(Logo)
QUESTAR CORPORATION
180 East First South Street
P. O. Box 45433
Salt Lake City, Utah 84145-0433
______________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 20, 1997
_______________________________________
The Annual Meeting of Stockholders of Questar Corporation, a Utah
corporation (the "Company"), will be held at the Holiday Inn, 1675
Sunset Drive, Rock Springs, Wyoming, on Tuesday, May 20, 1997, at 10:00
a.m., local time, for the following purposes:
1. To elect four directors to hold office for three years;
2. To transact such other business as may properly come before the
meeting.
Stockholders of record as of March 21, 1997, are entitled to
receive notice of and to vote at the Annual Meeting. If you have your
shares registered in the name of a brokerage firm or trustee and plan to
attend the meeting, please obtain a letter, account statement, or other
evidence of your beneficial ownership of shares to facilitate your
admittance to the meeting.
By Order of the
Board of Directors
Connie C. Holbrook
Vice President and Secretary
Salt Lake City, Utah
April 7, 1997
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 your white
proxy card 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 is voted.
<PAGE>
QUESTAR CORPORATION
PROXY STATEMENT
May 20, 1997
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 20, 1997, at 10:00
a.m., local time, and any adjournment or postponement 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,
1997, will be entitled to notice of and to vote at the Annual Meeting.
At such date 41,091,744 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 as 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 and against the stockholder proposal.
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.
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.
Share information is correct as of March 1, 1997.
Nominees
[Picture] Mr. U. Edwin Garrison is the retired Chairman of
Thiokol Corporation, a position he held from July of
1991 to November of 1995. He also served as Chief
Executive Officer of Thiokol from July of 1991 to July
of 1993 and as President of Thiokol from July of 1989
to July of 1992. Mr. Garrison, age 69, has served as a
director of the Company since 1991 and is also a
director of Thiokol Corporation. He is the beneficial
owner of 17,942 shares of the Company's common stock,
including 4,500 shares under vested stock options, and
owns 5,224 shares of phantom stock under deferred
compensation plans.
[Picture] Mr. W. Whitley Hawkins is the owner of a
consulting firm, Hawkins Bricker International and HBI,
Inc., which manufactures chemical coating products. He
was President and Chief Operating Officer of Delta Air
Lines from May of 1991 to March of 1993. Mr. Hawkins,
age 65, has served as a director of the Company since
1991 and also serves on the Advisory Council of
SunTrust Bank, as a senior advisor to the American
International Group, and on the Advisory Board of the
International Airline Passengers Association. He is
the beneficial owner of 10,470 shares of the Company's
common stock, including 10,250 shares under vested
stock options, and owns 1,532 phantom stock units under
deferred compensation plans.
[Picture] Mr. Robert E. Kadlec has a venture capital firm,
Bentley Capital Corp. He retired as President and
Chief Executive Officer of BC Gas Inc., effective
December 31, 1995. Mr. Kadlec, age 63, has been a
director of the Company since 1987, is a director of BC
Gas Inc., Trans Mountain Pipe Line Company Ltd.,
British Pacific Properties Ltd., International Forest
Products Ltd., and is on the Advisory Board of Anderson
Consulting. He is the beneficial owner of 17,850
shares of the Company's common stock, including 11,450
shares under vested stock options.
[Picture] Mr. Harris H. Simmons has been the President and
Chief Executive Officer of Zions First National Bank
and Zions Bancorporation since December 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, an
emeritus director of the Company who was a director of
the Company from 1968 to 1992. Mr. Simmons, age 42,
has served as a director since 1992. He serves as
Chairman of the Utah Symphony and the Economic
Development Corporation of Utah and as a trustee of
Salt Lake Community College. Mr. Simmons is the
beneficial owner of 7,600 shares of the Company's
common stock, including 7,000 shares under vested stock
options, and owns 3,441 phantom stock units under
deferred compensation plans.
Continuing Directors (Present Term Expires in 1998)
[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 54, has been a director of the
Company since 1977 and also serves as a director of
Zions First National Bank and Zions Bancorporation,
Energen Corporation, and Associated Electric and Gas
Insurance Services Limited; a member of the Board of
Directors of the Federal Reserve Bank (Salt Lake
Branch) of San Francisco; a trustee of the Salt Lake
Organizing Committee for the Olympic Winter Games of
2002; and Southern Utah University. He is the
beneficial holder of 252,808 shares of the Company's
common stock, including 82,851 shares under vested
stock options and 47,529 shares that are owned by two
nonprofit foundations controlled by the Company. He
also has 19,498 phantom stock units under deferred
compensation plans.
