Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (Agreement) is
made and entered into on May 7, 2009 (the effective date),
between
QUESTAR CORPORATION (Company),
a Utah corporation, and
RICHARD J. DOLESHEK (Executive).
The parties represent as
follows:
A. Questar and Executive desire to
enter into this Agreement to establish and set forth the terms and
conditions of Executive’s employment with Questar.
B. Questar and Executive
acknowledge that the terms of this Agreement constitute good and
valuable consideration.
Therefore, in consideration of the mutual
covenants contained in this Agreement, the parties agree as
follows:
ARTICLE 1
DEFINITIONS
As used herein, the following words and
phrases shall have the following respective meanings unless the
context clearly indicates otherwise:
Agreement Date means the effective date of this
Agreement.
Anniversary Date
means any annual anniversary of the
Agreement Date.
Board means the Board of Directors of the
Company.
Cause with respect to the Executive’s
termination of employment means any of the following: (1)
Executive’s conviction or plea of nolo contendre to a felony
or a misdemeanor involving moral turpitude, (2) Executive’s
engaging in an act of fraud, theft, embezzlement or willful
misappropriation of the property of the Company; (3) Executive
engaging in an act of dishonesty that causes a substantial
detriment to the Company or its Subsidiaries; (4) Executive’s
violation of any Company policy or practice regarding
discrimination or harassment that would be grounds for termination
of any other Company employee; (5) Executive’s willful
failure to perform substantially the duties as contemplated by this
Agreement (other than such failure resulting from incapacity
resulting from mental or physical illness); and (6)
Executive’s willful or intentional material breach of this
Agreement that results in financial detriment that is material to
the Company and its Subsidiaries taken as a whole.
For purposes of clause (6) of the
preceding sentence, Cause shall not include any one or more of the
following: bad judgment, negligence, or any act or omission
that Executive believed in good faith to have been in or not
opposed to the interest of the Company (without intent of Executive
to gain, directly or indirectly, a profit to which he was not
legally entitled).
1
Except for termination for Cause based on
clauses (1) or (2) above, the Company may not terminate
Executive’s employment for Cause unless it has: (1)
officially given Executive written notice at least 30 days prior to
the Date of Termination of its intent to terminate
Executive’s employment, which written notice shall contain a
detailed description of the specific reasons that form the basis
for such action; (2) provided Executive an opportunity to appear
before the Board prior to the Date of Termination to present
arguments on his own behalf; and (3) received the affirmative vote
of at least two-thirds of the members of the Board that it is
proper to terminate Executive’s employment for Cause.
Pending the final resolution of any disputes concerning
Executive’s termination of employment for Cause, the Board my
suspend Executive with pay.
Committee means the Management Performance Committee of the
Board of Directors of the Company.
Common Stock means the common stock of the Company.
Company means Questar Corporation on a consolidated basis, or
the ultimate parent corporation of the acquiring or surviving
company in the case of an acquisition, merger, consolidation, etc.
involving Questar Corporation.
Date of Termination
means the effective date of a Termination
of Employment for any reason, including death or Disability,
whether initiated by the Company or by Executive.
Disability means a condition that renders Executive unable to
engage in any substantial, gainful activity by reason of any
medically-determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than twelve months. The
foregoing definition of “Disability” shall be
interpreted in a manner consistent with Section 409A of the Code
and the Internal Revenue Service and Treasury guidance
thereunder.
Good Reason with respect to the Executive’s termination of
employment means any of the following events or conditions which
occur without the Executive’s written consent and which
remain in effect after notice has been provided by the Executive to
the Company of such event or condition and the expiration of a 30
day cure period: (i) a material diminution in the
Participant’s base compensation; (ii) a material diminution
in the Participant’s authority, duties, or responsibility;
(iii) a material change in the geographic location at which the
Participant performs services; or (iv) any other action or inaction
that constitutes a material breach by the Company or its
Subsidiaries of the Agreement. The Participant’s
notification to the Company must be in writing and must occur
within a reasonable period of time, not to exceed 90 days,
following the Participant’s discovery of the relevant event
or condition. Any reasonable determination by Executive that
any of the specified events has occurred and constitutes Good
Reason shall be conclusive and binding for all purposes.
Notwithstanding the above, it shall not
constitute Good Reason if, at any time during the Employment
Period, Company assigns this Agreement to any entity that is
“spun off” or “split off” from Company, and
such entity expressly assumes the obligations of Company under this
Agreement.
2
Stock Grants mean any grants of restricted stock, options to
purchase shares of the Company’s common stock, stock
appreciation rights, or other equity-based awards made to
Executive.
Subsidiary means any entity of which the Company, directly or
indirectly, owns at least 50 percent of the outstanding shares of
capital stock entitled to vote for the election of
directors.
Termination Without Cause
means a Termination of Employment by the
Company for any reason other than Cause or the Executive’s
death or Disability.
