(Logo)
QUESTAR CORPORATION
180 East First South Street
P. O. Box 11150
Salt Lake City, Utah 84147
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 17, 1994
The Annual Meeting of Stockholders of Questar Corporation, a
Utah corporation (the "Company"), will be held at the office of
the Company, 180 East First South Street, Salt Lake City, Utah,
on Tuesday, May 17, 1994, at 10:00 a.m., local time, for the
following purposes:
1. To elect four directors to hold office for three
years; and
2. To transact such other business as may properly
come before the meeting.
Stockholders of record as of March 21, 1994, are entitled to
receive notice of and to vote at the Annual Meeting.
By Order of the
Board of Directors
/s/ Connie C. Holbrook
Connie C. Holbrook
Vice President and Secretary
Salt Lake City, Utah
April 4, 1994
YOUR VOTE IS IMPORTANT.
It is important that as many shares as possible be
represented at the Annual Meeting. Please date, sign, and
promptly return the proxy in the enclosed envelope (which
requires no postage if mailed within the United States). Your
proxy may be revoked by you at any time before it has been voted.
<PAGE>
QUESTAR CORPORATION
PROXY STATEMENT
May 17, 1994
This Proxy Statement is being furnished to stockholders of
Questar Corporation, a Utah corporation, in connection with the
solicitation of proxies by the Board of Directors of the Company
for use at the Annual Meeting of Stockholders to be held on
Tuesday, May 17, 1994, at 10:00 a.m., local time, and any
adjournment or adjournments of such meeting. At the Annual
Meeting, holders of common stock will elect four directors of the
Company, each for a three-year term.
Record Date; Vote Required
Only stockholders of record at the close of business on
March 21, 1994, will be entitled to notice of and to vote at the
Annual Meeting. At such date, 40,242,195 shares of common stock
were outstanding. Each share of common stock will be entitled to
one vote on each matter coming before the meeting. In order to
elect the four directors, the affirmative vote of the holders of
a plurality of the shares of common stock present and entitled to
vote at the Annual Meeting, provided a quorum is present, is
required. The Company's Bylaws provide that votes "withheld"
from director nominees will not be counted for purposes of
determining whether such individuals receive a plurality of
votes. Shares registered in the names of brokers or other
"street name" nominees for which proxies are voted for some but
not all matters (broker nonvotes) will be considered to be voted
only as to those matters actually voted.
Proxies and Solicitation
Shares of common stock represented by properly executed
proxies received at or prior to the Annual Meeting will be voted
in accordance with specified instructions. If no instructions
are indicated, proxies representing shares of common stock will
be voted for the Board of Directors' nominees for director.
Execution of a proxy will not prevent a stockholder from
attending the Annual Meeting and voting in person. Any
stockholder giving a proxy may revoke it at any time before it is
voted by delivering to the Secretary of the Company written
notice of revocation bearing a later date than the proxy, by
delivering a later-dated proxy, or by voting in person at the
Annual Meeting. Attendance at the Annual Meeting, in and of
itself, will not constitute revocation of a proxy.
This solicitation is made on behalf of the Board of
Directors, and all expenses of this solicitation will be paid by
the Company. In addition to solicitation of proxies by use of
mail, the directors, officers, and regular employees of the
Company may solicit proxies personally or by telephone or
telegraph. Such persons will receive no additional compensation
for such services. The Company has requested that brokerage
houses, and other custodians, nominees, and fiduciaries forward
solicitation materials to the beneficial owners of shares of
common stock held of record by such persons. The Company will
reimburse such brokers and other fiduciaries for their reasonable
out-of-pocket expenses incurred in connection with such request.
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation provide for
a board of 13 directors, divided into three classes,
approximately equal in number, elected to serve three-year terms.
The Board of Directors of the Company has selected U. Edwin
Garrison, W. Whitley Hawkins, Robert E. Kadlec, and Harris H.
Simmons as the nominees for whom shares of common stock
represented by the enclosed proxy will be voted, unless otherwise
specified on the proxy. All of the nominees currently serve as
directors of the Company.
The Board of Directors has no reason to believe that any
nominee will be unwilling or unable to serve as a director.
However, in the event that any nominee is unwilling or unable to
serve as a director, the proxy holders named in the enclosed
proxy may vote, in their discretion, for any other person. The
directors elected at the Annual Meeting will serve three-year
terms.
Information concerning the nominees for election as
directors and the current directors of the Company whose terms
will continue after the Annual Meeting is set forth below.
Unless otherwise indicated, the nominees have been engaged in the
same principal occupation for the past five years. Ages are
correct as of the date of the Proxy Statement.
Nominees
[Picture] Mr. U. Edwin Garrison is Chairman of Thiokol
Corporation, a position he has held since July
of 1991. He also served as Chief Executive
Officer of Thiokol from July of 1991 to July of
1993, as President of Thiokol from July of 1989
to July of 1992, and as Corporate Group Vice
President of Morton Thiokol prior to July of
1989. Mr. Garrison, age 66, has served as a
director of the Company since 1991 and is also a
director of Thiokol Corporation and First
Security Corporation. He is the beneficial
owner of 7,855 shares of the Company's common
stock.
[Picture] Mr. W. Whitley Hawkins is the owner of a
consulting firm, Hawkins Bricker International,
that owns Pride Products, Inc., a manufacturer
of chemical coating products. He was formerly
President and Chief Operating Officer of Delta
Air Lines from May of 1991 to March of 1993. He
also served Delta Air Lines as Executive Vice
President, Marketing and Stations, August 1990
to May 1991; and as Senior Vice President,
Marketing, May 1985 to August 1990. Mr.
Hawkins, age 62, has served as a director of the
Company since 1991 and also serves as an
advisory director of Delta Air Lines, as a
director of Trust Company Bank and Trust Company
of Georgia and Fleet Mortgage Group, Inc. He is
the beneficial owner of 3,720 shares of the
Company's common stock.
[Picture] Mr. Robert E. Kadlec is President and Chief
Executive Officer of BC Gas Inc. (Vancouver,
British Columbia). Mr. Kadlec, age 60, has been
a director of the Company since 1987 and is also
a director of BC Gas Inc., Trans Mountain Pipe
Line Company Ltd., Bank of Montreal, and British
Pacific Properties Ltd. He is the beneficial
owner of 14,450 shares of the Company's common
stock.
[Picture] Mr. Harris H. Simmons has been the President
and Chief Executive Officer of Zions First
National Bank and Zions Bancorporation since May
of 1990. He has served as President of Zions
Bancorporation since April of 1986 and is also a
director of Zions Bancorporation. He is the son
of Roy W. Simmons, a senior director of the
Company who was a director of the Company from
1968 to 1992. Mr. Simmons, age 39, has served
as a director since November 1, 1992, when he
was appointed to fill a vacancy. He is the
beneficial owner of 800 shares of the Company's
common stock.
Continuing Directors (Present Term Expires in 1995)
[Picture] Mr. R. D. Cash has served as the Company's
President and Chief Executive Officer since May
of 1984 and as the Company's Chairman of the
Board since May of 1985. Mr. Cash, age 51, has
been a director of the Company since 1977 and
also serves as a director of Zions First
National Bank and Zions Bancorporation and as a
trustee of Southern Utah University. He is the
beneficial holder of 162,576 shares of the
Company's common stock.
[Picture] Mr. James A. Harmon is Chairman and Chief
Executive Officer of Wertheim Schroder & Co.