[Picture] Mr. James A. Harmon is Senior Chairman of Schroder
Wertheim & Co. Incorporated (investment bankers). He
served as Chairman and Chief Executive Officer from
1986 through December 31, 1995 and as Chairman until
July 1, 1996. Mr. Harmon, age 61, has been a director
of the Company since 1976 and also serves as a
non-executive Chairman of Latin Communications Group
and as a director of The Rank Organization Plc;
Chairman of the Advisory Board of the Barnard-Columbia
University Center for Urban Public Policy; a trustee of
Barnard College; and a trustee emeritus of Brown
University. He is the beneficial holder of 32,064
shares of the Company's common stock, including 8,050
shares under vested stock options. Mr. Harmon also has
17,604 phantom stock units under deferred compensation
plans.
[Picture] Mr. William N. Jones is Chairman of the Board,
Lite Touch, Inc. (residential and commercial lighting
systems). Mr. Jones, age 70, has been a director of
the Company since 1981. He is a trustee of
Intermountain Health Care, Inc. He is the beneficial
holder of 14,794 shares of the Company's common stock,
including 6,300 shares under vested stock options. He
also has 1,359 phantom stock units under deferred
compensation plans.
[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. Mr. Michael,
age 56, has been a director of the Company since 1994.
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
5,500 shares of the Company's common stock, including
4,200 shares under vested stock options. He also has
2,529 phantom stock units under deferred compensation
plans.
[Picture] Mr. Gary L. Nordloh serves the Company as
Executive Vice President, a position to which he was
appointed February 13, 1996. He was appointed to serve
as a director effective October 25, 1996, to fill a
vacancy created by the resignation of Neal A. Maxwell.
He has responsibility for the Company's market
resources activities and is the President and Chief
Executive Officer of Wexpro Company, Celsius Energy
Company, Universal Resources Corporation, Questar Gas
Management Company, Questar Energy Trading Company,
Questar Energy Services, Inc., and Celsius Energy
Resources Ltd. Mr. Nordloh, age 49, is the beneficial
holder of 60,998 shares of the Company's common stock,
including 27,750 shares under vested stock options.
He also has 1,967 phantom stock units under deferred
compensation plans.
Continuing Directors (Present Term Expires in 1999)
[Picture] Mr. Patrick J. Early, age 64, served as Vice
Chairman of Amoco Corporation from July of 1992 until
his retirement in April of 1995. He has served as a
director of the Company since 1995. He was also a
director of Amoco Corporation from 1989 to his
retirement. Prior to service as Vice Chairman, Mr.
Early served as President of Amoco Production Company
from September 1987 to July of 1992. He is a member of
the Board of Trustees of the Museum of Science and
Industry in Chicago and a member of the Board of
Advisors of Catholic Charities in Chicago. Mr. Early
owns 1,700 shares of the Company's common stock,
including 700 shares under a vested stock option, and
has 1,274 phantom stock units under deferred
compensation plans.
[Picture] Mr. Dixie L. Leavitt is the founder and Chairman
of the Board of the Leavitt Insurance Group (a group of
approximately 54 independent insurance agencies located
in seven western states). Mr. Leavitt, age 67, 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 22,123 shares of the Company's
common stock, including 7,000 shares under vested stock
options. He also has 10,386 phantom stock units under
deferred compensation plans.
[Picture] Mr. D. N. Rose serves the Company as Executive
Vice President, a position to which he was appointed
February 13, 1996. He is President and Chief Executive
Officer of Mountain Fuel Supply Company (a subsidiary
of the Company engaged in retail natural gas
distribution) and Questar Pipeline Company (a
subsidiary of the Company engaged in the interstate
storage and transmission of natural gas). He is
President and Chief Executive Officer of Questar
Regulated Services Company, a new entity organized in
late 1996 to own Mountain Fuel and Questar Pipeline.
He has served as a director of the Company since 1984.
Mr. Rose, age 52, is also a trustee of Westminster
College. He is the beneficial holder of 74,035 shares
of the Company's common stock, including 33,907 shares
under vested stock options. He also has 2,165 phantom
stock units under deferred compensation plans.
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 standing committees.
The Executive Committee is vested with the authority to act as the
Board of Directors in managing the affairs of the Company. Although
this Committee has very broad powers, it meets only infrequently when it
would be impractical to call a meeting of the full Board. U. Edwin
Garrison serves as the Chairman of this Committee; other members include
R. D. Cash, James A. Harmon, W. Whitley Hawkins, and Robert E. Kadlec.
The Executive Committee did not hold any meetings during 1996.
