Document:

EX10-12

Exhibit 10.12

__________

 

 

 

 

 

 

2010 STOCK INCENTIVE PLAN

 

 

 

 

 

For:

 

URANIUM INTERNATIONAL CORP.

 

Dated April 5, 2010

 

 

 

 

 

Uranium International Corp.

15710 W. Colfax Avenue, Suite 201, Golden, Colorado, U.S.A., 80401

__________

 

URANIUM INTERNATIONAL CORP.

2010 STOCK INCENTIVE PLAN

 

1.                    PURPOSE

1.1                  The purpose of this Stock Incentive Plan (the "Plan") is to advance the interests of Uranium International Corp. (the "Company") by encouraging Eligible Participants (as herein defined) to acquire shares of the Company, thereby increasing their proprietary interest in the Company, encouraging them to remain associated with the Company and furnish them with additional incentive in their efforts on behalf of the Company in the conduct of their affairs.

1.2                  This Plan is specifically designed for Eligible Participants of the Company who are residents of the United States and/or subject to taxation in the United States, although Awards (as herein defined) under this Plan may be issued to other Eligible Participants.

1.3                  This Plan supersedes and replaces, in its entirety, each of the Company's prior "2008 Stock Option Plan", dated as originally ratified by the Board of Directors of the Company on April 2, 2008, and the Company's prior "2009 Stock Option Plan", dated as originally ratified by the Board of Directors of the Company on April 16, 2009, except that any "Awards" theretofore granted by the Company under each of its prior 2008 Stock Option Plan and 2009 Stock Option Plan are necessarily brought forward by the Company and covered now by the terms and conditions of this Plan.

2.                     DEFINITIONS

2.1                  As used herein, the following definitions shall apply:
(a)        "Administrator" means the Committee or otherwise the Board; 

(b)        "Affiliate" and "Associate" have the meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act;

(c)        "Applicable Laws" means the legal requirements relating to the administration of stock incentive plans, if any, under applicable provisions of federal securities laws, state corporate laws, state or provincial securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents therein;

(d)        "Award" means the grant of an Option, SAR, Restricted Stock, unrestricted Shares, Restricted Stock Unit, Deferred Stock Unit or other right or benefit under this Plan; 

(e)        "Award Agreement" means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any amendments thereto;

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(f)        "Award Right" means each right to acquire a Share pursuant to an Award;

(g)        "Board" means the Board of Directors of the Company;

(h)        "Cause" means, with respect to the termination by the Company or a Related Entity of the Grantee's Continuous Service, that such termination is for "Cause" as such term is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity or, in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee's:
(i)        refusal or failure to act in accordance with any specific, lawful direction or order of the Company or a Related Entity;

(ii)       unfitness or unavailability for service or unsatisfactory performance (other than as a result of Disability);

(iii)      performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity;

(iv)       dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or

(v)        commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person;

(i)        "Change of Control" means, except as provided below, a change in ownership or control of the Company effected through any of the following transactions:
(i)        the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than 50% of the total combined voting power of the Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company's shareholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such shareholders accept;

(ii)       a change in the composition of the Board over a period of 36 months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors; 

(iii)      the sale or exchange by the Company (in one or a series of transactions) of all or substantially all of its assets to any other person or entity; or

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 (iv)       approval by the shareholders of the Company of a plan to dissolve and liquidate the Company. 

Notwithstanding the foregoing, the following transactions shall not constitute a "Change of Control":

(i)        the closing of any public offering of the Company's securities pursuant to an effective registration statement filed under the United States Securities Act of 1933, as amended;

(ii)       the closing of a public offering of the Company's securities through the facilities of any stock exchange; or

