<PAGE>   1
                                                                   Exhibit 10.07



                            EQUITABLE RESOURCES, INC.




                           DEFERRED COMPENSATION PLAN













                 AMENDED AND RESTATED EFFECTIVE OCTOBER 27, 1999


<PAGE>   2



                            EQUITABLE RESOURCES, INC.
                           DEFERRED COMPENSATION PLAN

                                Table of Contents

ARTICLE I......................................................................5
   1.1   STATEMENT OF PURPOSE..................................................5

ARTICLE II.....................................................................6


DEFINITIONS....................................................................6

   2.1      ACCOUNT............................................................6
   2.2      BASE SALARY........................................................6
   2.3      BENEFICIARY........................................................6
   2.4      BOARD..............................................................6
   2.5      BONUS..............................................................6
   2.6      CHANGE IN CONTROL..................................................6
   2.7      CODE...............................................................7
   2.8      COMMITTEE..........................................................7
   2.9      COMPANY............................................................7
   2.10     COMPENSATION.......................................................7
   2.11     CREDITED SERVICE...................................................7
   2.12     DEFERRAL ACCOUNT...................................................8
   2.13     DEFERRAL AMOUNT....................................................8
   2.14     DEFERRAL BENEFIT...................................................8
   2.15     DEFERRAL ELECTION..................................................8
   2.16     DISABILITY.........................................................8
   2.17     EARLY RETIREMENT...................................................8
   2.18     ELIGIBLE EMPLOYEE..................................................8
   2.19     EMPLOYER...........................................................8
   2.20     HARDSHIP WITHDRAWAL................................................8
   2.21     INVESTMENT RETURN RATE.............................................8
   2.22     MATCHING ACCOUNT...................................................9
   2.23     MATCHING AMOUNT....................................................9
   2.24     PARTICIPANT........................................................9
   2.25     PARTICIPATION AGREEMENT............................................9
   2.26     PLAN...............................................................9
   2.27     PLAN YEAR..........................................................9
   2.28     REGULAR DEFERRAL AMOUNT............................................9
   2.29     REGULAR MATCHING AMOUNT............................................9
   2.30     RETIREMENT.........................................................9
   2.31     SELECTED AFFILIATE................................................10
   2.32     SPECIAL BONUS DEFERRAL AMOUNT.....................................10
   2.33     SPECIAL BONUS MATCHING AMOUNT.....................................10
   2.34     VALUATION DATE....................................................10

ARTICLE III...................................................................11


ELIGIBILITY AND PARTICIPATION.................................................11

   3.1      ELIGIBILITY.......................................................11
   3.2      PARTICIPATION.....................................................11
   3.3      CHANGE IN PARTICIPATION STATUS....................................11
   3.4      INELIGIBLE PARTICIPANT............................................11



                                      -2-
<PAGE>   3

ARTICLE IV....................................................................12


DEFERRAL OF COMPENSATION......................................................12

   4.1     DEFERRAL AMOUNTS...................................................12
   4.2     MATCHING AMOUNTS...................................................12
   4.3     CREDITING OF DEFERRAL AMOUNTS AND MATCHING AMOUNTS.................13

ARTICLE V.....................................................................14


BENEFIT ACCOUNTS..............................................................14

   5.1     VALUATION OF ACCOUNT...............................................14
   5.2     CREDITING OF INVESTMENT RETURN.....................................14
   5.3     STATEMENT OF ACCOUNTS..............................................14
   5.4     VESTING OF AMOUNTS.................................................14
   5.5     INVESTMENT OF REGULAR DEFERRAL AMOUNTS.............................15
   5.6     INVESTMENT OF SPECIAL BONUS DEFERRAL AMOUNTS AND MATCHING AMOUNTS..15

ARTICLE VI....................................................................16


PAYMENT OF BENEFITS...........................................................16

   6.1     PAYMENT OF DEFERRAL BENEFIT UPON DEATH, DISABILITY OR RETIREMENT...16
   6.2     PAYMENT OF DEFERRAL BENEFIT UPON TERMINATION.......................16
   6.3     PAYMENTS TO BENEFICIARIES..........................................16
   6.4     IN-SERVICE DISTRIBUTION............................................16
   6.5     HARDSHIP WITHDRAWAL................................................16
   6.6     FORM OF PAYMENT....................................................17
   6.7     COMMENCEMENT OF PAYMENTS...........................................17
   6.8     SMALL BENEFIT......................................................17

ARTICLE VII...................................................................18


BENEFICIARY DESIGNATION.......................................................18

   7.1     BENEFICIARY DESIGNATION............................................18
   7.2     CHANGE OF BENEFICIARY DESIGNATION..................................18
   7.3     NO DESIGNATION.....................................................18
   7.4     EFFECT OF PAYMENT..................................................18

ARTICLE VIII..................................................................19


ADMINISTRATION................................................................19

   8.1     COMMITTEE..........................................................19
   8.2     AGENTS.............................................................19
   8.3     BINDING EFFECT OF DECISIONS........................................19
   8.4     INDEMNIFICATION OF COMMITTEE.......................................19

ARTICLE IX....................................................................20


AMENDMENT AND TERMINATION OF PLAN.............................................20

   9.1     AMENDMENT..........................................................20
   9.2     TERMINATION........................................................20


                                      -3-
<PAGE>   4

ARTICLE X.....................................................................21


MISCELLANEOUS.................................................................21

   10.1       FUNDING.........................................................21
   10.2       NONASSIGNABILITY................................................21
   10.3       LEGAL FEES AND EXPENSES.........................................21
   10.4       CAPTIONS........................................................22
   10.5       GOVERNING LAW...................................................22
   10.6       SUCCESSORS......................................................22
   10.7       RIGHT TO CONTINUED SERVICE......................................22