The Finance and Audit Committee of the Board of Directors is
currently chaired by Robert E. Kadlec. Other members of this Committee
include James A. Harmon, William N. Jones, Dixie L. Leavitt, Gary G.
Michael, and Harris H. Simmons. During 1996, the Finance and Audit
Committee held two 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, and reviewed reports prepared for the Board
of Directors.
The Company's Board of Directors also has a Management Performance
Committee with W. Whitley Hawkins serving as the current Chairman.
Other members of this Committee include Patrick J. Early, U. Edwin
Garrison, William N. Jones, Robert E. Kadlec, and Gary G. Michael.
During 1996 the Committee held three meetings. The Committee reviews
the performance of R. D. Cash; reviews salary and compensation
arrangements paid the Company's officers and makes recommendations to
the Board of Directors concerning such arrangements; administers the
Long-Term Stock Incentive Plan; and makes recommendations about
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.
The Company has a Nominating Committee consisting of R. D. Cash
(Chairman), Patrick J. Early, Dixie L. Leavitt, and Harris H. Simmons.
This Committee was organized to select individuals for nomination as
directors. The Nominating Committee held one meeting in 1996. Although
the Nominating Committee will consider responsible recommendations by
stockholders concerning nominees, it has not established any formal
procedures for considering such nominees. 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 during
1996; Board Committees held a total of six meetings. All of the
directors attended at least 75 percent of the meeting of the Board and
of the meetings of the Committees on which they serve. With the
exception of Mr. Harmon, all of the directors attended 100 percent of
the meetings to which they were invited as directors and Committee
members.
Directors' Compensation
Messrs. Cash, Nordloh, and Rose do not receive any renumeration
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 $14,400 (increased from $12,000
effective September 1, 1996) payable in 12 monthly installments. They
also receive fees of $900 (increased from $800 as of September 1, 1996)
for each Board meeting attended. With the exception of Mr. Cash, the
Chairman of each Board Committee receives a fee of $900 (increased from
$750 as of September 1, 1996) for the meetings of the Committee chaired
by him. Other directors receive a fee of $700 (increased from $600 as
of September 1, 1996) 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
1996, 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, Rose, and Nordloh, are
also eligible to participate in the Stock Option Plan for Directors
(Directors' Option Plan), which was approved by the Company's
stockholders in May of 1987, subsequently amended with shareholder
approval effective March 1, 1991 and May 21, 1996. 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' Option 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 11, 1997, 10 nonemployee voting directors of the
Company received nonqualified stock options to purchase a total of
34,400 shares of the Company's common stock at an exercise price of
$38.25 per share. Each eligible director, with the exception of Messrs.
Garrison, Hawkins, and Kadlec, received a nonqualified stock option to
purchase 3,200 shares. Messrs. Garrison, Hawkins, and Kadlec each
received options to purchase 4,000 shares reflecting their added
responsibilities as Chairmen of Board Committees. (These options will
not begin to vest until August 11, 1997; consequently, the shares
covered by the options are not included in the shares reported for the
directors.)
In May of 1996, the Company's shareholders approved a new plan-the
Directors' Stock Plan- under which outside directors can elect to
receive their fees in shares of stock. Mr. Garrison has elected to
receive payment of his fees in actual shares of stock.
The Company has entered into individual indemnification agreements
with all directors, including Messrs. Cash, Nordloh, 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 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. Garrison is the former Chairman, President and Chief Executive
Officer of Thiokol Corporation and still serves as a director of
Thiokol. Thiokol purchases gas from Questar Energy Trading Company (a
subsidiary of the Company). Thiokol paid Questar Energy a total of
$1,323,277 during 1996 for gas supplies.
Mr. Jones serves 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 1996, the Company and its
subsidiaries paid IHC a total sum of $524,308 in administrative fees.
Mr. Kadlec is the former President and Chief Executive Officer of
BC Gas Inc. BC Gas has several gas supply contracts with Questar Energy
Trading Company to purchase gas during portions of the 1995-96 and
1996-97 winter heating seasons and also has long-term contracts with
Questar Pipeline Company for storage service. BC Gas paid Questar
Energy Trading and Questar Pipeline a total of $8,929,295 during 1996
for gas purchases and storage services.
Mr. Simmons is the President and Chief Executive Officer of Zions
First National Bank. The Company has a line of credit through Zions.
Two of the Company's subsidiaries, Questar InfoComm, Inc. and Mountain
Fuel Supply Company, have accounts with Zions. The Company's credit
line with Zions is priced at the same level that the Company pays for
its other lines of credit, and the services provided by Zions to Questar
InfoComm and Mountain Fuel are based on commercial terms that are
available to other clients.
