Exhibit 10.6.
QUESTAR MARKET RESOURCES, INC.
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 Market Resources,
Inc. (the "Company") with an opportunity to defer compensation
paid to them for their services as Directors of the Company and
to maintain a Deferred Account Balance until they cease to
serve as Directors of the Company or its affiliates.
2. Eligibility.
Subject to the conditions specified in this Plan or otherwise
set by 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.
(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 Questar Corporation's common
stock ("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 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 he 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 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, 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 unless he is still
serving as a voting director of Questar Corporation
("Questar"). Upon retirement or resignation as a Director of
Questar or upon appointment as a non-voting Senior Director of
Questar, 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 unless he is currently
serving as a Director of the Company.
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 Questar, shall
be entitled to elect a distribution of his account balance
within 60 days following the date of a Change in Control. For
the purpose of this Plan, a "Change in Control" shall be deemed
to have occurred if (i) any "Acquiring Person" (as that term is
used in the Rights Agreement dated February 13, 1996, between
Questar 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 Questar representing 25 percent or more
of the combined voting power of Questar, or (ii) the following
individuals cease for any reason to constitute a majority of
the number of directors then serving as directors of Questar:
individuals who, as of May 19, 1998, constitute Questar'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 Questar) whose appointment of election by the
Board or nomination for election by Questar's stockholders was
approved or recommended by a vote of at least two-thirds of the
directors when still in office who either were directors on May
19, 1998, or who appointment, election or nomination for
election was previously so approved or recommended; or (iii
Questar stockholders approve a merger or consolidation of
Questar or any direct of indirect subsidiary of Questar with
any other corporation, other than a merger of consolidation
that would result in the voting securities of Questar
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 Questar 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 Questar (or similar
transaction) in which no person is or becomes the beneficial
owner, directly or indirectly, of securities of Questar
representing 25 percent or more of the combined voting power of
Questar's then outstanding securities; or (iv) Questar'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 Questar of all or substantially
all of Questar's assets, other than a sale of disposition by
Questar 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
Questar in substantially the same proportion as their ownership
of Questar 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 Company's Board of
Directors, 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 Board of Directors 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 was effective on June 1, 1982, and shall remain in
effect until it is discontinued by action of the Company's
Board of Directors. The effective date of the amendment to the
Plan establishing a Phantom Stock Option is January 1, 1983.
The Plan was amended and restated effective April 30, 1991, was
amended and restated effective February 13, 1996, and was
further amended and restated effective May 19, 1998.