Incorporated (investment bankers). Mr. Harmon,
age 58, has been a director of the Company since
1976 and also serves as a director of Schroder
plc, The Rank Organization, the United Way of
New York City, the New York City Partnership
(principal vehicle for private sector activities
to improve New York City's economic and social
health), and as a trustee of Brown University.
He is the beneficial holder of 24,864 shares of
the Company's common stock.
[Picture] Mr. William N. Jones is Chairman of the
Board, Lite Touch, Inc. (residential lighting
systems). He is also serving as President of a
regional missionary training center in Mexico
City, Mexico for the Church of Jesus Christ of
Latter-day Saints. Mr. Jones, age 67, has been
a director of the Company since 1981. He is a
trustee (on leave) of Intermountain Health Care,
Inc. He is the beneficial holder of 8,718
shares of the Company's common stock.
[Picture] Mr. Neal A. Maxwell is a member of the
Council of the Twelve for the Church of Jesus
Christ of Latter-day Saints. Mr. Maxwell, age
67, has been a director of the Company since
1968 and also serves as a director of Deseret
News Publishing Company and as a trustee of
Brigham Young University. He is the beneficial
holder of 12,448 shares of the Company's common
stock.
[Picture] Mr. Gary G. Michael is Chairman and Chief
Executive Officer of Albertson's, Inc. and has
served in this position since February 1, 1991.
He served as Vice Chairman of the Board and as
Chief Financial and Corporate Development
Officer of Albertson's from 1984 to January 31,
1992. Mr. Michael, age 53, was appointed to
serve as a director of the Company effective
February 1, 1994 to fill a vacancy on the Board.
He is a director of Albertson's and a member of
the Board of Directors of the Federal Reserve
Bank of San Francisco. Mr. Michael is the
beneficial holder of 500 shares of the Company's
common stock.
Continuing Directors (Present Term Expires in 1996)
[Picture] Mr. Robert H. Bischoff served as Chairman of
the Board, Key Bank of Utah until December 31,
1993. He is age 72 and has served as a director
of the Company since 1982 and is also a director
of Deseret News Publishing Company and Town &
Country Life Insurance Company and a trustee of
Intermountain Health Care, Inc. (through April
1994). Mr. Bischoff has reached the mandatory
retirement age and is obligated to resign from
his position prior to the Annual Meeting. It is
anticipated that he will be appointed to serve
as a senior, non-voting director of the Company.
Mr. Bischoff is the beneficial holder of 12,056
shares of the Company's common stock.
[Picture] Mr. Dixie L. Leavitt is the founder and
Chairman of the Board, Leavitt Group Agency
Association (a group of approximately 42
separate insurance agencies located in four
western states). Mr. Leavitt, age 64, is also
President and Chairman of entities engaged in
dairy, cattle, agriculture, and real estate
operations in Utah and southern Nevada. He has
been a director of the Company since 1987 and
also serves as a director of Zions First
National Bank. Mr. Leavitt is the beneficial
holder of 14,887 shares of the Company's common
stock.
[Picture] Mrs. Mary Mead is a rancher in Jackson,
Wyoming. Mrs. Mead, age 58, has served as a
director of the Company since 1990 and also
serves as a director of Jackson State Bank. She
is the beneficial holder of 9,300 shares of the
Company's common stock.
[Picture] Mr. D. N. Rose is President and Chief
Executive Officer of Mountain Fuel Supply
Company (a subsidiary of the Company engaged in
retail natural gas distribution). He has served
in this position and as a director of the
Company since 1984. Mr. Rose, age 49, is also a
trustee of Westminster College and a director of
Key Bank of Utah. He is the beneficial holder
of 47,493 shares of the Company's common stock.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Board Committees
The Board of Directors is responsible for the Company's
overall affairs. To assist with this responsibility, the Board
has established several committees.
The Board of Directors has an Executive Committee that is
vested with the authority to act as the Board of Directors in
managing the affairs of the Company. James A. Harmon serves as
the Chairman of this Committee; other members include Robert H.
Bischoff, R. D. Cash, William N. Jones, and Neal A. Maxwell. The
Executive Committee did not hold any meetings during 1993.
The Finance and Audit Committee of the Board of Directors is
currently chaired by Neal A. Maxwell. Other members of this
Committee include Robert H. Bischoff, U. Edwin Garrison, James A.
Harmon, William N. Jones, Mary Mead, and Harris H. Simmons.
During fiscal year 1993, the Finance and Audit Committee held
three meetings, at which time the members reviewed financial
statements, conferred with the Company's internal auditors and
representatives of the external auditors concerning their
respective examinations of the Company, recommended the retention
of Ernst & Young after a formal selection procedure, and reviewed
reports prepared for the Board of Directors.
The Company's Board of Directors also has a Management
Performance Committee with Robert E. Kadlec serving as the
current Chairman. Other members of this Committee include Robert
H. Bischoff, U. Edwin Garrison, James A. Harmon, W. Whitley
Hawkins, and Dixie L. Leavitt. During 1993, the Committee held
three meetings. The Committee reviews the salary and
compensation arrangements paid the Company's officers and makes
recommendations to the Board of Directors concerning such
arrangements, administers the Stock Option Plan and the Long-Term
Stock Incentive Plan, and makes recommendations about the
employees chosen to participate in the Annual Management
Incentive Plans adopted by the Company and its major operating
subsidiaries and about the performance objectives and awards made
under such plans. (This Committee functions as the "Compensation
Committee.") A report from this Committee concerning executive
compensation is set forth later in this document.
The Company has a Nominating Committee consisting of R. D.
Cash (Chairman), Robert H. Bischoff, Robert E. Kadlec, and Dixie
L. Leavitt. This Committee was organized to select individuals
for nomination as directors. The Nominating Committee held one
meeting in 1993. Although the Nominating Committee will consider
responsible recommendations by stockholders concerning nominees,
it has not established any formal procedures for considering
nominees recommended by stockholders. The Company's Bylaws do
specify procedures to follow if shareholders want to nominate
candidates for election as directors at an annual meeting.
Attendance at Board and Committee Meetings
The Company's Board of Directors held four regular meetings
and one special meeting during 1993; Board Committees held a
total of seven meetings. With the exception of Mr. Harmon, all
of the directors attended at least 75 percent of the aggregate of
the meetings of the Board and of the meetings of the Committees
on which they serve. Mr. Harmon attended 8 of 11 or 73 percent
of Board and Committee meetings. He missed three meetings as a
result of prior business and political commitments. The overall
attendance at Board and Committee meetings was 94 percent.
Directors' Compensation
Messrs. Cash and Rose do not receive any remuneration for
service as directors of the Company. They do, however, receive
fees for service as directors of the Company's affiliates. All
other directors are paid an annual fee of $10,800, payable in 12
monthly installments. They also receive fees of $700 for each
Board meeting attended. With the exception of Mr. Cash, the
Chairman of each Board Committee receives a fee of $600 for
meetings of the Committee chaired by him. Other directors
receive a fee of $500 for each Committee meeting attended.
The Company and its major affiliated companies each have a
Deferred Compensation Plan for Directors, under which directors
can elect to defer all or any portion of the fees received for
service as directors until their retirement from such service and
can choose to have the deferred amounts earn interest as if
invested in long-term certificates of deposit or be accounted for
with "phantom shares" of the Company's common stock. (The term
phantom stock refers to accounting entries that parallel the
value of the Company's common stock. Directors choosing the
phantom stock option are credited with the same number of shares
and fractional shares that could have been purchased using the
closing price of the Company's common stock on the date such fees
would have been payable. The account balances are also credited
with "shares" purchased with reinvested "dividends." Upon
retirement, directors receive the cash equivalent of these
phantom shares.) During 1993, several directors of the Company
and its affiliates chose to defer receipt of the compensation
earned by them for their service.