EXECUTIVE COMPENSATION
The following Summary Compensation Table lists annual and
long-term compensation earned by Mr. Cash and the other four most highly
compensated officers during 1994, 1995, and 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation All Other
Restricted Options Compensation
Name and
Principal Position Year Base Salary ($) Bonus ($)1 Stock Awards ($)2 (#) ($)3
<S> <C> <C> <C> <C> <C> <C>
R. D. Cash 1996 413,000 144,340 135,979 35,000 67,683
Chairman, President and 1995 395,000 28,463 23,336 30,000 54,240
Chief Executive Officer 1994 377,667 126,011 89,407 30,000 49,335
D. N. Rose 1996 258,833 70,639 70,571 23,000 39,483
President and Chief 1995 235,167 27,852 27,808 19,000 29,064
Executive Officer 1994 209,500 36,061 36,053 19,000 21,713
Regulated Services
Companies
G. L. Nordloh 1996 254,583 89,269 86,214 25,000 39,250
President and Chief 1995 235,000 25,099 16,039 22,000 25,521
Executive Office 1994 164,583 44,127 45,333 22,000 20,658
Market Resources Companies
A. J. Marushack 4/ 1996 237,667 107,088 4/ N/A 4/ 19,000 31,592
1995 225,500 6,089 6,086 19,000 28,771
1994 201,333 39,254 39,201 19,000 20,671
C. M. Heiner 1996 227,500 56,829 48,960 19,000 34,972
Senior Vice President 1995 218,417 0 0 19,000 23,737
1994 208,983 55,264 39,256 19,000 21,891
</TABLE>
1/ Amounts listed under this heading for 1996 include cash payments
awarded under the 1996 Annual Management Incentive Plans (AMIPs), cash
payments awarded under the 1996 general employee compensation plans
adopted by Celsius Energy Company/Universal Resources Corporation and
Wexpro Company (E&P Plans). The amounts reported for 1994 include
special cash bonuses paid to Messrs. Cash and Heiner when a business
unit was sold.
2/ Amounts under this heading for 1996 include the value (as of the
grant date) of any shares of restricted stock granted in 1997, in lieu
of cash, as partial payment of bonuses earned under the 1996 AMIPs and
the value of any shares of restricted stock granted in connection with
the 1996 E&P Plans. All shares of restricted stock vest in two annual,
equal installments on the first business day in February of the first
and second years following 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,
1996, Mr. Cash had 2,327 shares of restricted stock having a market
value of $85,517; Mr. Rose had 1,485 shares having a market value of
$54,574; Mr. Nordloh had 1,305 shares worth $47,959; Mr. Marushack had
897 shares worth $32,965; and Mr. Heiner had 717 shares worth $26,350.
3/ The figure opposite Mr. Cash's name for 1996 includes $13,106 in
contributions to the Employee Investment Plan, $20,700 in directors'
fees, and $33,877 in "matching contributions" to the Deferred Share
Plan. The figure listed opposite Mr. Rose's name for 1996 includes
$13,106 in contributions to the Employee Investment Plan, $10,900 in
director's fees, and $15,477 in matching contributions to the Deferred
Share Plan. The figure listed opposite Mr. Nordloh's name for 1996
includes $13,106 in contributions to the Employee Investment Plan;
$10,900 in director's fees, and $15,244 in matching contributions to the
Deferred Share Plan. The figure listed opposite Mr. Marushack's name
for 1996 includes $13,106 in contributions to the Employee Investment
Plan; $6,900 in director's fees; and $11,586 in matching contributions
to the Deferred Share Plan. The figure listed opposite Mr. Heiner's
name includes $13,106 in contributions to the Employee Investment Plan,
$6,900 in director's fees, $10,562 in matching contributions to the
Deferred Share Plan, and $4,404 for unused vacation.
4/ Mr. Marushack retired on February 28, 1997, as the President and
Chief Executive Officer of Questar Pipeline Company, with over 39 years
of service. Under the terms of the AMIP, he was paid his final earned
bonus in cash.
