QUESTAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
(As Amended and Restated May 19, 1998)
Section 1. Purpose
The Questar Corporation Long-Term Stock Incentive Plan (the
"Plan") is designed to encourage officers and selected key employees
of and consultants to Questar Corporation and its affiliated companies
(the "Company") to acquire a proprietary interest in the Company, to
generate an increased incentive to contribute to the Company's future
growth and success, and to enhance the Company's ability to attract
and retain talented officers and employees. Accordingly, the Company,
during the term of this Plan, may grant incentive stock options,
nonqualified stock options, stock appreciation rights, restricted
stock, performance shares, and other awards valued in whole or in part
by reference to the Company's stock.
Section 2. Definitions
"Affiliate" shall mean any business entity in which the Company
directly or indirectly has an equity interest deemed significant by
the Company's Board of Directors.
"Approved Retirement" shall mean any retirement of service on or
after age 60 or, with approval of the Board, early retirement under
the Company's Retirement Plan.
"Award" shall mean a grant or award under Section 6 through 10,
inclusive, of the Plan, as evidenced in a written document delivered
to a Participant as provided in Section 12(b).
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" shall mean the Management Performance Committee of
the Board of Directors.
"Common Stock" or "Stock" shall mean the Common Stock, no par
value, of the Company. The term shall also include any Common Stock
Purchase Rights attached to the Common Stock.
"Company" shall mean Questar Corporation on a consolidated basis.
"Designated Beneficiary" shall mean the beneficiary designated by
the Participant, in a manner determined by the Committee, to receive
amounts due the Participant in the event of the Participant's death.
In the absence of an effective designation by the Participant,
Designated Beneficiary shall mean the Participant's estate.
"Disability" shall mean permanent and total disability within the
meaning of Section 105(d)(4) of the Code.
"Employee" shall mean any officer or key employee of or
consultant to the Employer.
"Employer" shall mean the Company and any Affiliate.
"Fair Market Value" shall mean the closing price of the Company's
Common Stock reported on the New York Stock Exchange on the date in
question, or, if the Common Stock shall not have been traded on such
date, the closing price on the next preceding day on which a sale
occurred.
"Family Member" shall mean the Participant's spouse, children,
grandchildren, parents, siblings, nieces and nephews.
"Fiscal Year" shall mean the fiscal year of the Company.
"Incentive Stock Option" shall mean a stock option granted under
Section 6 that is intended to meet the requirements of Section 422 of
the Code.
"Nonqualified Stock Option" shall mean a stock option granted
under Section 6 that is not intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Nonqualified
Stock Option.
"Participant" shall mean an Employee who is selected by the
Committee to receive an Award under the Plan.
"Payment Value" shall mean the dollar amount assigned to a
Performance Share which shall be equal to the Fair Market Value of the
Common Stock on the day of the Committee's determination under Section
8(c)(2) with respect to the applicable Performance Period.
"Performance Period" or "Period" shall mean the period of years
selected by the Committee during which the performance is measured for
the purpose of determining the extent to which an Award of Performance
Shares has been earned.
"Performance Goals" shall mean the objectives established by the
Committee for a Performance Period, for the purpose of determining the
extent to which Performance Shares that have been contingently awarded
for such Period are earned.
"Performance Share" shall mean an Award granted pursuant to
Section 8 of the Plan expressed as a share of Common Stock.
"Restricted Period" shall mean the period of years selected by
the Committee during which a grant of Restricted Stock or Restricted
Stock Units may be forfeited to the Company.
"Restricted Stock" shall mean shares of Common Stock contingently
granted to a Participant under Section 9 of the Plan.
"Restricted Stock Unit" shall mean a fixed or variable dollar
denominated unit contingently awarded under Section 9 of the Plan.
"Right" shall mean a Stock Appreciation Right granted under
Section 7.
"Stock Unit Award" shall mean an Award of Common Stock or units
granted under Section 10.
"Termination of Employment" shall mean the date on which a
Participant actually notifies his/her supervisor of his/her
resignation, in the case of a voluntary termination; and the date on
which the Company actually notifies the Participant of his/her
termination, in the case of an involuntary termination. This term, as
defined, does not include termination of employment as the result of
an Approved Retirement, Disability, or death.
Section 3. Administration
The Plan shall be administered by the Committee. The Committee
shall have sole and complete authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the operation
of the Plan, and to interpret the terms and provisions of the Plan.
The Committee's decisions shall be binding upon all persons, including
the Company, stockholders, an Employer, Employees, Participants and
Designated Beneficiaries.
