QUESTAR CORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(As Amended and Restated May 19, 1998)
1. Purpose of Plan.
The purpose of the Deferred Compensation Plan for Directors
("Plan") is to provide Directors of Questar Corporation (the
"Company") with an opportunity to defer compensation paid to them
for their services as Directors.
2. Eligibility.
Subject to the conditions specified in this Plan or
otherwise set by the Executive Committee of the Company's Board
of Directors, all voting Directors of the Company who receive
compensation for their service as Directors are eligible to
participate in the Plan. Eligible Directors are referred to as
"Directors." Directors who elect to defer receipt of fees or who
have account balances are referred to as "Participants" in this
Plan.
3. Administration.
The Company's Board of Directors shall administer the Plan
and shall have full authority to make such rules and regulations
deemed necessary or desirable to administer the Plan and to
interpret its provisions.
4. Election to Defer Compensation.
(a) Time of Election. A Director can elect to defer future
compensation or to change the nature of his election for future
compensation by submitting a notice prior to the beginning of the
calendar year. A newly elected Director is entitled to make a
choice within five days of the date of his election or
appointment to serve as a Director to defer payment of
compensation for future service. An election shall continue in
effect until the termination of the Participant's service as a
Director or until the end of the calendar year during which the
Director serves written notice of the discontinuance of his
election.
All notices of election, change of election, or
discontinuance of election shall be made on forms prepared by the
Corporate Secretary and shall be dated, signed, and filed with
the Corporate Secretary. A notice of change of election or
discontinuance of election shall operate prospectively from the
beginning of the calendar year, but any compensation deferred
shall continue to be held and shall be paid in accordance with
the notice of election under which it was withheld.
(b) Amount of Deferral. A Participant may elect to defer
receipt of all or a specified portion of the compensation payable
to him for serving as a Director and attending Board and
Committee Meetings as a Director. For purposes of this Plan,
compensation does not include any funds paid to a Director to
reimburse him for expenses or any income recognized by him as a
result of exercising options under the Company's Stock Option
Plan for Directors.
(c) Period of Deferral. When making an election to defer
all or a specified percentage of his compensation, a Participant
shall elect to receive the deferred compensation in a lump sum
payment within 45 days following the end of his service as a
Director or in a number of annual installments (not to exceed
four), the first of which would be payable within 45 days
following the end of his service as a Director with each
subsequent payment payable one year thereafter. Under an
installment payout, the Participant's first installment shall be
equal to a fraction of the balance in his Deferred Compensation
Account as of the last day of the calendar month preceding such
payment, the numerator of which is one and the denominator of
which is the total number of installments selected. The amount
of each subsequent payment shall be a fraction of the balance in
the Participant's Account as of the last day of the calendar
month preceding each subsequent payment, the numerator of which
is one and the denominator of which is the total number of
installments elected minus the number of installments previously
paid. The term "balance," as used herein, refers to the amount
credited to a Participant's Account or to the Fair Market Value
(as defined in Section 5 (a)) of the Phantom Shares of the
Company's Common Stock credited to his Account.
(d) Phantom Stock Option and Certificates of Deposit
Option. When making an election to defer all or a specified
percentage of his compensation, a Participant shall choose
between two methods of determining earnings on the deferred
compensation. He may choose to have such earnings calculated as
if the deferred compensation had been invested in the Company's
Common Stock at the Fair Market Value (as defined in Section 5
(a)) of such stock as of the date such compensation amount would
have otherwise been payable to him ("Phantom Stock Option") or
may choose to have earnings calculated as if the deferred
compensation had been invested in negotiable certificates of
deposit at the time such compensation would otherwise be payable
to him ("Certificates of Deposit Option").
The Participant must choose between the two options for all
of the compensation he elects to defer in any given year. He may
change the option for future compensation by filing the
appropriate notice with the Corporate Secretary before the first
day of each calendar year, but such change shall not affect the
method of determining earnings for any compensation deferred in a
prior year.
5. Deferred Compensation Account.
A Deferred Compensation Account ("Account") shall be
established for each Participant.