The following table lists information concerning the stock options
that were granted to Messrs. Cash, Rose, Nordloh, Marushack, and Heiner
during 1996 under the Company's Long-Term Stock Incentive Plan. No
stock appreciation rights (SARs) were granted during 1996.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTIONS>
% of Total
Options Options Granted Exercise or
Granted to Employees in Base Price Expiration Grant Date
Name (#)1 Last Fiscal Year ($/Share) Date Value ($)2
<S> <C> <C> <C> <C> <C>
R. D. Cash 35,000 8.8 33.625 2/13/2006 262,500
D. N. Rose 23,000 5.8 33.625 2/13/2006 172,500
G. L. Nordloh 25,000 6.3 33.625 2/13/2006 187,500
A. J. Marushack 19,000 4.8 33.625 2/13/2006 142,500
C. M. Heiner 19,000 4.8 33.625 2/13/2006 142,500
</TABLE>
1/ These stock options vest in four annual, equal installments, with
the first installment exercisable as of August 13, 1996. Participants
can use cash or previously-owned shares as consideration for option
shares. Options expire when a participant terminates his employment,
unless termination is caused by an approved retirement, death, or
disability. Options can be exercised 12 months following a
participant's death or disability. Options granted prior to 1997 can be
exercised for three months following a participant's approved
retirement. Options granted in 1997 and subsequent years may be
exercised for a term not to exceed three years that is determined by the
Committee.
2/ When calculating the present value of options as of the date
granted (February 13, 1996), the Company used the Black-Scholes option
pricing model. The Company assumed a volatility of 20.9 percent, a
risk-free interest rate of 5.73 percent, a dividend yield of 3.51
percent, and an average life of 8 years. The real value of the options
in this table depends upon the actual performance of the Company's stock
during the applicable period. There can be no assurance that the values
shown in this table will be achieved.
The following table lists information concerning the stock options
that were exercised by Messrs. Cash, Rose, Nordloh, Marushack, and
Heiner during 1996 and the total options and their value held by each at
year-end 1996.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-end Option/SAR Values
<TABLE>
<CAPTION>
Shares Number of Unexercised Value of Unexercised, In-
Acquired or Value Options/SARs at Year-End the-Money Options/SARs
Exercised Realized1 (#)2 At Year-End ($)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
R. D. Cash 14,772 217,856 85,851 48,750 746,590 362,031
D. N. Rose 14,593 132,818 33,907 31,500 202,299 167,906
G. L. Nordloh 15,500 100,500 27,750 35,250 145,531 190,594
A. J. Marushack 12,000 195,750 65,500 28,500 636,594 158,531
C. M. Heiner 0 0 51,250 28,500 436,500 158,531
</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 1996 there were no outstanding stock appreciation
rights (SARs); they 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, 1996, 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 1996 and do not include Social Security
benefits. Benefits under the Retirement Plan are not reduced or offset
by Social Security benefits, although participants who retire prior to
age 62 do receive a temporary supplement until reaching age 62.
Pension Plan Table
<TABLE>
<CAPTION>
Highest Consecutive
Three-Year Average Years of Service
Annual Compensation 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$250,000 68,768 91,691 114,614 120,864 127,114
300,000 83,018 110,691 138,364 145,864 153,364
350,000 97,268 129,691 162,114 170,864 179,614
400,000 111,518 148,691 185,864 195,864 205,864
450,000 125,768 167,691 209,614 220,864 232,114
500,000 140,018 186,691 233,364 245,864 258,364
550,000 154,268 205,691 257,114 270,864 284,614
</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 permanent
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.
Federal tax laws impose limits on the amount of a participant's
annual compensation that can be used when calculating benefits under
qualified plans and on the amount of benefits that can be paid to a
participant from such plans. The SERP, a nonqualified plan, was adopted
in 1987 to compensate officers who are affected by these limits. It
provides for retirement benefits equal to the difference between the
benefits payable under the qualified Retirement Plan and the benefits
that would be payable absent such limits. All of the officers listed in
the table earn annual compensation in excess of the current cap of
$160,000 (increased from $150,000 effective January 1, 1997) and all of
them have vested benefits under the SERP.
The "final average earnings" (the average annual earnings for the
three highest-paid consecutive years of service} for purposes of
calculating retirement benefits for the executive officers named above
is as follows: Mr. Cash, $563,300; Mr. Rose, $306,079; Mr. Nordloh,
$306,015; and Mr. Heiner, $283,992. These numbers are accurate as of
December 31, 1996. The officer's base salary, cash bonus payments, and
value of restricted stock (paid in lieu of cash) reported in the Summary
Compensation Table would be included in the calculation of the officer's
final average earnings. The amounts reported in the Summary
Compensation Table are somewhat different than the final average
earnings figures because the latter figures include actual cash payments
when made, not when earned, and the value of restricted stock when
distributed, not granted. Dividends on the restricted shares are also
included in the officer's final average earnings, but are not reported
in the table. One-time extraordinary bonuses and payments for unused
vacation are reported in the table, but are not included in final
average earnings.