(iii)      with respect to an Award that is subject to Section 409A of the Code, and payment or settlement of such Award is to be accelerated in connection with an event that would otherwise constitute a Change of Control, no event set forth previously in this definition shall constitute a Change of Control for purposes of this Plan or any Award Agreement unless such event also constitutes a "change in the ownership", a "change in the effective control" or a "change in the ownership of a substantial portion of the assets of the corporation" as defined under Section 409A of the Code and Treasury guidance formulated thereunder, which guidance currently provides that:
(A)        a change in ownership of a corporation shall be deemed to have occurred if any one person or more than one person acting as a group acquires stock of a corporation that constitutes more than 50% of the total Fair Market Value or total voting power of the stock of the corporation. Stock acquired by any person or group of people who already owns more than 50% of such total Fair Market Value or total voting power of stock shall not trigger a change in ownership;

(B)        a change in the effective control of a corporation generally shall be deemed to have occurred if within a 12-month period either: 
(I)        any one person or more than one person acting as a group acquires ownership of stock possessing 35% or more of the total voting power of the stock of the corporation; or 

(II)       a majority of the members of the corporation's board of directors is replaced by directors whose appointment or election is not endorsed by a majority of the members of the corporation's board of directors prior to the date of the appointment or election; and

(C)        a change in the ownership of a substantial portion of the corporation's assets generally is deemed to occur if within a 12-month period any person, or more than one person acting as a group, acquires assets from the corporation that have a total gross fair market value at least equal to 40% of the total gross fair market value of all the corporation's assets immediately prior to such acquisition.  The gross fair market value of assets is determined without regard to any liabilities;

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(j)        "Code" means the United States Internal Revenue Code of 1986, as amended;

(k)        "Committee" means the Compensation Committee or any other committee appointed by the Board to administer this Plan in accordance with the provisions of this Plan; provided, however, that:
(i)        the Committee shall consist of two or more members of the Board;

(ii)       the directors appointed to serve on the Committee shall be "non-employee directors" (within the meaning of Rule 16b-3 promulgated under the Exchange Act) and "outside directors" (within the meaning of Section 162(m) of the Code) to the extent that Rule 16b-3 and, if necessary for relief from the limitation under Section 162(m) of the Code and such relief is sought by the Company, Section 162(m) of the Code, respectively, are applicable;

(iii)      the mere fact that a Committee member shall fail to qualify under either of the foregoing requirements set forth in Section 2.1(k)(ii) shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan; and

(iv)       members of the Committee may be appointed from time to time by, and shall serve at the pleasure of, the Board;

(l)        "Common Stock" means the common stock of the Company;

(m)        "Company" means Uranium International Corp., a Nevada corporation;

(n)        "Consultant" means any person (other than an Employee) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity;

(o)        "Continuing Directors" means members of the Board who either (i) have been Board members continuously for a period of at least 36 months, or (ii) have been Board members for less than 36 months and were appointed or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such appointment or nomination was approved by the Board;

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(p)        "Continuous Service" means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director or Consultant that is not interrupted or terminated. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers between locations of the Company or among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, maternity or paternity leave, military leave, or any other authorized personal leave. For purposes of Incentive Stock Options, no such leave may exceed 90 calendar days, unless reemployment upon expiration of such leave is guaranteed by statute or contract;

(q)        "Corporate Transaction" means any of the following transactions:
(i)        a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is organized;

(ii)       the sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company's subsidiary corporations) in connection with the complete liquidation or dissolution of the Company; or

(iii)      any reverse merger in which the Company is the surviving entity but in which securities possessing more than 50% of the total combined voting power of the Company's outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger;

(r)        "Covered Employee" means an Employee who is a "covered employee" under Section 162(m)(3) of the Code;

(s)        "Deferred Stock Units" means Awards that are granted to Directors and are subject to the additional provisions set out in Subpart A which is attached hereto and which forms a material part hereof;

(t)        "Director" means a member of the Board or the board of directors of any Related Entity;

