QUESTAR CORPORATION
ANNUAL MANAGEMENT INCENTIVE PLAN
(As amended and restated effective May 19, 1998)
Paragraph 1. Name. The name of this Plan is the Questar
Corporation Annual Management Incentive Plan (the Plan).
Paragraph 2. Purpose. The purpose of the Plan is to provide
an incentive to officers and key employees of Questar Corporation (the
Company) for the accomplishment of major organizational and individual
objectives designed to further the efficiency, profitability, and growth
of the Company.
Paragraph 3. Administration. The Management Performance
Committee (Committee) of the Board of Directors shall have full power
and authority to interpret and administer the Plan. Such Committee
shall consist of no less than three disinterested members of the Board
of Directors.
Paragraph 4. Participation. Within 60 days after the
beginning of each year, the Committee shall nominate Participants from
the officers and key employees for such year. The Committee shall also
establish a target bonus for the year for each Participant expressed as
a percentage of base salary or specified portion of base salary.
Participants shall be notified of their selection and their target bonus
as soon as practicable.
Paragraph 5. Determination of Performance Objectives.
Within 60 days after the beginning of each year, the Committee shall
establish target, minimum, and maximum performance objectives for the
Company and for its major operating subsidiaries and shall determine the
manner in which the target bonus is allocated among the performance
objectives. The Committee shall also recommend a dollar maximum for
payments to Participants for any Plan year. The Board of Directors
shall take action concerning the recommended dollar maximum within 60
days after the beginning of the Plan year. Participants shall be
notified of the performance objectives as soon as practicable once such
objectives have been established.
Paragraph 6. Determination and Distribution of Awards. As
soon as practicable, but in no event more than 90 days after the close
of each year during which the Plan is in effect, the Committee shall
compute incentive awards for eligible participants in such amounts as
the members deem fair and equitable, giving consideration to the degree
to which the Participant's performance has contributed to the
performance of the Company and its affiliated companies and using the
target bonuses and performance objectives previously specified.
Aggregate awards calculated under the Plan shall not exceed the maximum
limits approved by the Board of Directors for the year involved. To be
eligible to receive a payment, the Participant must be actively employed
by the Company or an affiliate as of the date of distribution except as
provided in Paragraph 8.
Amounts shall be paid (less appropriate withholding taxes and
FICA deductions) according to the following schedule:
Award Distribution Schedule
Percent of
Award Date
Initial Award 75% As soon as possible after initial
award is (First Year of determined
Participation)
25 One year after initial award is
determined
100%
Subsequent Awards 50% As soon as possible after award is
determined
25 One year after award is determined
25 Two years after award is
determined
100%
Paragraph 7. Restricted Stock in Lieu of Cash. For 1992 and
subsequent years, participants who have a target bonus of $10,000 or
higher shall be paid all deferred portions of such bonus with restricted
shares of the Company's common stock under the Company's Long-Term Stock
Incentive Plan. Such stock shall be granted to the participant when the
initial award is determined, but shall vest free of restrictions
according to the schedule specified above in Paragraph 6.
Paragraph 8. Termination of Employment.
(a) In the event a Participant ceases to be an employee
during a year by reason of death, disability or approved retirement, an
award, if any, determined in accordance with Paragraph 6 for the year of
such event, shall be reduced to reflect partial participation by
multiplying the award by a fraction equal to the months of participation
during the applicable year through the date of termination rounded up to
whole months divided by 12.
For the purpose of this Plan, approved retirement shall mean
any termination of service on or after age 60, or, with approval of the
Board of Directors, early retirement under the Company's qualified
retirement plan. For the purpose of this Plan, disability shall mean
any termination of service that results in payments under the Company's
long-term disability plan.
The entire amount of any award that is determined after the
death of a Participant shall be paid in accordance with the terms of
Paragraph 11.
In the event of termination of employment due to disability
or approved retirement, a Participant shall be paid the undistributed
portion of any prior awards in his final paycheck or in accordance with
the terms of elections to voluntarily defer receipt of awards earned
prior to February 12, 1991, or deferred under the terms of the Company's
Deferred Compensation Plan. In the event of termination due to
disability or approved retirement, any shares of common stock previously
credited to a Participant shall be distributed free of restrictions
during the last month of employment. The current market value (defined
as the closing price for the stock on the New York Stock Exchange on the
date in question) of such shares shall be included in the Participant's
final paycheck. Such Participant shall be paid the full amount of any
award (adjusted for partial participation) declared subsequent to the
date of such termination within 30 days of the date of declaration. Any
partial payments shall be made in cash.