EXHIBIT A.....................................................................23


EXHIBIT B.....................................................................24


EXHIBIT C.....................................................................25





                                      -4-
<PAGE>   5


                                    ARTICLE I

                  1.1    STATEMENT OF PURPOSE

                  This is the Equitable Resources, Inc. Deferred Compensation
Plan (the "Plan") made in the form of this Plan and in related agreements
between the Employer and certain management or highly compensated employees. The
purpose of the Plan is to provide management and highly compensated employees of
the Employer with the option to defer the receipt of portions of their
compensation payable for services rendered to the Employer. It is intended that
the Plan will assist in attracting and retaining qualified individuals to serve
as officers and managers of the Employer. The Plan originally was effective as
of January 1, 1996, and subsequently was amended and restated effective as of
October 27, 1999.





                                      -5-
<PAGE>   6



                                   ARTICLE II

                                   DEFINITIONS
                                   -----------

                  When used in this Plan and initially capitalized, the
following words and phrases shall have the meanings indicated:

                  2.1      ACCOUNT.

                  "Account" means the sum of a Participant' s Deferral Account
and Matching Account.

                  2.2      BASE SALARY.

                  "Base Salary" means a Participant's base earnings paid by the
Employer to a Participant without regard to any increases or decreases in base
earnings as a result of an election to defer base earnings under this Plan or
(ii) an election between benefits or cash provided under a Plan of an Employer
maintained pursuant to Section 125 or 401(k) of the Code, and as limited in
Exhibit B attached hereto.

                  2.3      BENEFICIARY.

                  "Beneficiary" means the person or persons designated or deemed
to be designated by the Participant pursuant to Article VII to receive benefits
payable under the Plan in the event of the Participant's death.

                  2.4      BOARD.

                  "Board" means the Board of Directors of the Company.

                  2.5      BONUS.

                  "Bonus" means a Participant's bonus or sales commission paid
by the Employer to a Participant under the plans listed in Exhibit B attached
hereto and to the degree limited in Exhibit B, as applicable, without regard to
any decreases as a result of an election to defer all or any portion of a bonus
under this Plan or (ii) an election between benefits or cash provided under a
plan of the Employer maintained pursuant to Section 401(k) of the Code.

                  2.6      CHANGE IN CONTROL.

                  "Change in Control" means any of the following events:

                  (a) The sale or other disposition by the Company of all or
substantially all of its assets to a single purchaser or to a group of
purchasers, other than to a corporation with respect to which, following such
sale or disposition, more than eighty percent (80%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of the
Board of Directors is then owned beneficially, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company common stock and the combined
voting power of the then outstanding voting securities immediately prior to such
sale or disposition in substantially the same proportion as their ownership of
the outstanding Company common stock and voting power immediately prior to such
sale or disposition.


                                      -6-
<PAGE>   7

                  (b) The acquisition in one or more transactions by any person
or group, directly or indirectly, of beneficial ownership of twenty percent
(20%) or more of the outstanding shares of Company common stock or the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of the Board; provided, however, that any
acquisition by (x) the Company or any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its subsidiaries or (y) any person that is eligible, pursuant to Rule 13d-1(b)
under the Exchange Act (as such rule is in effect as of November 1, 1995) to
file a statement on Schedule 13G with respect to its beneficial ownership of
Company common stock and other voting securities whether or not such person
shall have filed a statement on Schedule 13G, unless such person shall have
filed a statement on Schedule 13D with respect to beneficial ownership of
fifteen percent (15%) or more of the Company's voting securities, shall not
constitute a Change of Control;

                  (c) The Company's termination of its business and liquidation
of its assets;

                  (d) The reorganization, merger or consolidation of the Company
into or with another person or entity, by which reorganization, merger or
consolidation the persons who hold one hundred percent (100%) of the voting
securities of the Company prior to such reorganization, merger or consolidation
receive or continue to hold less than sixty percent (60%) of the outstanding
voting shares of the new or continuing corporation; or

                  (e) If, during any two-year period, less than a majority of
the members of the Board are persons who were either (i) nominated or
recommended for election by at least two-thirds vote of the persons who were
members of the Board or Nominating Committee of the Board at the beginning of
the period, or (ii) elected by at least two-thirds vote of the persons who were
members of the Board at the beginning of the period.

                  2.7      CODE.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  2.8      COMMITTEE.

                  "Committee " has the meaning set forth in Section 8.1.

                  2.9      COMPANY.

                  "Company" means Equitable Resources, Inc. and any successor
thereto.

                  2.10     COMPENSATION.

                  "Compensation" means the Base Salary and Bonus payable with
respect to an Eligible Employee for each plan year.

                  2.11     CREDITED SERVICE.

                  "Credited Service" means the sum of all periods of a
Participant's employment by the Company or a Selected Affiliate for which
service credit is given under the Equitable Resources Pension Plan.


                                      -7-
<PAGE>   8

                  2.12     DEFERRAL ACCOUNT.

                  "Deferral Account" means the account maintained on the books
of the Employer for the purpose of accounting for the amount of Compensation
that each Participant elects to defer under the Plan and for the amount of
investment return credited thereto for each Participant pursuant to Article V.

                  2.13     DEFERRAL AMOUNT.

                  "Deferral Amount" means the Regular Deferral Amounts and
Special Bonus Deferral Amounts deferred by a Participant under Section 4.1.

                  2.14     DEFERRAL BENEFIT.

                  "Deferral Benefit" means the benefit payable to a Participant
or his or her Beneficiary pursuant to Article VI.