The directors, other than Messrs. Cash and Rose, are also
eligible to participate in the Stock Option Plan for Directors
(Directors' Plan), which was approved by the Company's
stockholders in May of 1987 and amended with shareholder approval
effective March 1, 1991. Under the terms of this
nondiscretionary plan, nonemployee voting directors receive
nonqualified stock options at the first regular meeting of the
Board of Directors held each year to purchase shares of the
Company's common stock using the closing price of such stock on
the date of grant as the exercise price. The number of shares
covered by the options granted to directors is specified in the
plan. Optionees, under the terms of the Directors' Plan, can use
cash or other shares of the Company's common stock (valued at the
closing price of such stock on the exercise date) as
consideration.
On February 8, 1994, 11 nonemployee voting directors of the
Company received nonqualified stock options to purchase a total
of 32,600 shares of the Company's common stock at an exercise
price of $31.50 per share. Each eligible director, with the
exception of Messrs. Harmon, Kadlec, and Maxwell, received a
nonqualified stock option to purchase 2,800 shares. Messrs.
Harmon, Kadlec, and Maxwell each received options to purchase
3,400 shares reflecting their added responsibilities as Chairmen
of Board Committees. (These options will not begin to vest until
August 8, 1994; consequently, the shares covered by the options
are not included in the shares reported for the directors.)
The Company has entered into individual indemnification
agreements with all directors, including Messrs. Cash and Rose,
indemnifying them as directors. The form of these agreements was
approved by the Company's stockholders at the 1988 Annual
Meeting.
Directors' Retirement Policy
In May of 1992, the Board of Directors adopted a new
retirement policy that permits an outside director to continue
serving in such position until the annual meeting following his
72nd birthday if he is actively engaged in business, financial,
and community affairs. With the exception of the Company's Chief
Executive Officer, any inside director is expected to resign as a
director on or before the date of his retirement as an employee.
The former Chief Executive Officer may serve out the remainder of
his term once he retires as an active employee.
Certain Relationships and Related Transactions
Mr. Bischoff serves as a member and Mr. Jones is on leave as
a member of the Board of Trustees of Intermountain Health Care,
Inc. (IHC), a nonprofit corporation that provides health care
services in the Company's areas of operation. The Company offers
two health maintenance organizations and a preferred provider
organization through IHC as options available to employees under
the Company's health plan. In 1993, the Company and its
subsidiaries paid IHC a total sum of $329,541 in administrative
fees.
Mr. Kadlec is the President and Chief Executive Officer of
BC Gas Inc. The Company and BC Gas, through subsidiaries, are
each one-third owners of FuelMaker Corporation, a Canadian
corporation that manufacturers and markets small natural gas
compressors for use with natural gas vehicles. BC Gas also has
several gas supply contracts with Universal Resources Corporation
(a subsidiary of the Company) to purchase gas during portions of
the 1993-94 winter heating season and also has a long-term
contract with Questar Pipeline Company (another subsidiary of the
Company) for storage service.
Compensation Committee Interlocks and Insider Participation
Mr. Cash serves as a director of Zions Bancorporation and
Zions First National Bank. He served as a member of Zions'
Executive Compensation Committee until June of 1993. Mr. Simmons
is an executive officer of Zions Bancorporation. He does not
serve as a member of the Company's Management Performance
Committee.
Mr. Harmon is Chairman and Chief Executive Officer of
Wertheim Schroder & Co. Incorporated, an investment banking firm
that has served the Company and its affiliates as an underwriter
and agent in the past and is expected to serve the Company in
such capacities in the future. He is a member of the Management
Performance Committee. Other members of the Management
Performance Committee include Messrs. Bischoff, Garrison,
Hawkins, Kadlec, and Leavitt.
EXECUTIVE COMPENSATION
The following Summary Compensation Table lists annual and
long-term compensation earned by Mr. Cash and the other four most
highly compensated officers during 1991, 1992, and 1993.
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Long-Term
Compensation Compensation
Restricted
Base Stock All Other
Name and Principal Salary Bonus Awards Options Compensation
Position Year ($) ($)1 ($)2 (#) ($)3
<S> <C> <C> <C> <C> <C> <C>
R. D. Cash 1993 363,533 172,947 89,271 30,000 43,099
Chairman, President and 1992 347,900 156,191 83,478 30,000 38,493
Chief Executive Officer 1991 331,300 129,527 - 18,000 33,670
D. N. Rose 1993 200,417 68,048 38,525 19,000 18,786
President and Chief 1992 190,833 56,279 31,358 19,000 17,002
Executive Officer 1991 180,700 56,440 - 12,000 14,955
Mountain Fuel Supply
Company
C. M. Heiner 1993 199,833 74,318 40,604 19,000 18,983
Senior Vice President 1992 190,417 57,886 31,560 17,000 16,786
1991 180,700 52,779 - 12,000 14,607
A. J. Marushack 1993 191,217 61,182 31,847 19,000 18,164
President and Chief 1992 180,583 58,055 28,875 18,000 16,130
Executive Officer 1991 170,167 51,597 - 12,000 14,382
Questar Pipeline Company
G. L. Nordloh 1993 161,500 67,424 43,313 20,000 18,065
President and Chief 1992 158,500 63,444 49,203 19,000 14,994
Executive Officer 1991 152,367 39,721 12,756 12,000 11,387
Celsius Energy Company,
Universal Resources
Corporation and
Wexpro Company
</TABLE>
1 Amounts listed under this heading for 1993 include cash
payments made in 1993 under the 1990 and 1991 Annual Management
Incentive Plans (AMIPs), cash payments made in 1994 for the 1993
AMIPs and cash payments made in 1994 for the 1993 general
employee compensation plans adopted by Celsius Energy
Company/Universal Resources Corporation and Wexpro Company (E&P
Plans). The amounts listed for earlier years include similar
items.
2 Amounts under this heading include the value (as of the
grant date) of any shares of restricted stock used in 1993 and
1994, in lieu of cash, as partial payment of bonuses earned under
the 1992 and 1993 AMIPs and the value of any shares of restricted
stock granted in connection with the 1991, 1992, and 1993 E&P
Plans. All shares of restricted stock vest in two annual equal
installments with the first installment occurring on the first
anniversary of the grant date. Dividends are paid on the
restricted shares at the same rate dividends are paid on other
outstanding shares of the Company's common stock. As of December
31, 1993, Messrs. Cash, Rose, Heiner, Marushack, and Nordloh
owned 2,891, 1,086, 1,093, 1,000, and 2,029 shares of restricted
stock, respectively.
3 Amounts listed under this heading include employer
matching and non-matching contributions to the Employee Stock
Purchase Plan, matching "contributions" to the Deferred Share
Plan, and directors' fees. The figures opposite Mr. Cash's name
include $12,228 in contributions to the Employee Stock Purchase
Plan for 1993, $10,499 for 1992, and $10,000 for 1991. They also
include directors' fees amounting to $15,600 for 1993, $16,000
for 1992, and $13,500 for 1991 and matching contributions to the
Deferred Share Plan of $15,271 for 1993, $11,994 for 1992, and
$10,170 for 1991. The figures opposite Mr. Rose's name include
$12,228 in contributions to the Employee Stock Purchase Plan for
1993, $10,499 for 1992, and $10,000 for 1991. They also include
directors' fees amounting to $5,200 for 1993, $5,600 for 1992,
and $4,600 for 1991 and matching contributions to the Deferred
Share Plan of $1,358 for 1993, $903 for 1992 and $355 for 1991.
