QUESTAR CORPORATION
ANNUAL MANAGEMENT INCENTIVE PLAN
(As amended and restated effective May 18, 1999)
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 determined
of 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, approved retirement, an
award, or a reduction in force, 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. A reduction in force, for the
purpose of this Plan, shall mean any involuntary termination of
employment due to the Company's economic condition, sale of assets,
shift in focus, or other reasons independent of the Participant's
performance.
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,
approved retirement, or a reduction in force, 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, approved retirement, or a
reduction in force, 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.