                  2.15     DEFERRAL ELECTION.

                  "Deferral Election" means the written election made by a
Participant to defer Compensation pursuant to Article IV.

                  2.16     DISABILITY.

                  "Disability" means a Participant's Disability as defined under
the Company's Long Term Disability Plan or its successors.

                  2.17     EARLY RETIREMENT.

                  "Early Retirement" will be granted by the Committee at its
sole discretion.

                  2.18     ELIGIBLE EMPLOYEE.

                  "Eligible Employee" means a highly compensated or management
employee of the Employer who is designated by the Committee, by name or group or
description, in accordance with Section 3.1 as, eligible to participate in the
Plan.

                  2.19     EMPLOYER.

                  "Employer" means, with respect to a Participant, the Company
or the Selected Affiliate which pays such Participant's Compensation.

                  2.20     HARDSHIP WITHDRAWAL.

                  "Hardship Withdrawal" has the meaning set forth in
Section 6.5.

                  2.21     INVESTMENT RETURN RATE.

                  "Investment Return Rate" means:

                  (a) In the case of an investment named in Exhibit C of a fixed
income nature, the interest deemed to be credited as determined in accordance
with the procedures applicable to the same investment option provided under the
Equitable Resources, Inc. Employee Savings Plan, originally adopted September 1,
1985, as amended ("EQUITABLE 401(k) PLAN");


                                      -8-
<PAGE>   9

                  (b) In the case of an investment named in Exhibit C of an
equity investment nature, the increase or decrease in deemed value and dividends
deemed to be credited as determined in accordance with the procedures applicable
to the same investment option provided under the Equitable 401(k) Plan; or

                  (c) In the case of the Equitable Resources Common Stock Fund,
the increase or decrease in the deemed value, and the reinvestment in the
Equitable Resources Common Stock Fund of any dividends deemed to be credited, as
determined in accordance with the procedures applicable to investments in the
Equitable Resources Common Stock Fund under the Equitable 401(k) Plan.

                  2.22     MATCHING ACCOUNT.

                  "Matching Account" means the account maintained on the books
of the Employer for the purpose of accounting for the Matching Amount and for
the amount of investment return credited thereto for each Participant pursuant
to Article V.

                  2.23     MATCHING AMOUNT.

                  "Matching Amount" means the Regular Matching Amounts and
Special Bonus Matching Amounts credited to a Participant's Matching Account
under Section 4.2.

                  2.24     PARTICIPANT.

                  "Participant" means any Eligible Employee who elects to
participate by filing a Participation Agreement or who is automatically enrolled
with respect to a Minimum Bonus Deferral Amount as provided in Section 3.2.

                  2.25     PARTICIPATION AGREEMENT.

                  "Participation Agreement" means the agreement filed by a
Participant, in the form prescribed by the Committee, pursuant to Section 3.2.

                  2.26     PLAN.

                  "Plan" means the Equitable Resources, Inc. Deferred
Compensation Plan, as amended from time to time.

                  2.27     PLAN YEAR.

                  "Plan Year" means a twelve-month period commencing January 1
and ending the following December 31.

                  2.28     REGULAR DEFERRAL AMOUNT.

                  "Regular Deferral Amount" means the amount of Compensation
deferred by a Participant under Section 4.1(a).

                  2.29     REGULAR MATCHING AMOUNT.

                  "Regular Matching Amount" means the amount credited to a
Participant's Company Matching Account under Section 4.2(a).

                  2.30     RETIREMENT.

                  "Retirement" means the termination of a Participant who has
reached age 65.


                                      -9-
<PAGE>   10

                  2.31     SELECTED AFFILIATE.

                  "Selected Affiliate" means (1) any company in an unbroken
chain of companies beginning with the Company if each of the companies other
than the last company in the chain owns or controls, directly or indirectly,
stock possessing not less than 50 percent of the total combined voting power of
all classes of stock in one of the other companies, or (2) any partnership or
joint venture in which one or more of such companies is a partner or venturer,
each of which shall be selected by the Committee.

                  2.32     SPECIAL BONUS DEFERRAL AMOUNT.

                  "Special Bonus Deferral Amount" means the sum of the Minimum
Bonus Deferral Amounts and the Discretionary Bonus Deferral Amounts deferred by
certain direct and indirect reports to the Chief Executive Officer of the
Company ("CEO") described in Section 4.1(b). "MINIMUM BONUS DEFERRAL AMOUNT"
shall refer to the 20% and 10%, as applicable, bonus deferrals described in
Section 4.1(b) which must be made by such direct and indirect reports to the
CEO. "DISCRETIONARY BONUS DEFERRAL AMOUNTS" shall refer to any additional bonus
deferrals made by such direct and indirect reports to the CEO in excess of the
Minimum Bonus Deferral Amount.

                  2.33     SPECIAL BONUS MATCHING AMOUNT.

                  "Special Bonus Matching Amount" means the amount credited to a
Participant's Matching Account under Section 4.2(b).

                  2.34     VALUATION DATE.

                  "Valuation Date" means a date on which the amount of a
Participant's Account is valued as provided in Article V. The Valuation Date
shall be the last day of each calendar quarter and any other date determined by
the Committee.





                                      -10-
<PAGE>   11



                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------

                  3.1      ELIGIBILITY.

                  Eligibility to participate in the Plan is limited to Eligible
Employees. From time to time, and subject to Section 3.4, the Committee shall
prepare, and attach to the Plan as Exhibit A, a complete list of the Eligible
Employees, by individual name or by reference to an identifiable group of
persons or by descriptions of the components of compensation of an individual
which would qualify individuals who are eligible to participate, and all of whom
shall be a select group of management or highly compensated employees.