The figures opposite Mr. Heiner's name include $12,228 in
contributions to the Employee Stock Purchase Plan for 1993,
$10,499 for 1992, and $10,000 for 1991. They also include
directors; fees of $5,200 for 1993, $5,200 for 1992, and $4,350
for 1991 and matching contributions to the Deferred Share Plan of
$1,555 for 1993, $1,087 for 1992, and $257 for 1991. The figures
opposite Mr. Marushack's name include $12,228 in contributions to
the Employee Stock Purchase Plan for 1993, $10,499 for 1992, and
$10,000 for 1991. They also include directors' fees of $5,200
for 1993, $5,200 for 1993, $5,200 for 1992, and $4,350 for 1991
and matching contributions to the Deferred Share Plan of $736 for
1993, $431 for 1992, and $32 for 1991. The figures opposite Mr.
Nordloh's name include $11,845 in contributions to the Employee
Stock Purchase Plan for 1993, $9,794 for 1992, and $8,537 for
1991. They also include directors' fees of $5,200 for 1993,
$5,200 for 1992, and $2,850 for 1991 and matching contributions
to the Deferred Share Plan of $1,020 for 1993.
The following table lists information concerning the
nonqualified stock options that were granted to Messrs. Cash,
Rose, Heiner, Marushack, and Nordloh during 1993 under the
Company's Long-Term Stock Incentive Plan. No stock appreciation
rights (SARs) were granted during 1993.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
% of Total
Options Granted
Options to Employees Exercise or
Granted in Last Base Price Expiration Grant Date
Name (#) 1 Fiscal Year ($/Share) Date Value ($) 2
<S> <C> <C> <C> <C> <C>
R. D. Cash 30,000 7.8 28.875 2/9/2003 125,700
D. N. Rose 19,000 4.9 28.875 2/9/2003 79,610
C. M. Heiner 19,000 4.9 28.875 2/9/2003 79,610
A. J. Marushack 19,000 4.9 28.875 2/9/2003 79,610
G. L. Nordloh 20,000 5.2 28.875 2/9/2003 83,800
</TABLE>
1 These nonqualified stock options vest in four annual,
equal installments, with the first installment exercisable as of
August 8, 1993. Participants can use cash or previously-owned
shares as consideration for option shares. Participants can also
elect to use newly-acquired shares to satisfy the minimum tax
withholding obligation or previously-owned shares to satisfy
either the minimum tax withholding obligation or maximum tax
payment obligation. Options expire when a participant terminates
his employment, unless termination is caused by an approved
retirement, death, or disability. Options can be exercised for
three months following a participant's approved retirement and 12
months following a participant's death or disability.
2 When calculating the present value of options granted in
1993, the Company used the Black-Scholes option pricing model.
The Company assumed a volatility of .179, a risk free interest
rate of 6.26 percent, a dividend yield of 5.00 percent and
assumed that the shares would be exercised evenly throughout the
four-year vesting schedule. The real value of the options in
this table depends upon the actual performance of the Company's
stock during the applicable period.
The following table lists information concerning the
nonqualified stock options that were exercised by Messrs. Cash,
Rose, Heiner, Marushack, and Nordloh during 1993 and the total
options and their value held by each at year-end 1993.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
Shares Number of Unexercised Value of Unexercised In-
Acquired or Value Options/SAR's at Year-End the-Money Options/SARs
Exercised Realized 1 (#) 2 at Year-End ($)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
R. D. Cash 30,883 552,630 16,873 37,500 156,301 293,438
D. N. Rose 28,853 412,551 12,700 23,750 125,925 185,844
C. M. Heiner 30,620 531,913 0 22,750 0 172,469
A. J. Marushack 12,000 165,750 25,750 23,250 323,719 179,156
G. L. Nordloh 9,818 126,724 0 24,500 0 188,938
</TABLE>
1 The "value" is calculated by subtracting the fair market
value of the shares purchased on the date of exercise minus the
option price. The value is equal to the amount of ordinary
income recognized by each officer. The current value of the
shares may be higher or lower than the aggregate value reported
in the table.
2 At year end 1993, there were no outstanding stock
appreciation rights (SARs), which have not been granted since
February of 1989.
Retirement Plans
The Company maintains a noncontributory retirement plan that
is funded actuarially and does not involve specific contributions
for any one individual. The following table lists the estimated
annual benefits payable on a straight line annuity basis under
the Company's Retirement Plan as of December 31, 1993, and, if
necessary, the Company's Supplemental Executive Retirement Plan
(the SERP). The benefits shown are based on earnings and years
of service for an employee reaching normal retirement age of 65
in 1993 and do not include Social Security benefits. Benefits
under the Retirement Plan are not reduced or offset by Social
Security benefits.
<TABLE>
<CAPTION>
Pension Plan Table
Highest Consecutive Years of Service
Three-Year Average
Annual Compensation 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$125,000 $ 33,718 $ 44,957 $ 56,196 $ 59,321 $ 62,446
150,000 40,843 54,457 68,071 71,821 75,571
175,000 47,968 63,957 79,946 84,321 88,696
200,000 55,093 73,457 91,821 96,821 101,821
225,000 62,218 82,957 103,696 109,321 114,946
250,000 69,343 92,457 115,571 121,821 128,071
300,000 83,593 111,457 139,321 146,821 154,321
400,000 112,093 149,457 186,821 196,821 206,821
450,000 126,343 168,457 210,571 221,821 233,071
500,000 140,593 187,457 234,321 246,821 259,321
</TABLE>
The Company's Retirement Plan has a "step rate/excess"
benefit formula. The formula provides for a basic benefit that
is calculated by multiplying the employee's final average
earnings by a specified basic benefit factor and by subsequently
multiplying such sum by the employee's years of service (to a
maximum of 25). This basic benefit is increased for each year of
service in excess of 25 and is reduced for retirement prior to
age 62. Employees also receive a supplemental benefit, under the
Retirement Plan, calculated by multiplying the difference between
the employee's final average earnings and his "covered
compensation" by a supplemental factor that varies by age. (The
term "covered compensation" refers to the 35-year average Social
Security wage base tied to year of an employee's birth.)
Employees who retire prior to age 62 also receive a temporary
supplement that is tied to years of service until they are
eligible to receive Social Security benefits at age 62.
The "final average earnings" (the average annual earnings of
the three highest paid consecutive years of service) for purposes
of calculating retirement benefits for the executive officers
named above is as follows: for Mr. Cash, $492,967; for Mr. Rose,
$247,024; for Mr. Heiner, $249,205; for Mr. Marushack, $237,563;
and for Mr. Nordloh, $216,831. These executive officers all
participate in the Company's Executive Incentive Retirement Plan
(the EIRP), described below, and may receive supplemental monthly
payments after retirement in accordance with such plan. The
years of credited service for the individuals listed in the
Summary Compensation Table are 18 years for Mr. Cash, 25 years
for Mr. Rose, 23 years for Mr. Heiner, 36 years for Mr.
Marushack, and 10 years for Mr. Nordloh.