ARTICLE 2
DUTIES
The Company shall employ Executive during
the Employment Period as its Executive Vice President and Chief
Financial Officer, reporting to the Chairman, President and Chief
Executive Officer, subject to all Company policies and procedures
in effect from time to time as amended in the discretion of
Company. At its discretion, the Board of Directors of any
Subsidiary may appoint Executive to serve in other capacities with
the Company’s Subsidiaries. Executive, during the
Employment Period, shall devote substantially all of his business
time, attention, and effort to the performance of services to
Company in his capacity as Executive Vice President and Chief
Financial Officer and to the affairs of the Company and shall use
his reasonable efforts to promote the best interests of the
Company. The Executive shall perform the services required by
this Agreement at the Company’s present principal place of
business or at such other location(s) as may be mutually agreed by
Company and Executive; provided, however, that Company may from
time to time require the Executive to travel temporarily to other
locations on Company business consistent with the business needs of
Company.
ARTICLE 3
EMPLOYMENT
PERIOD
Subject to earlier termination in
accordance with Article 7, the term of Executive’s employment
under this Agreement (the “Employment Period”) shall
begin on the Agreement Date and end on the date that is three years
after such Agreement Date; provided, however, that commencing on
the second Anniversary Date of the Agreement Date and continuing
thereafter on each subsequent Anniversary Date, the Employment
Period will be automatically extended by a period of one year
unless the Board provides notice to Executive at least 30 days
prior to any such Anniversary Date or Executive provides notice to
the Board at least 30 days prior to any such Anniversary Date that
the Employment Period will not be so extended. Once notice of
non-renewal has been tendered by either party, no further automatic
extensions of this Agreement shall occur.
3
ARTICLE 4
COMPENSATION
4.1
Salary . The Company shall pay Executive an initial
annual salary of $450,000, payable in semi-monthly installments
(“Base Salary”). The Committee shall review
Executive’s Base Salary when it reviews the base salaries
paid to the Company’s other executive officers in February of
each year. For the term of this Agreement, the Committee may
not reduce Executive’s Base Salary. Effective as of the
date of any such increase in Executive’s Base Salary, the
Base Salary shall be considered the new Base Salary for all
purposes of this Agreement and may not thereafter be reduced.
Any increase in Base Salary shall not limit or reduce any
other obligation of the Company to Executive under this Agreement
without Executive’s written consent. The Committee
shall also determine how to allocate Executive’s Base Salary
among the Company and its principal subsidiaries.
4.2
Annual Bonus . For the 2009 fiscal year ending December 31,
2009, Executive shall be eligible to receive an annual bonus,
payable when annual bonuses are paid to other executive officers
under the Company’s Annual Management Incentive Plan
(“AMIP”), with a target bonus of 90% of
Executive’s Base Salary up to a maximum of 180% of
Executive’s Base Salary. The Executive’s 2009
bonus shall be tied to the same objectives and performance goals as
set forth in AMIP for other Company executives; provided, however,
that Executive’s bonus payout for the 2009 fiscal year shall
not be less than $400,000 unless, prior to the date the annual
bonuses are paid to other executives, i) Executive’s
employment is terminated by the Company with Cause or ii) Executive
terminates his employment without Good Reason, then Executive shall
not be entitled to receive an annual bonus for 2009.
Commencing the first full plan year of
Executive’s employment, Executive shall be nominated to
participate in AMIP (or AMIP II as determined by the Committee or
if Executive is considered a “Covered Employee” as
defined in AMIP II) and shall have a target bonus equal to at least
90 percent of Base Salary at the time the target bonus is set.
Thereafter, the Committee can only increase, not reduce,
Executive’s target bonus under AMIP.
4.3
Other Bonus Programs
. Executive shall be nominated to
participate in the Company’s Long-term Cash Incentive Plan
(“Cash Incentive Plan”) beginning with the 2010-2012
performance period with a target bonus of not less than $500,000,
and any additional cash incentive compensation program adopted by
the Committee or the Board for the Company’s officers.
ARTICLE 5
STOCK OPTIONS,
RESTRICTED
STOCK AND STOCK
OWNERSHIP
5.1
Equity Grants Upon Agreement
Date: For the specific
purpose of hiring Executive, Executive shall be granted, pursuant
to the Company’s Long-term Stock Incentive Plan (“Stock
Plan”) the following equity grants:
4
(a)
Stock Options : an option to purchase 100,000 shares of the
Company’s Common Stock at a per share price equal to the
closing price of such stock as reported in the Wall Street Journal
on the Agreement Date. The stock option shall vest in its
entirety three years after the Agreement Date. The stock
option grant shall have a seven-year term. Executive and
Company shall execute a Stock Option Agreement similar to those
provided to other executives with employment contracts.
(b)
Restricted Stock
: 60,000 shares of restricted stock
as of the Agreement Date with the grant vesting over three years in
equal proportion on the first, second and third Anniversary Date of
the Agreement Date. Executive and Company shall execute a
Restricted Stock Agreement similar to those provided to other
executives with employment contracts.
5.2
Future Equity Grants
. Executive shall be eligible to be
granted stock options, restricted stock awards, stock appreciation
rights, performance shares, or other equity based compensation
pursuant to the Stock Plan as determined by the Committee in its
sole and absolute discretion.
5.3
Stock Ownership
. The Company requires all officers
to own shares of the Company’s common stock. Executive
is expected to acquire on or before the third Anniversary Date of
the Agreement Date (and retain throughout the term of this
Agreement) shares of the Company’s common stock (including
phantom stock units) having a value equal to at least three times
his annual Base Salary. In determining compliance with this
requirement, Executive&r