(a) Phantom Stock Option Account. If a Participant elects
the Phantom Stock Option, his Account will include the number of
shares and partial shares of the Company's Common Stock (to four
decimals) that could have been purchased on the date such
compensation would have otherwise been payable to him. The
purchase price for such stock is the Fair Market Value of such
stock, i.e., the closing price of such stock as reported on the
Composite Tape of the New York Stock Exchange for such date or
the next preceding day on which sales took place if no sales
occurred on the actual payable date.
The Participant's Account shall also include the dividends
that would have become payable during the deferral period if
actual purchases of Common Stock had been made, with such
dividends treated as if invested in Common Stock as of the
payable date for such dividends.
(b) Certificates of Deposit Option Account. If a
Participant elects the Certificates of Deposit Option, his
Account will be credited with any compensation deferred by the
Participant at the time such compensation would otherwise be
payable and with interest calculated at a monthly rate using the
typical rates paid by major banks on new issues of negotiable
Certificates of Deposit on amounts of $1,000,000 or more for one
year as quoted in The Wall Street Journal under "Money Rates" 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. The interest credited to each Account shall be
based on the amount held in the Account at the beginning of each
particular month.
6. Statement of Deferred Compensation Account.
Within 45 days after the end of the calendar year, a
statement will be sent to each Participant listing the balance in
his Account as of the end of the year.
7. Retirement
Upon retirement or resignation as a Director from the Board
of Directors or upon appointment as a non-voting Senior Director,
a Participant shall receive payment of the balance in his Account
in accordance with the terms of his prior instructions and the
terms of the Plan. Upon appointment as a non-voting Senior
Director of the Company, a Participant shall also receive payment
of account balances under any other Deferred Compensation Plans
maintained by the Company's affiliates unless the Participant
serves as a Director of the affiliate maintaining the account
balance.
8. Payment of Deferred Compensation.
(a) Phantom Stock Option. The amount payable to the
Participant choosing the Phantom Stock Option shall be the cash
equivalent of the stock using the Fair Market Value of such stock
on the date of withdrawal.
(b) Certificates of Deposit Option. The amount payable to
the Participant choosing the Certificate of Deposit Option shall
include the interest on all sums credited to the Account, with
such interest credited to the date of withdrawal.
(c) The date of withdrawal for both the Phantom Stock
Option Account and the Certificates of Deposit Option Account
shall be the last day of the calendar month preceding payment or
if payment is made because of death, the date of death.
(d) The payment shall be made in the manner (lump sum or
installment) chosen by the Participant. In the event of a
Participant's death, payment shall be made within 45 days of the
Participant's death to the beneficiary designated by the
Participant or, in the absence of such designation, to the
Participant's estate.
9. Payment, Change in Control
Notwithstanding any other provisions of this Plan or
deferral elections made pursuant to Section 4 of this Plan, a
Director, in the event of a Change in Control of the Company,
shall be entitled to elect a distribtuion of his account balance
within 60 days following the date of a Change in Control.
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.
10. Hardship Withdrawal.
Upon petition to and approval by the Executive Committee, a
Participant may withdraw all or a portion of the balance in his
Account in the case of financial hardship in the nature of an
emergency, provided that the amount of such withdrawal cannot
exceed the amount reasonable necessary to meet the financial
hardship. The Executive Committee shall have sole discretion to
determine the circumstances under which such withdrawals are
permitted.
11. Amendment and Termination of Plan
The Plan may be amended, modified or terminated by the
Company's Board of Directors. No amendment, modification, or
termination shall adversely affect a Participant's rights with
respect to amounts accrued in his Account. In the event that the
Plan is terminated, the Board of Directors has the right to make
lump-sum payments of all Account balances on such date as it may
determine.
12. Nonassignability of Plan.
The right of a Participant to receive any unpaid portion of
his Account shall not be assigned, transferred, pledged or
encumbered or be subject in any manner to alienation or
attachment.
13. No Creation of Rights.
Nothing in this Plan shall confer upon any Participant the
right to continue as a Director. The right of a Participant to
receive any unpaid portion of his Account shall be an unsecured
claim against the general assets and will be subordinated to the
general obligations of the Company.
14. Effective Date.
The Plan shall become effective on October 15, 1984, and
shall remain in effect until it is discontinued by action of the
Company's Board of Directors. The Plan was amended and restated
effective May 1, 1991, was amended and restated effective
February 13, 1996, and was further amended and restated effective
May 19, 1998.