The Company and its affiliates adopted the EIRP for officers
in 1979. Under this nonqualified plan, a participant will
receive monthly payments upon retirement equal to 10 percent of
the highest average monthly base salary paid to the officer
during any period of 36 consecutive months of employment. The
plan also provides for a family benefit in the event of an
officer's death. Messrs. Cash, Rose, Heiner, and Marushack have
satisfied the 15 years of service required and have a vested
right to receive benefits. Mr. Nordloh has been nominated to
participate in the plan, but has not satisfied the years of
service requirement. Based on current compensation, the annual
benefits payable to the named officers under this plan are as
follows: Mr. Cash, $34,758; Mr. Rose, $19,065; Mr. Heiner,
$19,032; and Mr. Marushack, $18,066.
Any benefits payable under the SERP are offset against
payments for the EIRP. Consequently, an officer would not
receive any benefits from the SERP unless his benefit under the
EIRP was less than the difference between what he could be paid
under the Company's Retirement Plan at the date of his retirement
and what he would have earned under such plan absent federal tax
limitations. Given this relationship between the two
nonqualified plans and the new annual compensation cap of
$150,000 applicable to the Retirement Plan as of January 1, 1994,
the amounts listed in the table above do not include benefits
payable under the EIRP.
Executive Severance Compensation Plan
The Company has an Executive Severance Compensation Plan
that covers the Company's executive officers and all other
officers of the Company and its affiliated companies. Under this
plan, participants, following a change in control of the Company,
are eligible to receive compensation equal to up to two years'
salary and miscellaneous benefits upon a voluntary or involuntary
termination of their employment, provided that they have
continued working or have been agreeable to continue working for
six months following a potential change in control of the
Company. This plan was adopted in 1983 by Mountain Fuel, was
assumed by the Company as of October 2, 1984, and was amended and
restated effective January 1, 1986. The amended plan also
contains a provision that limits compensation and benefits
payable under the plan to amounts that can be deducted under
Section 280G of the Internal Revenue Code of 1986.
The dollar amounts payable to the Company's executive
officers (based on current salaries paid by the Company and its
affiliates) in the event of a change in control of the Company
are as follows: $760,000 to Mr. Cash; $422,000 to Mr. Rose;
$421,000 to Mr. Heiner; $406,000 to Mr. Marushack; and $330,200
to Mr. Nordloh. The Company's executive officers would also
receive certain supplemental retirement benefits, welfare plan
benefits, and cash bonuses.
Under the plan, a "change in control" is defined to include
any change in control required to be reported under Item 6(e) of
Schedule A of Regulation 14A of the Securities Exchange Act of
1934, as amended. A change in control is deemed to occur once
any person becomes the beneficial owner, directly or indirectly,
of securities representing 20 percent or more of the Company's
outstanding shares of common stock.
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following graph compares the cumulative total return of
the Company's common stock with the cumulative total returns of a
peer group index of diversified natural gas companies prepared
and published by Value Line, Inc., and of the S&P Composite-500
Stock Index.
[The graph has three lines connecting the points in the following
table.]
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
Questar $100.00 $125.60 $125.18 $155.26 $199.39 $259.14
S&P 500 $100.00 $131.49 $127.32 $166.21 $179.30 $197.23
Peer Group $100.00 $143.56 $119.80 $112.94 $133.94 $161.01
</TABLE>
1 Assumes $100 invested at the close of trading on December
31, 1988 in the Company's common stock, the index of peer
companies, and the S&P 500 Index. Also assumes the dividends are
reinvested.
2 For 1993, the Company had a total return of 29.9 percent
compared to a total return of 10.0 percent for the S&P 500 Index
and a total return of 20.2 percent for the peer group index.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Management Performance Committee (the "Committee") is a
Committee of outside directors that is chaired by Robert E.
Kadlec. Other members include Robert H. Bischoff, U. Edwin
Garrison, James A. Harmon, W. Whitley Hawkins, and Dixie L.
Leavitt. This Committee is responsible for reviewing and
approving all elements of the total compensation program for
officers of the Company and its affiliates and serves as the
administrator of the Company's Stock Option Plan and Long-Term
Stock Incentive Plan. The Committee is also responsible for
monitoring the Company's executive compensation programs to
verify that they are aligned with the Company's business
strategies and financial goals. The Company believes that such
programs motivate the Company's officers to acquire and retain
appropriate levels of stock ownership and are competitive with
programs offered by the Company's peers. It is the Committee's
opinion that the total compensation earned by the Company's
officers in 1993 achieves these objectives and is fair and
reasonable.
Each year, the Committee reviews the performance of the
Company on a consolidated basis and the performance of the
Company's major lines of business and compares such performance
to specified groups of peer companies. The Committee was pleased
with the Company's exceptional performance in 1993. The Company
exceeded the budget performance objectives for net income and
return on equity that were approved by the Committee in February
of 1993. The Company's operating and financial success was
reflected in its stock price, which closed at $33.00 on December
31, 1993. As is shown on the performance graph, the Company
achieved a total shareholder return of 29.9 percent in 1993.
The Committee also assesses the individual performance of
officers, particularly the performance of R. D. Cash and the
Senior Vice Presidents (a group that includes W. F. Edwards, as
the Company's Senior Vice President and Chief Financial Officer,
in addition to the officers listed in the Summary Compensation
Table). The Committee periodically directs outside consultants
to perform an in-depth audit and analysis of the total
compensation paid to the Company's officers. The most recent
audit was reviewed in early 1992. Another audit will be
conducted in late 1994. The Committee also reviews executive
compensation surveys, including an annual survey on executive
compensation sponsored by the American Gas Association (AGA) and
several compensation surveys published by consulting firms.
The data compiled by the AGA is segregated by type of
participating companies (distribution, transmission, diversified,
and combination) and by revenue size. The data is "blind";
individual companies participating in the survey are identified,
but are not identified by reference to specific survey data. The
survey data includes information on base salaries, incentive
compensation, stock options, and perquisites. Mr. Cash's total
compensation is compared with the compensation earned by his
counterparts in integrated natural gas companies. Mr. Rose's
compensation is compared with the compensation earned by his
counterparts in local distribution companies, while Mr.
Marushack's compensation is compared with the compensation earned
by his counterparts in interstate pipeline companies. Mr. Heiner
serves in a number of capacities with the Company, including the
President and Chief Executive Officer of the Company's data
processing affiliate. Consequently, it is difficult to obtain
comparable survey information for him. The majority of Mr.
Nordloh's base salary is frozen under a five-year special
incentive program that will end with 1994. His total
compensation is compared to the total compensation reported for
his counterparts in independent exploration and production
companies, which is obtained through a survey.
The Company's total compensation program for officers
includes base salaries, annual bonuses, and stock options. The
total program is designed to attract, motivate, reward and retain
the broad-based management talent required to achieve corporate
objectives and increase shareholder value. Each of these aspects
of the total program is discussed in greater detail below.
Base Salaries
Base salaries for the Company's officers, including those
named in the Summary Compensation Table, are reviewed on an
annual basis. Such salaries are generally pegged at or near the
50th percentile of survey data, particularly the data compiled by
the AGA. Merit increases are generally based on merit
compensation programs in place for the employees of the various
business units. The merit increases awarded to Mr. Cash and
other officers are based on an assessment of each officer's
individual performance, years of experience, and comparison with
survey data and were in line with, or below, the overall merit
budget guidelines adopted for other employees.
On March 1, 1993, Mr Cash received an overall merit increase
of 4.2 percent (from $351,200 to $366,000) on his base salary
after the Committee determined that Mr. Cash's base salary was
below the 50th percentile of AGA survey data. The Board of
Directors approved an overall merit increase of 3.8 percent for
Mr. Cash effective March 1, 1994. This 1994 merit increase
increased his annual base salary from $366,000 to $380,000, but
his base salary remains below the 50th percentile.