                  3.2      PARTICIPATION.

                  (a) Regular Deferrals. Except as otherwise provided in (b),
participation in the Plan shall be limited to Eligible Employees who elect to
participate in the Plan by filing a Participation Agreement with the Committee.
An Eligible Employee shall commence participation in the Plan upon the first day
of his or her first payroll period following the receipt of his or her
Participation Agreement by the Committee.

                  (b) Minimum Bonus Deferral Amounts. Notwithstanding (a), an
Eligible Employee who is required to defer a Minimum Bonus Deferral Amount into
the Plan under Section 4.1(b) shall automatically become a Participant in the
Plan regardless of whether the Participant files a Participation Agreement.

                  3.3      CHANGE IN PARTICIPATION STATUS.

                  (a) Regular Deferral Amounts. Except as otherwise provided in
Section 3.2(b) and (b), below, a Participant may elect to terminate his or her
participation in the Plan at any time by filing a written notice thereof with
the Committee. A termination of participation with respect to Regular Deferral
Amounts will become effective as of the beginning of the next payroll period in
the month following receipt of the termination election by the Committee and in
accordance with the Committee's prevailing administrative procedures.

                  (b) Special Bonus Deferral Amounts. A termination of
participation with respect to Discretionary Bonus Deferral Amounts will become
effective as of the start of the next Bonus measurement period. A Participant
shall not be permitted to terminate the deferral of Minimum Bonus Deferral
Amounts.

                  (c) Amounts credited to such Participant's Account with
respect to periods prior to the effective date of a termination described in (a)
or (b) shall continue to be payable pursuant to, receive investment credit on,
and otherwise be governed by, the terms of the Plan.

                  3.4      INELIGIBLE PARTICIPANT.

                  Notwithstanding any other provisions of this Plan to the
contrary, if the Committee determines that any Participant may not qualify as a
"management or highly compensated employee" within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or regulations
thereunder, the Committee may determine, in its sole discretion, that such
Participant shall cease to be eligible to participate in this Plan. Upon such
determination, the Employer shall distribute (in cash and/or in kind, as
applicable) to the Participant an amount equal to the vested amount credited to
his Account as soon as administratively practicable. Upon such payment, no
benefit shall thereafter be payable under this Plan either to the Participant or
any Beneficiary, and all of the Participant's elections as to the time and
manner of payment of his Account will be deemed to be canceled.





                                      -11-
<PAGE>   12


                                   ARTICLE IV

                            DEFERRAL OF COMPENSATION
                            ------------------------

                  4.1      DEFERRAL AMOUNTS.

                  (a) Regular Deferral Amount. Subject to paragraph (b), below,
with respect to each Plan Year, a Participant may elect to defer a specified
percentage of his or her Compensation as provided in Exhibit B. A Participant
may change the percentage of his or her Compensation to be deferred by filing a
new Regular Deferral Election with the Committee. Any such change shall be
effective as of the first day of the Plan Year immediately following the Plan
Year in which such Deferral Election is filed with the Committee.

                  (b) Special Bonus Deferral Amount. Notwithstanding paragraph
(a), above, a Participant who reports directly to the Company's Chief Executive
Officer is required to defer at least twenty percent (20%) of his or her Bonus
and a Participant who reports directly to an executive who reports directly to
the Company's Chief Executive Officer is required to defer at least ten percent
(10%) of his or her Bonus, into the Plan (the "Minimum Bonus Deferral Amount").

                  (c) A Participant may change the percentage of his or her
Compensation to be deferred by filing a new Deferral Election with the
Committee. Notwithstanding anything in the preceding sentence to the contrary, a
Participant required to make a Minimum Bonus Deferral Amount shall not be
permitted to elect to make a change in a Special Bonus Deferral Election below
the Minimum Bonus Deferral Amount. Any permitted changes in deferral elections
shall be effective as of the first day of the Plan Year immediately following
the Plan Year in which such Deferral Election is filed with the Committee.

                  4.2      MATCHING AMOUNTS.

                  (a) Regular Matching Amount. Subject to paragraph (b), below,
if the Committee authorizes a Regular Matching Amount with respect to, and
preceding, any Plan Year(s), the Employer shall provide Regular Matching Amounts
under this Plan with respect to each Participant who is eligible to be allocated
matching contributions under the Savings Plan. The total Regular Matching
Amounts under this Plan on behalf of a Participant for each Plan Year shall not
exceed the difference between the matching percentage of the Compensation
deferred by a Participant under this Plan and of the Participant's pre-tax
elective deferrals for the Plan Year under the Savings Plan, less (ii) the
Employer matching contributions allocated to the Participant under the Savings
Plan for such Plan Year.

                  (b) Special Bonus Matching Amount. Notwithstanding paragraph
(a), above, a Participant who is required to defer a Minimum Bonus Deferral
Amount under Section 4.1(b) and who elects to defer a Discretionary Bonus
Deferral Amount shall be credited with a Special Bonus Matching Amount equal to
twenty-five one hundredths (.25) of one (1) share of the Common Stock of the
Company for every one (1) share of the Common Stock of the Company deemed to be
purchased under the Plan pursuant to Section 5.6 with the Discretionary Bonus
Deferral Amount. There shall be no limit on a Participant's Special Bonus
Matching Amount. Only Participants subject to the requirement to defer a Minimum
Bonus Deferral Amount shall be eligible to defer a Discretionary Bonus Deferral
Amount.

                  (c) Minimum Bonus Deferral Amounts shall not be credited with
any matching contributions under the Plan.