(b) In the event a Participant ceases to be an employee
during a year by reason of a change in control, he shall be entitled to
receive all amounts deferred by him prior to February 12, 1991, and all
undistributed portions for prior Plan years. He shall also be entitled
to an award for the year of such event as if he had been an employee
throughout such year. The entire amount of any award for such year
shall be paid in a lump sum within 60 days after the end of the year in
question. Such amounts shall be paid in cash.
A Change in Control of the Company shall be deemed to have
occurred if (i) any "Acquiring Person" (as such term is defined in the
Rights Agreement dated as of February 13, 1996, between the Company and
ChaseMellon Shareholder Services L.L.C. ("Rights Agreement")) is or
becomes the beneficial owner (as such term is used in Rule 13d-3 under
the Securities Exchange Act of 1934) of securities of the Company
representing 25 percent or more of the combined voting power of the
Company; or (ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, as of May 19, 1998, constitute the Company's Board of
Directors ("Board") and any new director (other than a director whose
initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company)
whose appointment or election by the Board or nomination for election by
the Company's stockholders was approved or recommended by a vote of at
least two-thirds of the directors then still in office who either were
directors on May 19, 1998, or whose appointment, election or nomination
for election was previously so approved or recommended; or (iii) the
Company's stockholders approve a merger or consolidation of the Company
or any direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation that would result in
the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) at least 60 percent of the
combined voting power of the securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or
consolidation, or a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
person is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25 percent or more of the
combined voting power of the Company's then outstanding securities; or
(iv) the Company's stockholders approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement for
the sale or disposition by the Company of all or substantially all of
the Company's assets, other than a sale or disposition by the Company of
all or substantially all of the Company's assets to an entity, at least
60 percent of the combined voting power of the voting securities of
which are owned by stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to such
sale. A Change in Control, however, shall not be considered to have
occurred until all conditions precedent to the transaction, including
but not limited to, all required regulatory approvals have been
obtained.
Paragraph 9. Interest on Previously Deferred Amounts.
Amounts voluntarily deferred prior to February 12, 1991, shall be
credited with interest from the date the payment was first available in
cash to the date of actual payment. Such interest shall be calculated
at a monthly rate using the typical rates paid by major banks on new
issues of negotiable Certificates of Deposit in the amounts of
$1,000,000 or more for one year as quoted in The Wall Street Journal on
the first day of the relevant calendar month or the next preceding
business day if the first day of the month is a non-business day.
Paragraph 10. Coordination with Deferred Compensation Plan.
Some Participants are entitled to defer the receipt of their cash
bonuses under the terms of the Company's Deferred Compensation Plan,
which became effective November 1, 1993. Any cash bonuses deferred
pursuant to the Deferred Compensation Plan shall be accounted for and
distributed according to the terms of such plan and the choices made by
the Participant.
Paragraph 11. Death and Beneficiary Designation. In the
event of the death of a Participant, any undistributed portions of prior
awards shall become payable. Amounts previously deferred by the
Participant, together with credited interest to the date of death, shall
also become payable. Each Participant shall designate a beneficiary to
receive any amounts that become payable after death under this Paragraph
or Paragraph 8. In the event that no valid beneficiary designation
exists at death, all amounts due shall be paid as a lump sum to the
estate of the Participant. Any shares of restricted stock previously
credited to the Participant shall be distributed to the Participant's
beneficiary or, in the absence of a valid beneficiary designation, to
the Participant's estate, at the same time any cash is paid.
Paragraph 12. Amendment of Plan. The Company's Board of
Directors, at any time, may amend, modify, suspend, or terminate the
Plan, but such action shall not affect the awards and the payment of
such awards for any prior years. The Company's Board of Directors
cannot terminate the Plan in any year in which a change of control has
occurred without the written consent of the Participants. The Plan
shall be deemed suspended for any year for which the Board of Directors
has not fixed a maximum dollar amount available for award.
Paragraph 13. Nonassignability. No right or interest of any
Participant under this Plan shall be assignable or transferable in whole
or in part, either directly or by operation of law or otherwise,
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy, or in any other manner, and no right or
interest of any Participant under the Plan shall be liable for, or
subject to, any obligation or liability of such Participant. Any
assignment, transfer, or other act in violation of this provision shall
be void.
Paragraph 14. Effective Date of the Plan. The Plan shall be
effective with respect to the fiscal year beginning January 1, 1984, and
shall remain in effect until it is suspended or terminated as provided
by Paragraph 12.