Annual Bonuses
All of the Company's officers, but particularly the five
highest paid officers, have a significant portion of their total
compensation at risk. The Company and its affiliates adopted an
annual incentive compensation plan in 1982 and have consistently
used the framework of this plan for the past ten years. The
Committee reviews and approves minimum (85 percent), target (100
percent), and maximum (125 percent) performance levels for each
specified performance objective. Factors are assigned to these
performance objectives and the resulting factors are multiplied
to obtain an overall factor which, in turn, is multiplied against
the target bonus. A participant cannot earn more than 141
percent of his target bonus or 50 percent of his base salary.
Annual bonuses are directly linked to the key financial and
operating objectives for the major business units and for the
Company on a consolidated basis.
The Committee, at a meeting held in February of 1993,
approved 1993 performance objectives for the Company and each
major business unit. The performance results for the Company, on
a consolidated basis, were specified net income and return on
equity goals, which were equally weighted. The performance
results for each major business unit included at least one
financial goal, i.e., net income or net income and return on
equity, and at least one operating efficiency goal. The
performance objectives for Mountain Fuel Supply Company, in
addition to net income and return on equity, included a customer
service rating, a productivity standard (year end customers per
average full-time employee) and a sales measurement (temperature
adjusted non-gas revenues). The performance objectives for
Questar Pipeline Company, in addition to net income and return on
equity, included an operating efficiency standard of net revenue
divided by net operating and maintenance costs. The performance
objectives for the Company's exploration and production units
included net income, return on equity, and five-year average
finding costs.
The Committee also approved target bonuses for each officer.
As a general rule, the Committee compares target bonus
information with survey data. Mr. Cash's target bonus for 1993
was set at 40 percent of his base salary; the 1993 target bonus
for each of the remaining highest compensated officers was set at
30 percent of his base salary. A portion of Mr. Cash's target
bonus was allocated to the performance of each major business
unit. The target bonuses for Messrs. Rose, Marushack, and
Nordloh were evenly split between the performance goals for their
respective business units and consolidated performance. All of
Mr. Heiner's target bonus was tied to consolidated results.
In 1993, the Company, on a consolidated basis, exceeded the
maximum performance objectives, i.e., an earnings for common
figure of $80 million and a return on equity figure of 13.90
percent. Consequently, the Company's officers received a maximum
payment on their target bonuses allocated to consolidated
results. Mountain Fuel exceeded its target net income and return
on equity goals, exceeded its maximum operating efficiency goal,
achieved its minimum customer service rating percentage and
achieved its target non-gas revenue number. The overall payout
factor for Mountain Fuel was 1.26. Messrs. Cash and Rose earned
bonuses equal to 126 percent of their target bonuses allocated to
Mountain Fuel's 1993 performance objectives. Questar Pipeline
exceeded its target net income goal and satisfied its minimum
return on equity goal and operating efficiency goals. Messrs.
Cash and Marushack earned a bonus equal to 92 percent of their
target bonuses allocated to Questar Pipeline's 1993 performance
objectives. Wexpro exceeded its target performance objectives
for net income and return on equity. Messrs Cash and Nordloh
earned bonuses equal to 131 percent of their target bonuses
allocated to Wexpro's 1993 performance objectives. Finally,
Celsius and Universal Resources exceeded their combined target
net income goal and their combined minimum five-year average
finding cost goal. Messrs. Cash and Nordloh earned bonuses equal
to 109 percent of their target bonuses allocated to these
objectives.
Mr. Cash earned a bonus of $178,545 for the performance of
the Company and its affiliates under the Company's 1993 Annual
Management Incentive Plan, or 127 percent of his target bonus of
$140,500. Of this amount, $89,274 was paid in cash; the
remainder of the bonus was paid in 2,834 shares of the Company's
restricted stock that will vest in equal annual installments in
February of 1995 and February of 1996. (During the restricted
period, Mr. Cash will receive dividends on these shares; the
dividends will be treated as additional compensation.) He also
earned two cash bonuses of $4,625 and $6,000 for his
participation in two separate general employee compensation plans
adopted by the Company's exploration and production affiliates in
which Mr. Cash participates. He is eligible to receive up to 25
percent of his frozen salary ($48,500) if the Company's E&P
affiliates achieve specified performance objectives. (The 1993
bonus figure listed for Mr. Cash in the Summary Compensation
Table includes the cash bonus payments identified above as well
as deferred bonus payments earned for performance in 1990 and
1991 that were paid in 1993. The value of the restricted shares
granted to him in 1994 is listed under the restricted stock
column.)
All of the Company's officers listed on the table earned
more than 100 percent of their target bonuses based on 1993
performance. The bonuses earned by the other named officers were
also split in approximately equal amounts between cash and
restricted shares of stock that will vest in two equal annual
installments. (The 1993 bonus figures for these officers include
the same type of information reported for Mr. Cash.)
In February of 1994, the Committee approved annual
performance objectives for the Company, on a consolidated basis,
and each of its major business units. The Committee generally
used the same categories for 1994 performance measurements as
were used in 1993, but made some changes to align the categories
of performance objectives between the bonus plans for officers
and the bonus plans for employees. The 1994 performance
objectives were set after the Committee reviewed actual results
for 1993 and budget numbers for 1994.
The Committee used net income and return on equity goals for
the Company on a consolidated basis, but added another
performance objective of controlling operating and maintenance
costs. Mountain Fuel's 1994 performance categories include net
income, return on equity, service rating, and customers per
employee ratio. Questar Pipeline's 1994 operating efficiency
category was changed to modified net operating income divided by
employees. Its 1994 financial performance categories include net
income and return on equity. Wexpro's 1994 performance
categories are again net income and return on equity. The
performance categories for the combined operations of Celsius and
Universal Resources include a new financial category, return on
equity, in addition to net income and five-year average finding
cost.
The Committee set Mr. Cash's 1994 target bonus at 40 percent
of his base salary in effect at the time, or $146,400. A portion
of his target bonus was again allocated to the performance of
each major business unit. The 1994 target bonuses for Messrs.
Rose, Heiner, Marushack, and Nordloh were set at 30 percent of
each officer's base salary. Again, the target bonuses for
Messrs. Rose, Marushack, and Nordloh were evenly allocated
between the performance goals for their respective business units
and consolidated performance, while Mr. Heiner's target bonus was
completely allocated to consolidated results.
Stock Options
Annual grants of stock options are awarded to the Company's
officers and key employees as part of their "risk-based"
compensation. The Committee considers the recommendations made
by the Company's senior officers for participants other than Mr.
Cash but independently determines Mr. Cash's stock option. As a
general rule, the Committee uses the prior year's grant as the
basis for determining each subsequent year's grant, but does
increase the size of grants when participants are promoted to new
positions or achieve noteworthy accomplishments. Mr. Nordloh,
for example, has received larger option grants than the Company's
other Senior Vice Presidents to recognize his role in the
significant achievements of the Company's exploration and
production operations and the impact of these successful
operations on the Company's consolidated results and stock price.
These grants are awarded pursuant to the terms of an omnibus
Long-Term Stock Incentive Plan, which allows the Committee broad
flexibility to use stock-based performance awards.
The Committee historically has granted nonqualified stock
options, but determined to use incentive stock options in 1994
because the differential between capital gains and ordinary
income had increased and because the tax advantages associated
with nonqualified stock options for the Company were minimized,
as a result of the Company's inability to use all of its tax
credits.
