum payment, together with credited interest, must be paid
within five years of the Officer's retirement. Any deferred payouts of
lump-sum payments shall be credited with interest calculated at a
monthly rate using the appropriate 30-year Treasury bond quoted in the
Wall Street Journal on the first business day of each month. (The
appropriate 30-year Treasury bond shall be the bond that has one closest
to maturity date (by month) preceding the date on which the interest is
to be credited.) Any lump-sum payments that are not deferred shall be
paid on the first business day of the month following the Officer's
retirement date or as soon thereafter as is administratively
practicable. The Officer's spouse must consent to the Officer's
election to receive a lump-sum payment. Such consent must be in writing
and must acknowledge the effect of such election.
If the Officer fails to make an election at least one year prior
to retirement, the Officer shall receive monthly benefits.
8. FUNDING
The Supplemental Retirement Benefits and Special Supplemental
Retirement Benefits payable under the Plan shall be paid by the Company
and Participating Corporations out of general assets. In its
discretion, the Board may establish a trust fund or make other
arrangements to assure payment of the Supplemental Retirement Benefits
and Special Supplemental Retirement Benefits.
9. ALLOCATION OF COSTS
The cost of Supplemental Retirement Benefits and Special
Supplemental Retirement Benefits paid to or on behalf of Retired
Officers shall be allocated to and be the responsibility of the Company
and Participating Corporations.
10. ADMINISTRATION
The Committee shall administer the Plan and may appoint an officer
of the Company to assist the Committee with this responsibility. The
Committee shall have the sole responsibility to interpret the Plan and
to adopt such rules and regulations for carrying out the Plan as it may
deem necessary. Decisions of the Committee shall be final and binding.
11. AMENDMENT OR TERMINATION
The Board may at any time amend, modify, or terminate this Plan;
provided, however, that any Retired Officers or their surviving spouses
receiving Supplemental Retirement Benefits and Special Supplemental
Retirement Benefits under the Plan at the date of amendment or
termination shall continue receiving such benefits as if such amendment
or termination had not occurred.
12. SUCCESSOR TO THE COMPANY
The Company shall require any successor or assign, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all of the business and/or assets of the Company, to
assume and agree to pay any Supplemental Retirement Benefits and Special
Supplemental Retirement Benefits in the same manner and to the same
extent that the Company would be required to perform if no such
succession or assignment had taken place.
13. CHANGE IN CONTROL AND LEGAL FEES
The Company shall pay all legal fees and expenses that a Retired
Officer or an Officer may incur as a result of the Company's contesting
the validity or enforceability of such person's right to receive
benefits under the terms of this Plan following a "Change in Control" of
the Company. For purposes of this Plan, a Change in Control of the
Company shall be deemed to have occurred if any "acquiring person" is or
becomes the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of 20 percent
or more of the Company's outstanding shares of common stock; provided,
however, that the term "acquiring person" shall not include the Company,
any subsidiary of the Company, any employee benefit plan established by
the Company, or trustee for such plan. A "Change in Control" shall also
include any act or event that, with the passage of time, would result in
a Distribution Date, within the meaning of the Rights Agreement dated as
of March 14, 1986, and as amended on May 16, 1989, between the Company
and First Chicago Trust Company of New York.