                                      -12-
<PAGE>   13

                  4.3      CREDITING OF DEFERRAL AMOUNTS AND MATCHING AMOUNTS.

                  Participant's Deferral Amounts shall be credited by the
Employer to the Participant's Deferral Account periodically, the frequency of
which will be determined by the Committee. To the extent that the Employer is
required to withhold any taxes or other amounts from a Participant's Deferral
Amounts pursuant to any state, federal or local law, such amounts shall be
withheld only from the Participant's Deferral Amounts before such amounts are
credited. The Matching Amounts under the Plan for each Participant shall be
credited by the Employer to the Participant's Matching Account periodically, the
frequency of which will be determined by the Committee.





                                      -13-
<PAGE>   14


                                    ARTICLE V

                                BENEFIT ACCOUNTS
                                ----------------

                  5.1      VALUATION OF ACCOUNT.

                  As of each Valuation Date, a Participant's Account shall
consist of the balance of the Participant's Account as of the immediately
preceding Valuation Date, plus the Participant's Deferral Amounts and Matching
Amounts credited pursuant to Sections 4.1 and 4.2 since the immediately
preceding Valuation Date, plus or minus investment gain or loss credited as of
such Valuation Date pursuant to Section 5.2, minus the aggregate amount of
distributions, if any, made from such Account since the immediately preceding
Valuation Date.

                  5.2      CREDITING OF INVESTMENT RETURN.

                  As of each Valuation Date, each Participant's Deferral Account
and Matching Account shall be increased or decreased by the amount of investment
gain or loss earned since the immediately preceding Valuation Date. Investment
return shall be credited at the Investment Return Rate as of such Valuation Date
based on the average balance of the Participant's Deferral Account and Matching
Account, respectively, since the immediately preceding Valuation Date, but after
such Accounts have been adjusted for any contributions or distributions to be
credited or deducted for such period. Investment return for the period prior to
the first Valuation Date applicable to a Deferral Account or a Matching Account
shall be deemed earned ratably over such period. Until a Participant or his or
her Beneficiary receives his or her entire Account, the unpaid balance thereof
shall earn an investment return as provided in this Section 5.2.

                  5.3      STATEMENT OF ACCOUNTS.

                  The Committee shall provide to each Participant, within 30
days after the close of each calendar quarter, a statement setting forth the
balance of such Participant's Account as of the last day of the preceding
calendar quarter and showing all adjustments made thereto during such calendar
quarter.

                  5.4      VESTING OF AMOUNTS.

                  Except as provided in Sections 10.1 and 10.2, a Participant
shall be 100% vested in the amounts credited to his or her Account in the event
of a Change in Control. Prior to a Change in Control, amounts credited to a
Participant's Deferral Account or Matching Account shall vest in accordance with
the following paragraphs of this Section 5.4.

                  (a) Regular Deferral Amounts. A Participant shall be 100%
vested in the Regular Deferral Amounts credited to his or her Deferral Account
at all times.

                  (b) Special Bonus Deferral Amounts. The Special Bonus Deferral
Amounts credited to a Participant's Deferral Account with respect to each Plan
Year shall vest in increments of fifty percent (50%); with the first 50% vesting
upon the completion of the first year of Credited Service following the Plan
Year to which the Special Bonus Deferral Amount relates and the remaining 50%
vesting upon the completion of the second year of Credited Service following
such Plan Year. Any nonvested portion of a Participant's Special Bonus Deferral
Amount shall be forfeited if the Participant voluntarily resigns from the
Company. Nonvested portions of a Participant's Bonus Deferral Amount shall be
paid to the Participant if the Participant is involuntarily terminated by the
Company.

                  (c) Regular Matching Amounts. A Participant's Regular Matching
Amounts shall vest in accordance with the vesting schedule for Company
Contributions under the Equitable 401(k) Plan.


                                      -14-
<PAGE>   15

                  (d) Special Bonus Matching Amounts. The Special Bonus Matching
Amounts credited to a Participant's Matching Account with respect to each Plan
Year shall vest in increments of thirty-three and one-third percent (33.3%);
with the first 33.3% vesting upon the completion of the first year of Credited
Service following the Plan Year to which the Special Bonus Matching Amount
relates and the two remaining portions vesting upon the completion of the second
and third years, respectively, of Credited Service following the Plan Year to
which the Special Bonus Matching Amount relates. Any nonvested portion of a
Participant's Special Bonus Matching Amount shall be forfeited if the
Participant terminates employment with the Company for any reason.

                  (e) Application of Forfeitures. Forfeitures under the Plan
shall be for the benefit of the Company and shall not be credited to other
Participants.

                  5.5      INVESTMENT OF REGULAR DEFERRAL AMOUNTS.

                  A Participant may direct that the portion of his or her
Deferral Account attributable to Regular Deferral Amounts under Section 4.1(a)
be deemed to be invested in one or more of the investment options listed in
Exhibit C, in increments of ten percent (10%) of the value of his or her Regular
Deferral Amount (a "New Money Election"). A Participant also may direct once
every month that Regular Deferral Amounts previously credited to his or her
Deferral Account and deemed to be invested in one or more of the investment
options listed in Exhibit C, be transferred in increments of ten percent (10%)
of the value of his or her Regular Deferral Amount between and among the then
available investment options listed in Exhibit C (a "Reallocation Election");
provided that a Participant may not reallocate Regular Deferral Amounts
previously credited to his or her Deferral Account and deemed to be invested in
the Equitable Resources Common Stock Fund. A New Money Election or a
Reallocation Election must be filed with the Committee in accordance with
uniform rules established by the Committee. A Reallocation Election shall not
change a Participant's existing New Money election.