Stock options, from the Committee's perspective, focus
attention on managing the Company from a long-term investor's
perspective and encourage officers to have a significant,
personal investment in the Company through stock ownership.
Stock options awarded to officers and key employees become
valuable only as the Company's performance is reflected in
increased stock prices. Stock options constitute the Company's
only long-term incentive compensation program. Officers are
encouraged to retain their stock for long-term investment, rather
than sell option shares after purchasing them.
According to the Company's information, Mr. Cash, with
101,872 shares (excluding options, shares controlled for his son,
and shares held by two nonprofit foundations for which Mr. Cash
has voting power), is the largest individual shareholder of
record. As a group, the Company's five highest paid officers
actually own 264,259 shares of stock and have vested options to
purchase 55,323 shares of stock.
As the President and Chief Executive Officer, Mr. Cash has
consistently received the largest stock option grant.
Information concerning the stock options granted to Mr. Cash and
the other four named officers in 1993 is included in the table
labeled "Option/SAR Grants in Last Fiscal Year." The table
labeled "Aggregated Option/SAR Exercises" provides information
concerning the value realized by the individual members of the
group when exercising stock options in 1993 and the year-end
value of their remaining stock options.
In February of 1994, Mr. Cash received a grant to purchase
30,000 shares of the Company's stock at a fair market price of
$31.50 per share. The number of shares subject to Mr. Cash's
1994 option is equal to the number of shares subject to his 1992
and 1993 options. With the exception of Mr. Nordloh's stock
option, which was increased from 20,000 to 22,000 shares, the
1994 options granted to the other named officers were equal to
their 1993 stock options. The 1994 stock options vest in four
equal installments with the first installment vesting as of
August 8, 1994 and have a ten-year term.
The Company's compensation program also includes qualified
and nonqualified plans to provide retirement benefits. The
Committee believes that officers should be kept "whole" with
respect to qualified plans that contain restrictions that
penalize them from the benefit of full participation.
Consequently, the Company has two nonqualified plans, the
Supplemental Executive Retirement Plan and the Deferred Share
Plan, that provide benefits to the highest compensated employees
"equal" to those lost as a result of restrictions in the
Company's qualified plans -- the Retirement Plan and the Employee
Investment Plan.
During 1993, the Company's Board of Directors, acting upon a
recommendation made by the Committee, adopted a Deferred
Compensation Plan that permits all officers to defer the receipt
of up to 50 percent of their annual compensation and to have such
deferred compensation accounted for with phantom shares of the
Company's common stock or at a rate equal to a 10-year Treasury
note plus 100 basis points. This Plan was adopted to remain
competitive with other employers of similar size and scope.
The Committee supports the Company's historic philosophy
that officers are not fundamentally different than employees but
are paid more due to the nature of their responsibilities and the
greater demands on their time. Consequently, the Committee
supports the Company's traditional practice of limiting
perquisites to officers. Company officers do not have first
class travel privileges, cars, country club memberships,
supplemental welfare benefit plans, executive dining room, or
personal use of the Company's airplane.
Management Performance Committee
Robert E. Kadlec, Chairman
Robert H. Bischoff
U. Edwin Garrison
James A. Harmon
W. Whitley Hawkins
Dixie L. Leavitt
SECURITY OWNERSHIP, DIRECTORS AND EXECUTIVE OFFICERS
The following table lists the shares of stock beneficially
owned by each of the directors, by each of the other named
executive officers, and by all directors and executive officers
as a group as of March 1, 1994.
<TABLE>
<CAPTION>
Percent of
Name Number of Shares Outstanding Shares
<S> <C> <C>
Robert H. Bischoff 1 12,056 2
R. D. Cash 3,4,5,6,7 162,576 .40%
U. E. Garrison 7,855 2
James A. Harmon 1,8 24,864 2
W. Whitley Hawkins 1 3,720 2
C. M. Heiner 4,6 45,520 .11%
William N. Jones 8 8,718 2
Robert E. Kadlec 1 14,450 2
Dixie L. Leavitt 1,7 14,887 2
A. J. Marushack 4,5,6,7 80,268 .20%
Neal A. Maxwell 1,7 11,048 2
Mary Mead 9,300 2
Gary G. Michael 1 500 2
G. L. Nordloh 4,6,7 27,553 2
D. N. Rose 4,5,6 47,493 .12%
Harris H. Simmons 1 800 2
All directors, senior
directors, and
executive officers
(22 individuals) 9 668,831 1.66%
</TABLE>
1 Messrs. Bischoff, Harmon, Hawkins, Kadlec, Leavitt,
Maxwell, and Simmons have vested nonqualified stock options
granted under the terms of the Directors' Plan to purchase shares
of common stock as follows: Mr. Bischoff, 5,200 shares; Mr.
Harmon, 850 shares; Mr. Hawkins, 3,500 shares; Mr. Kadlec, 12,650
shares; Mr. Leavitt, 9,100 shares; Mr. Maxwell, 9,850 shares; and
Mr. Simmons, 700 shares. Mr. Michael was granted an option to
purchase 2,800 shares in February of 1994, but no portion of this
option has vested. Mr. Bischoff will forfeit any options that he
has not exercised as of the date of his retirement.
2 Unless otherwise listed, the percentage of shares owned is
less than .1%. The percentages of beneficial ownership have been
calculated in accordance with Rule 13d-3(d)(1) under the
Securities Exchange Act.
3 Mr. Cash is the Chairman of the Board of Trustees of the
Questar Corporation Educational Foundation and the Questar
Corporation Arts Foundation, two nonprofit corporations that own
an aggregate of 39,282 shares of the Company's common stock. As
the Chairman, Mr. Cash has voting power for such shares, but
disclaims any beneficial ownership of the shares.
4 The Company's executive officers have shares held for
their accounts in the Company's Employee Investment Plan. The
number of shares opposite each of their names includes shares of
stock through such plan as of December 31, 1993 as follows: Mr.
Cash, 26,718 shares; Mr. Rose, 13,990 shares; Mr. Heiner, 17,855
shares; Mr. Marushack, 26,507 shares; and Mr. Nordloh, 6,163
shares.
5 The Company's executive officers have options granted them
under the terms of the Company's Stock Option Plan and Long-Term
Stock Incentive Plan. The number of shares opposite each of
their names includes the number of shares each has vested options
to acquire within 60 days after March 1, 1994 as follows: Mr.
Cash, 16,873 shares; Mr. Rose, 12,700 shares; and Mr. Marushack,
25,750 shares.
6 The Company's executive officers acquired restricted
shares of the Company's common stock in partial payment of
bonuses earned under the 1992 and 1993 Annual Management
Incentive Plans. Mr. Nordloh also acquired restricted shares of
the Company's common stock under employee compensation plans
adopted by Celsius Energy Company/Universal Resources Corporation
and Wexpro Company. The number of shares opposite each of their
names includes the following shares of restricted stock
beneficially owned as of March 1, 1994: Mr. Cash, 4,279 shares;
Mr. Rose, 1,766 shares; Mr. Heiner, 1,835 shares; Mr. Marushack,
1,511 shares; and Mr. Nordloh, 2,227 shares. The officers
receive dividends on such shares and have voting powers for such
shares, but cannot dispose of them until they vest.
7 Of the total shares reported for Mr. Cash, 3,270 are owned
jointly with his wife and 4,549 are controlled by him as
custodian for his son. Messrs. Leavitt, Marushack, Maxwell, and
Nordloh own their shares of record jointly with their respective
wives.