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 service for the individuals listed in the
Summary Compensation Table are 21 years for Mr Cash, 28 years for Mr.
Rose, 13 years for Mr. Nordloh, 39 years for Mr. Marushack, and 26 years
for Mr. Heiner.
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 as of December 31, 1996 are as
follows: Mr. Cash, $39,522; Mr. Rose, $23,450; and Mr. Heiner, $21,830.
Mr. Marushack earned an annual benefit of $22,407 as of February 28,
1997.
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 annual compensation cap of
$160,000 applicable to the Retirement Plan, 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. The plan also contains a provision that limits
severance 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: $880,000
to Mr. Cash; $551,400 to Mr. Rose: $517,000 to Mr. Nordloh; and $477,200
to Mr. Heiner. 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 also deemed to occur once any acquiring person
becomes the beneficial owner, directly or indirectly, of securities
representing 15 percent or more of the Company's outstanding shares of
common stock.
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following graph compares the cumulative total return 1/ 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. 2/, and of the S&P Composite-500 Stock Index.
[The graph has three lines connecting the points in the following table]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Questar $100.00 $128.42 $166.91 $144.40 $182.71 $207.43
S&P 500 100.00 107.79 118.66 120.56 165.78 204.30
Peer Group 100.00 116.32 137.99 125.41 168.33 220.67
</TABLE>
1/ Assumes $100 vested at the close of trading on December 31, 1991
in the Company's common stock, the published index of peer companies,
and the S&P 500 Index; also assumes the dividends are reinvested. For
1996, the Company had a return of 13.5 percent compared to a return of
23.2 percent for the S&P 500 Index and a return of 31.1 percent for the
published peer group index. For the five-year period, the Company had a
compounded annual return of 15.7 percent compared to similar returns of
15.4 percent for the S&P 500 Index and 17.2 percent for the published
peer group index.
2/ The Company chose this index of diversified natural gas companies
for comparison purposes because it is a published and widely-used index.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Management Performance Committee (the "Committee") is a
Committee of outside directors that is chaired by W. Whitley Hawkins.
Other members include Patrick J. Early, U. Edwin Garrison, William N.
Jones, Robert E. Kadlec, and Gary G. Michael. 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 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 Committee
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
1996 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 also assesses the individual performance of
officers, particularly the performance of R. D. Cash and a group that
includes 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 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 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 components 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 or market
average of survey data. The increases awarded to Mr. Cash and other
officers are based on an assessment of each officer's comparison with
survey data and individual performance.
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. Annual bonuses are directly linked to key financial and operating
objectives for the major business units and for the Company on a
consolidated basis. Each year, the Committee reviews and approves
specified performance objectives for the year. Performance objectives
are both financial (e.g., net income, return on equity) and efficiency
objectives (e.g., customer service rating, safety performance, finding
costs, operating and maintenance costs). The performance objectives are
set after the Committee reviews actual results for the prior year and
budgeted results for the year in question and are generally higher than
actual results for the prior year and expectations for the current year.
An overall performance factor is multiplied by each officer's
target bonus to determine his earned bonus. Each officer's target bonus
is a percentage of his base salary in effect at the time the target
bonus is approved. The Committee determines the allocation of each
officer's target bonus between business unit results and consolidated
results. One half of each officer's earned bonus is paid in cash; the
remainder is paid in shares of restricted stock that vest in two annual,
equal installments.
Stock Options
Annual grants of stock options are awarded to the Company's
officers and key employees as part of their "risk-based" compensation.
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
when surveys indicate that stock options should be increased to remain
competitive. These grants are awarded pursuant to the terms of an
omnibus Long-Term Stock Incentive Plan, which allows the Committee broad
flexibility to use a wide range of stock-based performance awards.
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.
The Committee has stock ownership guidelines for officers.
(Shares purchased through employer contributions are excluded from the
calculation, but phantom stock units attributable to an officer's
deferred compensation are included.) All of the officers named in the
Summary Compensation Table satisfy these guidelines, which constitute a
multiple of their base salaries.
Information concerning the stock options granted to the Company's
highest ranking executive officers in 1997 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 1996 and the year-end value of their remaining stock
options.