Section 4. Eligibility
Awards may only be granted to officers and key employees of or
consultants to the Company or any Affiliate who have the capacity to
contribute to the success of the Company. When selecting Participants
and making Awards, the Committee may consider such factors as the
Employee's functions and responsibilities and the Employee's past,
present and future contributions to the Company's profitability and
growth.
Neither the members of the Committee nor any member of the Board
who is not an Employee of the Company shall be eligible to receive
awards.
Nothing contained in the Plan or in any individual agreement
pursuant to the terms of the Plan shall confer upon any Participant
any right to continue in the employment of the Company or to limit in
any respect the right of the Company to terminate the Participant's
employment at any time and for any reason.
Section 5. Maximum Amount Available for Awards and Maximum Award
The aggregate number of shares of Common Stock that may be issued
under Awards pursuant to this Plan on an annual basis shall not exceed
one percent (1%) of the issued and outstanding shares of Common Stock
as of the first day of each calendar year for which the Plan is in
effect. Any shares available in any year using this formula that are
not granted under this Plan or other plans in which stock is awarded
to Employees would be available for use in subsequent years. Shares
of Common Stock may be made available from the authorized but unissued
shares of the Company or from shares reacquired by the Company,
including shares purchased in the open market. In the event that an
Option or Right expires or is terminated unexercised as to any shares
of Common Stock covered thereby, or any Award in respect of shares is
forfeited for any reason under the Plan, such shares, to the extent
not precluded by applicable law or regulation, shall be again
available for Awards pursuant to the Plan.
In the event that the Committee shall determine that any stock
dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below fair market value
or other similar corporate event affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential
benefits intended to be made available under this Plan, then the
Committee, in its sole discretion, may take action. The Committee may
adjust any or all of the number and kind of shares that thereafter may
be awarded or optioned and sold or made the subject of Rights under
the Plan, the number and kind of shares subject to outstanding Options
and other Awards, and the grant, exercise or conversion price with
respect to any of the foregoing and/or, if deemed appropriate, make
provision for a cash payment to a Participant or a person who has an
outstanding Option or other Award.
There is a maximum of 100,000 shares that can be the subject of
Awards granted to any single Participant in any given fiscal year.
Section 6. Stock Options
(a) Grant. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the Employees to
whom Options shall be granted, the number of shares to be covered by
each Option, the option price therefor and the conditions and
limitations, applicable to the exercise of the Option. The Committee
shall have the authority to grant Incentive Stock Options,
Nonqualified Stock Options, or both types of Options. In the case of
Incentive Stock Options, the terms and conditions of such grants shall
be subject to and comply with such rules as may be prescribed by
Section 422 of the Code and any implementing regulations.
(b) Option Price. The Committee shall establish the option
price at the time each Option is granted, which price shall not be
less than 100 percent of the Fair Market Value of the Common Stock on
the date of grant.
(c) Exercise. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee, in its sole
discretion, may specify in the applicable Award or thereafter;
provided, however, that in no event may any Option granted hereunder
be exercisable earlier than six months after the date of such grant or
after the expiration of ten years from the date of such grant. The
Committee may impose such conditions with respect to the exercise of
Options, including without limitation, any conditions relating to the
application of federal or state securities laws, as it may deem
necessary or advisable.
No shares shall be delivered pursuant to any exercise of an
Option until payment in full of the option price is received by the
Company. Such payment may be made in cash, or its equivalent, or, if
and to the extent permitted by the Committee, by exchanging shares of
Common Stock owned by the optionee (which are not the subject of any
pledge or other security interest), or by a combination of the
foregoing, provided that the combined value of all cash and cash
equivalents and the Fair Market Value of any such Common Stock so
tendered to the Company, valued as of the date of such tender, is at
least equal to such option price.
(d) Transferability. Participants are allowed to transfer
vested Nonqualified Stock Options to Family Members or family trusts,
provided that such options were granted as of and after February 10,
1998 and provided that such transfers are made and transferred Options
are exercised in accordance with procedural rules adopted by the
Committee.
Section 7. Stock Appreciation Rights
(a) The Committee may, with sole and complete authority, grant
Rights in tandem with an Option. Rights shall not be exercisable
earlier than six months after grant, shall not be exercisable after
the expiration of ten years from the date of grant and shall have an
exercise price of not less than 100 percent of the Fair Market Value
of the Common Stock on the date of grant.
