QUESTAR CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated effective June 1, 1998)
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 supplemental
retirement benefits to compensate them for the limitations imposed by
federal tax laws on benefits payable from 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 a Participant'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
Company's cost for any public or private employee benefit plan or any
income recognized by the Participant as a result of exercising stock
options. A Participant's Compensation for any Plan Year shall include
any 401(k) contributions made by the Participant under Questar
Corporation's Employee Investment Plan or other tax-qualified plan,
and any Compensation deferred under the Questar Corporation Deferred
Share Make-Up 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.
"Participant" means any officer or other highly compensated
manager of the Company and/or its affiliates who has a vested right to
receive benefits under the Company's Retirement Plan, and who has not
deferred any compensation pursuant to the Company's
Deferred Compensation Plan and Deferred Share Plan during the period
covered by his/her Final Average Earnings.
"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 Participant" refers to a Participant 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.
"Supplemental Retirement Benefits" means retirement benefits
payable to Retired Participant 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. The Company's
Equalization Benefit Plan was merged into the Plan effective May 19,
1998.
4. PARTICIPATION IN THE PLAN AND ELIGIBILITY FOR BENEFITS
Participation in the Plan shall be limited to Participants of the
Company and Participating Corporations. To become eligible for
Supplemental Retirement Benefits under the Plan, a Participant must
have a vested right to receive benefits under the Retirement Plan. A
Retired Participant cannot receive benefits under the Plan during any
period that his monthly benefits from the Retirement Plan are
suspended.
5. SUPPLEMENTAL RETIREMENT BENEFITS
A Participant 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 Participant is alive or so long as
his/her surviving spouse is entitled to receive monthly benefits under
the Retirement Plan. (The Retired Participant's surviving spouse must
have been married to the Participant at date of his/her retirement.)
The monthly Supplemental Retirement Benefit shall equal the
monthly benefit that would have been payable to or on behalf of a
Retired Participant 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 Participant had not
voluntarily chosen to defer any compensation under the terms of the
Questar Corporation Deferred Share Make-Up Plan, less the monthly
benefits payable from the Retirement Plan and the EIRP (if any).
Except as provided in Section 7, the monthly Supplemental
Retirement Benefit payable to or on behalf of the Retired Participant
as determined herein shall be paid in the same form as such Retired
Participant's benefits are payable under the Retirement Plan. Any
monthly Supplemental Retirement Benefits payable to the Retired
Participant's surviving spouse shall be reduced by the monthly
benefits payable to such surviving spouse under the Retirement Plan
and the EIRP (if any).
6. LUMP SUM ELECTION.
A Participant has a one-time election to receive the present
value of his Supplemental Retirement Benefit in a lump sum. The
Participant 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
(prior to the Participant's retirement). When making this election,
the Participant 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 Participant'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 Participant's retirement date or as soon thereafter as
is administratively practicable. If the Participant fails to make an
election at least one year prior to retirement, the Participant shall
receive monthly benefits.
Notwithstanding this provision, a Participant who has not been
advised that he may receive Supplemental Retirement Benefits and has
not received an opportunity to make a lump-sum election at least one
year prior to his retirement shall receive any Supplemental Retirement
Benefits in one lump-sum payment. The calculation of this benefit and
the payment of this benefit shall be made in accordance with the
provisions of this Section.
7. FUNDING
The 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.
8. ALLOCATION OF COSTS
The cost of Supplemental Retirement Benefits paid to or on behalf
of Retired Participants shall be allocated to and be the
responsibility of the Company and Participating Corporations.
9. 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.
10. AMENDMENT OR TERMINATION
The Board may at any time amend, modify, or terminate this Plan;
provided, however, that any Retired Participants or their surviving
spouses receiving 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 and
provided that any amendment, modification, or termination of the Plan
shall not adversely affect the right of any Participant to receive
benefits earned prior to such action.
11. 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 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.
12. CHANGE IN CONTROL AND LEGAL FEES
The Company shall pay all legal fees and expenses that a Retired
Participant or a Participant may reasonably incur as a result of the
Company's contesting the validity or enforceability of such
participant's right to receive benefits under the terms of this Plan
following a "Change in Control" of the Company.
In the event that a Change in Control of the Company occurs and a
Participant's employment with the Company or its successor(s)
terminates, the Participant shall receive a lump-sum payment of his
Supplemental Retirement Benefits within 30 days of the Participant's
termination. Such benefits shall be calculated as set forth in
Section 6.
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.) 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 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 (2/3) 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 any parent thereof 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.