8 Mr. Harmon's wife owns 2,000 shares of common stock. Mr.
Harmon disclaims any beneficial interest in these shares. Mr.
Jones' wife owns 90 shares of the Company's common stock; Mr.
Jones disclaims any beneficial interest in the shares owned by
his wife.
9 The total number of shares reported for this group
includes vested options to purchase 165,594 shares of stock.
SECURITY OWNERSHIP, PRINCIPAL HOLDERS
The following table sets forth information, as of December
31, 1993, with respect to each person known or believed by the
Company to be the beneficial owner of five percent or more of its
common stock:
Shares and
Name and Nature of
Address of Beneficial Percent
Beneficial Owner Ownership of Class
First Security Bank of
Utah N.A. 4,169,225 10.38
79 South Main Street Trustee for
Salt Lake City, Utah 84111 Company Employee
Benefit Plans
and Bank 1
The Equitable Companies
Incorporated 2,493,225 2 6.21
787 Seventh Avenue
New York, New York 10019
1 Of this total, First Security beneficially owns 4,077,906
shares in its role as trustee of employee benefit plans sponsored
by the Company or a subsidiary of the Company. Participating
employees control the voting of 4,071,927 shares.
2 On an initial Schedule 13G dated as of December 31, 1993,
and filed on behalf of a group, The Equitable Companies
Incorporated reported sole voting power for 2,337,225 shares,
shared voting power for 117,700 shares, and sole dispositive
power for 2,493,225 shares.
INDEPENDENT AUDITORS
The firm of Ernst & Young, independent auditors, has audited
the accounts of the Company for a number of years, including 1993
and are expected to continue doing so. Representatives of Ernst
& Young are expected to be present at the Annual Meeting, will
have an opportunity to make a statement if they desire, and will
be able to respond to questions.
STOCKHOLDER PROPOSALS
The Company must receive proposals from stockholders on or
before December 5, 1994, in order to have such proposals
evaluated for inclusion in the proxy materials relating to the
Company's 1995 Annual Meeting of Stockholders, which is scheduled
to be held on May 16, 1995. Any proposal submitted for the proxy
materials will be subject to the rules of the Securities and
Exchange Commission concerning stockholder proposals.
ANNUAL REPORT AND FORM 10-K REPORT
An annual report for the year ending December 31, 1993,
containing financial and other information about the Company, has
been recently mailed to all stockholders of record.
The Company will send, without charge, a copy of its 1993
Annual Report on Form 10-K (excluding exhibits), as filed with
the Securities and Exchange Commission, to any stockholder upon
written request. Requests should be sent to Connie C. Holbrook,
Vice President and Corporate Secretary, 180 East First South,
Salt Lake City, Utah 84111.
SECTION 16(a) COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of
1934 and regulations promulgated by the Securities and Exchange
Commission, the Company's directors, certain officers, and
persons that own more than 10 percent of the Company's stock, are
required to file reports of ownership and changes in ownership
with the Commission and the New York Stock Exchange and to
furnish the Company with copies of all such reports they file.
Based solely on its review of copies of such reports
received or written representations for certain reporting
persons, the Company believes that, with one exception, all
filing requirements were satisfied. Mr. Neal A. Maxwell, a
director of the Company, inadvertently made a late filing to
report a sale of shares that occurred in August of 1993. His
Form 4 was received by the Securities and Exchange Commission
four days after it was due.
OTHER MATTERS
The directors and officers of the Company know of no other
matters that are likely to be brought before the meeting. If any
other business requiring a vote of the stockholders should
properly come before the meeting or any adjournment or
adjournments thereof, the persons named in the enclosed proxy
intend to vote in accordance with their best judgment.
Pursuant to the Company's Bylaws, business must be properly
brought before an annual meeting in order to be considered by
stockholders. The Bylaws specify the procedure for stockholders
to follow in order to bring business before an annual meeting. A
stockholder who wants to nominate a person for election as a
director must deliver a written notice, by certified mail, to the
Company's Secretary. Such notice must be received not less than
50 days nor more than 90 days prior to the date of the meeting.
The notice must set forth (1) the name, address, and stock
ownership of the person making the nominations; (2) the name,
age, business address, residential address, and principal
occupation or employment of each nominee; (3) the number of
shares of the Company's stock owned by each nominee; (4) a
description of all arrangements and understandings between the
stockholder and nominee pursuant to which the nomination is made;
and (5) such other information concerning the nominee as would be
required, under the rules of the Securities and Exchange
Commission, in a proxy statement soliciting proxies for the
election of the nominee. The notice must also include the signed
consent of the nominee to serve as a director if elected.
The Company's Bylaws also require that any stockholder who
is entitled to vote at the annual meeting and who wants to submit
a proposal at such meeting without having it considered through
the proxy materials, must deliver a written notice of the
proposal, by certified mail, to the Company's Secretary. Such
notice must be received not less than 50 days nor more than 90
days prior to the date of such meeting. The notice must set
forth (1) a brief description of the proposal; (2) the
stockholder's name, address, and stock ownership; and (3) any
material interest of the stockholder in the proposal. A copy of
the Company's Bylaws specifying the requirements will be
furnished to any stockholder upon written request to the
Secretary.
By Order of the
Board of Directors
/s/ Connie C. Holbrook
Connie C. Holbrook
Vice President and Secretary
<PAGE>
FORM OF PROXY
QUESTAR CORPORATION
180 East First South
P.O. Box 11150
Salt Lake City, Utah 84147
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING, MAY 17, 1994
PROXY The undersigned stockholder of QUESTAR CORPORATION
does hereby constitute and appoint R. D. CASH and JAMES A.
HARMON, or either of them, the true and lawful attorney-in-fact
and proxy with all the powers that the undersigned would possess,
if personally present, to vote the stock of the undersigned at
the Annual Meeting of Stockholders of the Company to be held at
its office, 180 East First South Street, Salt Lake City, Utah, on
Tuesday, May 17, 1994, at 10:00 a.m., local time, and at any
adjournments thereof, upon the matters described in the Notice of
Annual Meeting and Proxy Statement, dated April 4, 1994, receipt
of which is hereby acknowledged, and upon any other business that
may come before the meeting or any adjournments.
Dated: , 1994
(Signature)
(Signature)
Please date and sign exactly as name appears hereon. When
signing as Attorney, Executor, Administrator, Trustee, Guardian,
etc., give full title. If stock is held jointly, each joint
owner should sign. If stock is owned by a corporation, please
sign full corporate name by duly authorized officer.
(Please turn over)
This proxy, when properly executed, will be voted in the
manner directed by the stockholder. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED FOR ALL NOMINEES.
1. To elect four directors of the Company.
Nominees: U. Edwin Garrison, W. Whitley
Hawkins, Robert E. Kadlec, and
Harris H. Simmons
(Mark only one)
/ / VOTE FOR all nominees listed above,
except as marked to the contrary above
(if any). To withhold your vote for any
individual nominee, strike a line
through his name in the list above.
/ / VOTE WITHHELD from all nominees.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY, USING THE ENCLOSED ENVELOPE
/ / Please mark if your address has changed
and correct your address on the reverse
side.
Appendix
Photographs and graphic material contained in the proxy
statement:
The section "ELECTION OF DIRECTORS" contains photographs of
each of the nominees and continuing directors.
The section "CUMULATIVE TOTAL SHAREHOLDER RETURN" contains a
performance graph that compares the cumulative total return
of the Company's common stock with a peer group index of
diversified natural gas companies and the S&P Composite-500
Stock Index. The points included in the graph have been
presented in a table.