                  The effective date of any New Money Election or Reallocation
Election shall be the date on which such election is received by the Committee
in accordance with uniform rules established by the Committee. The Company
reserves the right to refuse to honor any Participant direction related to
investments or withdrawals, including transfers among investment options, where
necessary or desirable to assure compliance with applicable law including U.S.
and other securities laws. However, the Company does not assume any
responsibility for compliance by officers or others with any such laws, and any
failure by the Company to delay or dishonor any such direction shall not be
deemed to increase the Company's legal exposure to the Participant or third
parties.

                  5.6      INVESTMENT OF SPECIAL BONUS DEFERRAL AMOUNTS AND
MATCHING AMOUNTS.

                  Notwithstanding anything in Section 5.5 to the contrary, a
Participant's Special Bonus Deferral Amounts under Section 4.1(b) and all
amounts credited to a Participant's Matching Account under Section 4.2 shall be
deemed to be invested in the Equitable Resources Common Stock Fund. A
Participant shall have no right to direct the investment of his Special Bonus
Deferral Amounts and the amounts to be credited to his Matching Account.




                                      -15-
<PAGE>   16


                                   ARTICLE VI

                               PAYMENT OF BENEFITS
                               -------------------

                  6.1      PAYMENT OF DEFERRAL BENEFIT UPON DEATH, DISABILITY OR
RETIREMENT.

                  Upon the death, Disability, Early Retirement, or Retirement of
a Participant, the Employer shall pay to the Participant or his Beneficiary a
Deferral Benefit equal to the balance of his or her vested Account determined
pursuant to Article V, less any amounts previously distributed, based on his
written election pursuant to Section 6.6.

                  6.2      PAYMENT OF DEFERRAL BENEFIT UPON TERMINATION.

                  Upon the termination of service of the Participant as an
employee of the Employer and all Selected Affiliates for reasons other than
death, Disability, or Retirement, the Employer shall pay to the Participant a
Deferral Benefit in a lump sum equal to the balance of his or her vested Account
determined pursuant to Article V, less any amounts previously distributed, as
soon as administratively practical.

                  6.3      PAYMENTS TO BENEFICIARIES.

                  In the event of the Participant's death prior to his or her
receipt of all elected annual installments, his or her Beneficiary will receive
the remaining annual installments at such times as such installments would have
become distributable to the Participant.

                  6.4      IN-SERVICE DISTRIBUTION.

                  A Participant may elect to receive an in-service distribution
of a portion or all of his or her vested Deferral Account only, beginning at any
time not less than one year after the end of the Plan Year in which such
Compensation was deferred. A Participant's election for an in-service
distribution shall be filed annually in writing with the Committee at the same
time his or her Deferral Election is made. The Participant may elect to receive
such in-service distribution in a lump sum only, the amount of which will be the
lesser of the distribution election for that year or the Deferral Account
balance attributable to that year's deferral. Any benefits paid to the
Participant as an in-service distribution shall reduce the amount of Deferral
Benefit otherwise payable to the Participant under the Plan.

                  6.5      HARDSHIP WITHDRAWAL.

                  In the event that the Committee, upon the written request of a
Participant, determines, in its sole discretion, that the Participant has
suffered an unforeseeable financial emergency, the Company shall pay to the
Participant, as soon as practicable following such determination, an amount
necessary to meet the emergency (the "Hardship Withdrawal"), but not exceeding
the aggregate balance of such Participant's vested Deferral Account as of the
date of such payment. For purposes of this Section 6.5, an "unforeseeable
financial emergency" shall mean an event that the Committee determines to give
rise to an unexpected need for cash arising from an illness, casualty loss,
sudden financial reversal or other such unforeseeable occurrence. The amount of
a Hardship Withdrawal may not exceed the amount the Committee reasonably
determines to be necessary to meet such emergency needs (including taxes
incurred by reason of a taxable distribution). The amount of the Deferral
Benefit otherwise payable under the Plan to such Participant shall be adjusted
to reflect the early payment of the Hardship Withdrawal.


                                      -16-
<PAGE>   17

                  6.6      FORM OF PAYMENT.

                  The Deferral Benefit payable pursuant to Section 6.1 shall be
paid in one of the following forms, as elected by the Participant in his or her
Participation Agreement on file as of one (1) year and one (1) day prior to the
date of termination or death:

                  (a) Annual payments of a fixed amount which shall amortize the
vested Account balance as of the payment commencement date over a period not to
exceed ten (10) years (together, in the case of each annual payment, with
interest thereon credited after the payment commencement date pursuant to
Section 5.2).

                  (b) A lump sum.

                  In the event a Participant fails to make a distribution
election, his or her vested Account balance shall be distributed in a lump sum.
Notwithstanding the foregoing, that portion of a Participant's Account
attributable to Special Bonus Deferral Amounts and all Matching Amounts shall be
paid in Common Stock of the Company, with any fractional shares paid in cash in
a lump sum.

                  6.7      COMMENCEMENT OF PAYMENTS.

                  Commencement of payments under Section 6.1 of the Plan shall
begin within 60 days following receipt of written notice by the Committee of an
event which entitles a Participant (or a Beneficiary) to payments under the
Plan.

                  6.8      SMALL BENEFIT.

                  In the event the Committee determines that the balance of a
Participant's vested Account is less than $3,500 at the time of commencement of
payments, or the portion of the balance of the Participant's vested Account
payable to any Beneficiary is less than $3,500 at the time of commencement of
payments, the Committee may inform the Employer and the Employer, in its
discretion, may choose to pay the benefit in the form of a lump sum payment,
notwithstanding any provision of the Plan or a Participant election to the
contrary. Such lump sum payment shall be equal to the balance of the
Participants vested Account or the portion thereof payable to a Beneficiary.