Specific Compensation Decisions
The Company, in 1996, generally exceeded its specified performance
objectives. It generated net income for common shareholders of $97.8
million, (compared to $83.8 million in 1995), for an overall earnings
per share of $2.39, which represents a 17 percent increase from the
$2.05 per share earnings figure in 1995. Each of its major business
units also exceeded performance objectives which had been set in advance
by the Committee. Consequently, Mr. Cash earned a bonus of $271,990, or
137 percent of his target bonus of $199,000. (Half of this amount was
paid in shares of restricted stock. He also received an additional
$8,329 in cash bonuses for his participation in general employee
incentive compensation plans.) His salary was increased to $416,000
effective March 1, 1996, and further increased to $440,000 effective
March 1, 1997. These salary increases were approved after the Committee
received survey data and reviewed Mr. Cash's achievement of specified
personal and corporate goals. In February of 1997, the Committee
awarded Mr. Cash an option to purchase 35,000 shares of stock at a price
of $38.25 per share. The number of shares covered by this option is
identical to the number of shares covered by the option granted to him
in 1996. The 1997 stock options vest in four equal installments
beginning August 11, 1997 and ending August 11, 2000.
Miscellaneous
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, their experience, and
the greater demands on their time. Consequently, the Committee supports
the Company's traditional practice of limiting the perquisites granted
to officers. Company officers do not have first class travel
privileges, cars, country club memberships, supplemental welfare benefit
plans, executive dining room service, or personal use of the Company's
airplane.
In 1993, Congress enacted Section 162(m) of the Internal Revenue
Code that generally limits the dollar amount of "Compensation" paid to
the individual executive officers named in the Summary Compensation
Table. The primary exception to this limit, which is $1,000,000 for
each officer, is for performance-based compensation. The Company's
Long-Term Stock Incentive Plan does qualify under the regulations
promulgated by the Treasury Department for performance-based
compensation. Consequently, the Company can continue to take a
deduction for any ordinary income recognized by officers when exercising
nonqualified stock options.
Management Performance Committee
W. Whitley Hawkins, Chairman
Patrick J. Early
U. Edwin Garrison
William N. Jones
Robert E. Kadlec
Gary G. Michael
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,
1997.
<TABLE>
<CAPTION>
Shares Percent of
Deferred Outstanding
Beneficial Compensation Plans 1/ Total Shares 2/
<S> <C> <C> <C> <C> <C>
Directors:
R. D. Cash 3,4,5,6,7 252,808 19,498 272,306 .61%
P. J. Early 8 1,700 1,274 2,974 *
U. Edwin Garrison 8 17,942 5,224 23,166 *
James A. Harmon 8,9 32,064 17,604 49,668 *
W. Whitley Hawkins 8 10,470 1,532 12,002 *
William N. Jones 8,9 14,794 1,359 16,153 *
Robert E. Kadlec 8,10 17,850 0 17,850 *
Dixie L. Leavitt 7,8 22,123 10,386 32,509 *
Gary G. Michael 8 5,500 2,529 8,029 *
Gary L. Nordloh 4,5,6,7 60,998 1,967 62,965 .15%
D. N. Rose 4,5,6 74,035 2,165 76,200 .18%
Harris H. Simmons 8 7,600 3,441 11,041 *
Nondirector Executive Officers:
C. M. Heiner 4,5,6 101,795 1,891 103,686 .25%
A. J. Marushack 4,5,6,7 128,937 2,833 131,770 .31%
All directors, senior 915,841 76,054 991,895 2.2%
directors, and executive
officers (18 individuals)
</TABLE>
1/ Phantom stock units are held through the various deferred
compensation plans available to the Company's directors and officers.
Although these plans only permit such units to be paid in the form of
cash, investments in such units represent the same investment in the
performance of the Company's common stock as do investments in actual
shares of common stock.
2/ Unless otherwise listed, the percentage of shares owned is less
than .10%. (The percentages do not include phantom stock units.) The
percentages of beneficial ownership have been calculated in accordance
with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934.
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 47,529
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, 1996 as follows: Mr. Cash, 31,254 shares;
Mr. Rose, 16,814 shares; Mr. Nordloh, 8,352 shares; Mr. Marushack,
31,455 shares; and Mr. Heiner, 21,813 shares.
5/ The Company's executive officers have options granted them under
the terms of the Company's 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, 1997 as
follows: Mr. Cash, 82,851 shares; Mr. Rose, 33,907 shares; Mr. Nordloh,
27,750 shares; Mr. Marushack, 65,500 shares; and Mr. Heiner, 51,250
shares.
6/ The Company's executive officers acquired restricted shares of
the Company's common stock in partial payment of bonuses earned under
the 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, 1997: Mr. Cash, 3,902 shares; Mr.