(b) A Right shall entitle the Participant to receive from the
Company an amount equal to the excess of the Fair Market Value of a
share of Common Stock on the exercise of the Right over the grant
price thereof. The Committee shall determine whether such Right shall
be settled in cash, shares of Common Stock or a combination of cash
and shares of Common Stock.
Section 8. Performance Shares
(a) The Committee shall have sole and complete authority to
determine the Employees who shall receive Performance Shares and the
number of such shares for each Performance Period and to determine the
duration of each Performance Period and the value of each Performance
Share. There may be more than one Performance Period in existence at
any one time, and the duration of Performance Periods may differ from
each other.
(b) Once the Committee decides to use Performance Shares, it
shall establish Performance Goals for each Period on the basis of
criteria selected by it. During any Period, the Committee may adjust
the Performance Goals for such Period as it deems equitable in
recognition of unusual or non-recurring events affecting the Company,
changes in applicable tax laws or accounting principles, or such other
factors as the Committee may determine.
(c) As soon as practicable after the end of a Performance
Period, the Committee shall determine the number of Performance Shares
that have been earned on the basis of performance in relation to the
established Performance Goals. Payment Values of earned Performance
Shares shall be distributed to the Participant or as soon as
practicable after the expiration of the Performance Period and the
Committee's determination. The Committee shall determine whether
Payment Values are to be distributed in the form of cash and/or shares
of Common Stock.
Section 9. Restricted Stock and Restricted Stock Units
(a) Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees to whom
shares of Restricted Stock and Restricted Stock Units shall be
granted, the number of shares of Restricted Stock and the number of
Restricted Stock Units to be granted to each Participant, the duration
of the Restricted Period during which and the conditions under which
the Restricted Stock and Restricted Stock Units may be forfeited to
the Company, and the other terms and conditions of such Awards.
(b) Shares of Restricted Stock and Restricted Stock Units may
not be sold, assigned, transferred, pledged or otherwise encumbered,
except as herein provided, during the Restricted Period. At the
expiration of the Restricted Period, the Company shall deliver such
certificates to the Participant or the Participant's legal
representative. Payment for Restricted Stock Units shall be made to
the Company in cash and/or shares of Common Stock, as determined at
the sole discretion of the Committee.
Section 10. Other Stock Based Awards
(a) In addition to granting Options, Rights, Performance Shares,
Restricted Stock, Restricted Stock Units, the Committee shall have
authority to grant Stock Unit Awards to Participants that can be in
the form of Common Stock or units, the value of which is based, in
whole or in part, on the value of Common Stock. Subject to the
provisions of the Plan, Stock Unit Awards shall be subject to such
terms, restrictions, conditions, vesting requirements and payment
rules as the Committee may determine in its sole and complete
discretion at the time of grant.
(b) Any shares of Common Stock that are part of a Stock Unit
Award may not be assigned, sold, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued or, if
later, the date provided by the Committee at the time of grant of the
Stock Unit Award.
Stock Unit Awards may provide for the payment of cash
consideration by the person to whom such Award is granted or provide
that the Award, and any Common Stock to be issued in connection
therewith, if applicable, shall be delivered without the payment of
cash consideration, provided that for any Common Stock to be purchased
in connection with a Stock Unit Award the purchase price shall be at
least 50 percent of the Fair Market Value of such Common Stock on the
date such Award is granted.
Stock Unit Awards may relate in whole or in part to certain
performance criteria established by the Committee at the time of
grant. Stock Unit Awards may provide for deferred payment schedules
and/or vesting over a specified period of employment. In such
circumstances as the Committee may deem advisable, the Committee may
waive or otherwise remove, in whole or in part, any restriction or
limitation to which a Stock Unit Award was made subject at the time of
grant.
(c) In the sole and complete discretion of the Committee, an
Award, whether made as a Stock Unit Award under this Section 10 or as
an Award granted pursuant to Sections 6 through 9, may provide the
Participant with dividends or dividend equivalents (payable on a
current or deferred basis) and cash payments in lieu of or in addition
to an Award.
Section 11. Termination of Employment
The following provisions define a Participant's status in the
event of termination of employment:
(a) Options and Rights. If a Participant shall cease to be
employed by the Company or an Affiliate either directly or in a
consulting role, any Option and any Right granted to him under the
Plan shall terminate in accordance with the following rules:
(1) A Participant who terminates employment for any reason
other than Approved Retirement, Disability or death shall lose the
right to exercise any Options or Rights as of Termination of
Employment. Any Options transferred to a Family Member or family
trust shall also be terminated as of the Participant's Termination of
Employment for any reason other than Approved Retirement, Disability,
or death.