                                      -17-
<PAGE>   18


                                   ARTICLE VII

                             BENEFICIARY DESIGNATION
                             -----------------------

                  7.1      BENEFICIARY DESIGNATION.

                  Each Participant shall have the sole right, at any time, to
designate any person or persons as his Beneficiary to whom payment under the
Plan shall be made in the event of his or her death prior to complete
distribution to the Participant of his or her Account. Any Beneficiary
designation shall be made in a written instrument provided by the Committee. All
Beneficiary designations must be filed with the Committee and shall be effective
only when received in writing by the Committee. In the event that a Beneficiary
form has not been filed, the Beneficiary to whom payment has been designated
under the Savings Plan shall be used.

                  7.2      CHANGE OF BENEFICIARY DESIGNATION.

                  Any Beneficiary designation may be changed by a Participant by
the filing of a new Beneficiary designation, which will cancel all Beneficiary
designations previously filed. The designation of a Beneficiary may be made or
changed at any time without the consent of any person.

                  7.3      NO DESIGNATION.

                  If a Participant fails to designate a Beneficiary as provided
above, or if all designated Beneficiaries predecease the Participant, then the
Participant's designated Beneficiary shall be deemed to be the Participant's
estate.

                  7.4      EFFECT OF PAYMENT.

                  Payment to a Participant's Beneficiary (or, upon the death of
a primary Beneficiary, to the contingent Beneficiary or, if none, to the
Participant's estate) shall completely discharge the Employer's obligations
under the Plan.





                                      -18-
<PAGE>   19


                                  ARTICLE VIII

                                 ADMINISTRATION
                                 --------------

                  8.1      COMMITTEE.

                  The administrative committee for the Plan (the "Committee")
shall be those members of the Employee Pension Committee as long as there are at
least three such members. If there are not at least three such non-participating
persons on the Committee, the Chief Executive Officer of the Company shall
appoint other Company officers to serve on the Committee. The Committee shall
have complete discretion to i) supervise the administration and operation of the
Plan, ii) adopt rules and procedures governing the Plan from time to time and
iii) shall have authority to give interpretive rulings with respect to the Plan.

                  8.2      AGENTS.

                  The Committee may appoint an individual, who may be an
employee of the Company, to be the Committee's agent with respect to the
day-to-day administration of the Plan. In addition, the Committee may, from time
to time, employ other agents and delegate to them such administrative duties as
it sees fit, and may from time to time consult with counsel who may be counsel
to the Company.

                  8.3      BINDING EFFECT OF DECISIONS.

                  Any decision or action of the Committee with respect to any
question arising out of or in connection with the administration, interpretation
and application of the Plan shall be final and binding upon all persons having
any interest in the Plan.

                  8.4      INDEMNIFICATION OF COMMITTEE.

                  The Company shall indemnify and hold harmless the members of
the Committee and their duly appointed agents under Section 8.2 against any and
all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to the Plan, except in the case of gross negligence
or willful misconduct by any such member or agent of the Committee.





                                      -19-
<PAGE>   20



                                   ARTICLE IX

                        AMENDMENT AND TERMINATION OF PLAN
                        ---------------------------------

                  9.1      AMENDMENT.

                  The Company, on behalf of itself and of each Selected
Affiliate may at any time amend, suspend or reinstate any or all of the
provisions of the Plan, except that no such amendment, suspension or
reinstatement may adversely affect any Participant's Account, as it existed as
of the day before the effective date of such amendment, suspension or
reinstatement, without such Participant's prior written consent. Written notice
of any amendment or other action with respect to the Plan shall be given to each
Participant.

                  9.2      TERMINATION.

                  The Company, on behalf of itself and of each Selected
Affiliate, in its sole discretion, may terminate this Plan at any time and for
any reason whatsoever. Upon termination of the Plan, Participants shall be 100%
vested in all amounts credited to their Accounts. On and after Plan termination,
the Committee shall take those actions necessary to administer any Accounts
existing prior to the effective date of such termination; provided, however,
that a termination of the Plan shall not adversely affect the value of a
Participants Account, the crediting of investment return under Section 5.2 or
the timing or method of distribution of a Participant' s Account, without the
Participant's prior written consent.





                                      -20-
<PAGE>   21


                                    ARTICLE X

                                  MISCELLANEOUS
                                  -------------

                  10.1     FUNDING.

                  Participants, their Beneficiaries, and their heirs, successors
and assigns, shall have no secured interest or claim in any property or assets
of the Employer. The Employer's obligation under the Plan shall be merely that
of an unfunded and unsecured promise of the Employer to pay money in the future.
Notwithstanding the foregoing, in the event of a Change in Control, the Company
shall create an irrevocable trust, or before such time the Company may create an
irrevocable or revocable trust, to hold funds to be used in payment of the
obligations of Employers under the Plan. In the event of a Change in Control or
prior thereto, the Employers shall fund such trust in an amount equal to not
less than the total value of the Participants' Accounts under the Plan as of the
Valuation Date immediately preceding the Change in Control, provided that any
funds contained therein shall remain liable for the claims of the respective
Employer's general creditors.

                  10.2     NONASSIGNABILITY.

                  No right or interest under the Plan of a Participant or his or
her Beneficiary (or any person claiming through or under any of them) shall be
assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance or other legal process or in any manner
be liable for or subject to the debts or liabilities of any such Participant or
Beneficiary. If any Participant or Beneficiary shall attempt to or shall
transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his
or her benefits hereunder or any part thereof, or if by reason of his or her
bankruptcy or other event happening at any time such benefits would devolve upon
anyone else or would not be enjoyed by him or her, then the Committee, in its
discretion, may terminate his or her interest in any such benefit (including the
Deferral Account) to the extent the Committee considers necessary or advisable
to prevent or limit the effects of such occurrence. Termination shall be
effected by filing a written "termination declaration" with the Clerk of the
Company and making reasonable efforts to deliver a copy to the Participant or
Beneficiary whose interest is adversely affected (the "Terminated Participant").