Rose, 2,258 shares; Mr. Nordloh, 2,493 shares; and Mr. Heiner, 1,280
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 5,071 are controlled by him as custodian for
his son. Messrs. Leavitt and Marushack own their shares of record
jointly with their respective wives. Some of Mr. Nordloh's record
shares are owned by a family trust.
8/ Messrs. Early, Garrison, Harmon, Hawkins, Jones, Kadlec, Leavitt,
Michael, and Simmons have vested nonqualified stock options granted
under the terms of the Directors' Plan to purchase shares of common
stock as follows: Mr. Early, 700 shares; Mr. Garrison, 4,500 shares; Mr.
Harmon, 8,050 shares; Mr. Hawkins, 10,250 shares; Mr. Jones, 6,300
shares; Mr. Kadlec, 11,450 shares; Mr. Leavitt, 7,000 shares; Mr.
Michael, 4,200 shares; and Mr. Simmons, 7,000 shares.
9/ 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.
10/ Mr. Kadlec's wife owns 200 shares of common stock. Mr. Kadlec
has voting control and investment control over such shares. Such shares
are included in the shares listed opposite his name.
11/ The total number of shares reported for this group includes
vested options to purchase 389,220 shares of stock. When vested options
are excluded, the group owns approximately 1.3 percent of the
outstanding shares of the Company's common stock.
SECURITY OWNERSHIP, PRINCIPAL HOLDERS
The following table sets forth information, as of December 31,
1996, 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.
Name and Address of Shares and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
First Security Bank, N.A. 4,024,042 9.8
79 South Main Street Trustee for Company
Salt Lake City, Utah 84111 Employee Benefit Plans
and Bank 1/
FMR Corporation 2,693,117 6.6
82 Devonshire Street Investment Advisor
Boston, Massachusetts 02109 Bank 2/
_____________
1/ Of this total, First Security beneficially owns 3,925,935 shares
in its role as trustee of employee benefit plans sponsored by the
Company. Participating employees control the voting of such shares.
2/ Of this total, 1,969,000 shares are held by Fidelity Management
and Research Company, an investment advisor; 720,817 shares are held by
Fidelity Management Trust Company, a bank; and 3,300 shares are held by
Fidelity International Limited. In its Schedule 13G filed on February
14, 1997, FMR indicated that it or its affiliates had sole power to
dispose of all these shares and sole power to vote 535,317 shares.
INDEPENDENT AUDITORS
The firm of Ernst & Young LLP, independent auditors, has audited
the accounts of the Company for a number of years, including 1996, and
is expected to continue doing so. Representatives of Ernst & Young LLP
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 8, 1997, in order to have such proposals evaluated for
inclusion in the proxy materials relating to the Company's 1998 Annual
Meeting of Stockholders, which is scheduled to be held on May 19, 1998.
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, 1996, 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 1996 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, P. O. Box 45433, Salt Lake City, Utah 84145-0433.
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 all filing requirements were satisfied.
OTHER MATTERS
The United Food and Commercial Workers Union, Local 99R, with
headquarters in Phoenix, Arizona (UFCW), has notified the Company that
it intends to present, at the Company's Annual Meeting, a proposed
recommendation in favor of electing directors on an annual basis. The
UFCW owns 100 shares of the Company's common stock. The Company has
been advised that the UFCW does not intend to solicit proxies in favor
of the proposal. If the UFCW's proposal is properly presented at the
Company's 1997 Annual Meeting, the persons named in the enclosed proxy
intend to exercise discretionary authority and vote against the
proposal.
Other than this matter, the directors and officers know of no
additional 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 postponement of such
meeting, 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 Bylaws specifying the requirements will be furnished to any
stockholder upon written request to the Secretary.
By Order of the
Board of Directors
Connie C. Holbrook
Vice President and Secretary
<PAGE>
QUESTAR CORPORATION SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
180 East First South ANNUAL MEETING, MAY 20, 1997
P. O. Box 45433
Salt Lake City, Utah 84145-0433
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 the Holiday Inn, 1675 Sunset Drive, Rock Springs,
Wyoming, on Tuesday, May 20, 1997, 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 7, 1997, receipt of which is
hereby acknowledged, and upon any other business that may come before
the meeting or any adjournments or postponements.
Dated: , 1997
(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
(Please turn over) duly authorized officer.
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.
The Board recommends a vote FOR the election of directors.
To elect four directors of the Company.
Nominees: U. Edwin Garrison, W. Whitley Hawkins, Robert E. Kadlec,
and Harris H. Simmons.
___ 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.
In their discretion, the proxies are authorized to vote upon such
other matters as may properly come before the meeting, or any
adjournments or postponements of such meeting.
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. ____