(2) A Participant who terminates employment as a result of
an Approved Retirement shall have a period of time specified in the
individual agreements by which Options are granted to exercise such
Options or Rights.
(3) A Participant who is Disabled shall have 12 months
after Termination of Employment in which to exercise an Option or
Right.
(4) Upon the death of a Participant during employment, the
Participant's Designated Beneficiary shall have 12 months from the
date of death to exercise the Participant's Option or Right. Upon the
death of a Participant after an Approved Retirement but within the
period specified by the Committee to exercise Options or Rights after
the Participant's Approved Retirement, the Participant's Designated
Beneficiary shall have the period specified by the Committee to
exercise the Option or Right.
(5) The foregoing notwithstanding, a Participant or the
Participant's Designated Beneficiary shall not be permitted to
exercise an Option or Right after the expiration date.
(b) Restricted Stock. If a Participant terminates employment
before the end of the Restricted Period for a reason other than death,
Approved Retirement, Disability, or Change of Control, the Participant
shall forfeit all shares of Restricted Stock as of Termination of
Employment. If a Participant terminates employment as a result of
death, Approved Retirement, or Change of Control, the Committee, in
its sole discretion, shall determine what portion, if any, of the
Restricted Stock shall be freed from restrictions.
(c) Performance Shares and Other Awards. If a Participant
ceases to be an Employee before the end of any Performance Period as a
result of death, Approved Retirement, or Disability, the Committee may
authorize the payment to such Participant or his Designated
Beneficiary of a pro rata portion of the amount that would have been
paid to him had he continued as an Employee to the end of the
Performance Period. In the event a Participant terminates employment
for any other reason, any amounts for outstanding Performance Periods
shall be forfeited as of Termination of Employment.
Section 12. General Provisions
(a) Withholding. The Employer shall have the right to deduct
from all amounts paid to a Participant in cash any taxes required by
law to be withheld in respect of Awards under this Plan. In the case
of payments of Awards in the form of Common Stock, the Committee shall
require the Participant to pay to the Employer the amount of any taxes
required to be withheld with respect to such Common Stock, or, in lieu
thereof, the Employer shall have the right to retain (or the
Participant may be offered the opportunity to elect to tender) the
number of shares of Common Stock whose Fair Market Value equals the
amount required to be withheld.
(b) Awards. Each Award shall be evidenced in writing delivered
to the Participant and shall specify the terms and conditions and any
rules applicable to such Award.
(c) Nontransferability. Except as provided in Section 6(d), no
Award shall be assignable or transferable, and no right or interest of
any Participant shall be subject to any lien, obligation or liability
of the Participant, except by will or the laws of descent and
distribution.
(d) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have
any rights as a stockholder with respect to any shares of Common Stock
to be distributed under the Plan until becoming the holder.
Notwithstanding the foregoing, in connection with each grant of
Restricted Stock hereunder, the applicable Award shall specify if and
to what extent the Participant shall not be entitled to the rights of
a stockholder in respect of such Restricted Stock.
(e) Construction of the Plan. The validity, construction,
interpretation, administration and effect of the Plan and of its rules
and regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws of Utah.
(f) Effective Date. Subject to the approval of the stockholders
of the Company, the Plan shall be effective on March 1, 1991. No
Options or Awards may be granted under the Plan, however, until the
Plan is approved by the Company's shareholders or after May 20, 2001.
(g) Amendment of Plan. The Board of Directors may amend,
suspend or terminate the Plan or any portion thereof at any time,
provided that no amendment shall be made without stockholder approval
if such approval is necessary to comply with any tax or regulatory
requirement, including for these purposes any approval requirement
that is a prerequisite for exemptive relief under Section 16(b) of the
Securities Exchange Act of 1934.
(h) Amendment of Award. The Committee may amend, modify or
terminate any outstanding Award with the Participant's consent at any
time prior to payment or exercise in any manner not inconsistent with
the terms of the Plan, including without limitation, to change the
date or dates as of which an Option or Right becomes exercisable; a
Performance Share is deemed earned; Restricted Stock becomes
nonforfeitable; or to cancel and reissue an Award under such different
terms and conditions as it determines appropriate.
Section 13. Change of Control.
In the event of a Change of Control of the Company, all Options,
Restricted Stock, and other Awards granted under the Plan shall vest
immediately.
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 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.