                  As long as the Terminated Participant is alive, any benefits
affected by the termination shall be retained by the Employer and, in the
Committee's sole and absolute judgment, may be paid to or expended for the
benefit of the Terminated Participant, his or her spouse, his or her children or
any other person or persons in fact dependent upon him or her in such a manner
as the Committee shall deem proper. Upon the death of the Terminated
Participant, all benefits withheld from him or her and not paid to others in
accordance with the preceding sentence shall be disposed of according to the
provisions of the Plan that would apply if he or she died prior to the time that
all benefits to which he or she was entitled were paid to him or her.

                  10.3     LEGAL FEES AND EXPENSES.

                  It is the intent of the Company and each Selected Affiliate
that no Eligible Employee or former Eligible Employee be required to incur the
expenses associated with the enforcement of his or her rights under this Plan by
litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to an Eligible
Employee hereunder. Accordingly, if after a Change in Control it should appear
that the Employer has failed to comply with any of its obligations under this
Plan or in the event that the Employer or any other person takes any action to
declare this Plan void or unenforceable, or institutes any litigation designed
to deny, or to recover from, the Eligible Employee the benefits intended to be
provided to such Eligible Employee hereunder, the Employer irrevocably
authorizes such Eligible Employee from time to time to retain counsel of his or
her choice, at the

                                      -21-
<PAGE>   22

expense of the Employer as hereafter provided, to represent such Eligible
Employee in connection with the initiation or defense of any litigation or other
legal action, whether by or against the Employer or any director, officer,
stockholder or other person affiliated with the Employer in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Employer and such counsel, the Employer irrevocably consents to such Eligible
Employee's entering into an attorney-client relationship with such counsel, and
in that connection the Employer and such Eligible Employee agree that a
confidential relationship shall exist between such Eligible Employee and such
counsel, The Employer shall pay and be solely responsible for any and all
attorneys' and related fees and expenses incurred by such Eligible Employee as a
result of the Employer's failure to perform under this Plan or any provision
thereof; or as a result of the Employer or any person contesting the validity or
enforceability of this Plan or any provision thereof.

                  10.4     CAPTIONS.

                  The captions contained herein are for convenience only and
shall not control or affect the meaning or construction hereof.

                  10.5     GOVERNING LAW.

                  The provisions of the Plan shall be construed and interpreted
according to the laws of the Commonwealth of Pennsylvania.

                  10.6     SUCCESSORS.

                  The provisions of the Plan shall bind and inure to the benefit
of the Company, its Selected Affiliates, and their respective successors and
assigns. The term successors as used herein shall include any corporate or other
business entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of the
Company or a Selected Affiliate and successors of any such Company or other
business entity.

                  10.7     RIGHT TO CONTINUED SERVICE.

                  Nothing contained herein shall be construed to confer upon any
Eligible Employee the right to continue to serve as an Eligible Employee of the
Employer or in any other capacity.

EXECUTED THIS 1ST DAY OF JANUARY, 1996.

                                            EQUITABLE-RESOURCES INC.



                                            BY: GREGORY R. SPENCER


                                            TITLE VICE PRESIDENT HUMAN RESOURCES
                                            AND ADMINISTRATION




                                      -22-
<PAGE>   23


                                    EXHIBIT A
                                    ---------

RE:  SECTION 3.1 - DESCRIPTION OF ELIGIBLE EMPLOYEES
----------------------------------------------------

Date: January 1, 1996.

THE COMMITTEE HAS DETERMINED THAT THE FOLLOWING NAMED INDIVIDUALS OR GROUPS OF
PERSONS OR DESCRIPTIONS OF THE COMPONENTS OF COMPENSATION OF AN INDIVIDUAL WHICH
WOULD QUALIFY INDIVIDUALS WHICH ARE ELIGIBLE TO PARTICIPATE IN THE PLAN AS
ELIGIBLE EMPLOYEES:

                  Employees classified in Company salary grade 19 and above





                                      -23-
<PAGE>   24


                                    EXHIBIT B
                                    ---------

RE:  SECTION 4.1 - AMOUNT OF DEFERRAL
-------------------------------------

Dated: January 1, 1996

AS OF THE DATE ABOVE, AND EFFECTIVE UNTIL THIS EXHIBIT IS MODIFIED BY THE
COMMITTEE, THE TABLE BELOW INDICATES THE TYPES OF COMPENSATION WHICH ARE
ELIGIBLE FOR INCOME DEFERRAL AT THE ASSIGNED PERCENTAGES AS NOTED:




TYPE OF COMPENSATION       MAXIMUM PERCENTAGE          OTHER LIMITATIONS
                          THAT CAN BE DEFERRED

Base Salary                        N/A              Any amount over IRS limit
--------------------------------------------------------------------------------

Bonus                              100%             In increments of 10% or the
                                                    entire amount of the Bonus
                                                    awarded in excess of a
                                                    stated dollar amount.
--------------------------------------------------------------------------------



                                      -24-
<PAGE>   25



                                    EXHIBIT C
                                    ---------

RE:  SECTION 2.21 - INVESTMENT RETURN RATE
------------------------------------------

The investment account equivalents to be used in determining the Investment Rate
of Return shall be those investment options provided under the Equitable
Resources, Inc. Employee Savings Plan ("Equitable 401(k) Plan") during any
period of reference.