(u)        "Disability" or "Disabled" means that a Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determinable physical or mental impairment.  A Grantee shall not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.  Notwithstanding the above, (i) with respect to an Incentive Stock Option, Disability or Disabled shall mean permanent and total disability as defined in Section 22(e)(3) of the Code and (ii) to the extent an Option is subject to Section 409A of the Code, and payment or settlement of the Option is to be accelerated solely as a result of the Eligible Participant's Disability, Disability shall have the meaning ascribed thereto under Section 409A of the Code and the Treasury guidance promulgated thereunder;

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(v)        "Disinterested Shareholder Approval" means approval by a majority of the votes cast by all the Company's shareholders at a duly constituted shareholders' meeting, excluding votes attached to shares beneficially owned by Insiders;

(w)        "Eligible Participant" means any person who is an Officer, a Director, an Employee or a Consultant, including individuals who are foreign nationals or are employed or reside outside the United States;

(x)        "Employee" means any person who is a full-time or part-time employee of the Company or any Related Entity;

(y)        "Exchange Act" means the United States Securities Exchange Act of 1934, as amended;

(z)        "Fair Market Value" means, as of any date, the value of a Share determined in good faith by the Administrator.  By way of illustration, but not limitation, for the purpose of this definition, good faith shall be met if the Administrator employs the following methods:
(i)        Listed Stock. If the Common Stock is traded on any established stock exchange or quoted on a national market system, Fair Market Value shall be (A) the closing sales price for the Common Stock as quoted on that stock exchange or system for the date the value is to be determined (the "Value Date") as reported in The Wall Street Journal or a similar publication, or (B) if the rules of the applicable stock exchange require, the volume-weighted average trading price for five days prior to the date the Board approves the grant of the Award.  If no sales are reported as having occurred on the Value Date, Fair Market Value shall be that closing sales price for the last preceding trading day on which sales of Common Stock is reported as having occurred.  If no sales are reported as having occurred during the five trading days before the Value Date, Fair Market Value shall be the closing bid for Common Stock on the Value Date.  If the Common Stock is listed on multiple exchanges or systems, Fair Market Value shall be based on sales or bids on the primary exchange or system on which Common Stock is traded or quoted.  If the rules of any applicable stock exchange or system require a different method of calculating Fair Market Value, then such method as is required by those rules;

(ii)       Stock Quoted by Securities Dealer. If Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported on any established stock exchange or quoted on a national market system, Fair Market Value shall be the mean between the high bid and low asked prices on the Value Date.  If no prices are quoted for the Value Date, Fair Market Value shall be the mean between the high bid and low asked prices on the last preceding trading day on which any bid and asked prices were quoted;

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(iii)      No Established Market. If Common Stock is not traded on any established stock exchange or quoted on a national market system and is not quoted by a recognized securities dealer, the Administrator will determine Fair Market Value in good faith.  The Administrator will consider the following factors, and any others it considers significant, in determining Fair Market Value: (A) the price at which other securities of the Company have been issued to purchasers other than Employees, Directors, or Consultants; (B) the Company's net worth, prospective earning power, dividend-paying capacity, and non-operating assets, if any; and (C) any other relevant factors, including the economic outlook for the Company and the Company's industry, the Company's position in that industry, the Company's goodwill and other intellectual property, and the values of securities of other businesses in the same industry;

(iv)       Additional Valuation.  For publicly traded companies, any valuation method permitted under Section 20.2031-2 of the Estate Tax Regulations; or

(v)        Non-Publicly Traded Stock.  For non-publicly traded stock, the Fair Market Value of the Common Stock at the Grant Date based on an average of the Fair Market Values as of such date set forth in the opinions of completely independent and well-qualified experts (the Participant's status as a majority or minority shareholder may be taken into consideration).

Regardless of whether the Common Stock offered under the Award is publicly traded, a good faith attempt under this definition shall not be met unless the Fair Market Value of the Common Stock on the Grant Date is determined with regard to nonlapse restrictions (as defined in Section 1.83-3(h) of the Treasury Regulations) and without regard to lapse restrictions (as defined in Section 1.83-3(i) of the Treasury Regulations);

(aa)      "Grantee" means an Eligible Participant who receives an Award pursuant to an Award Agreement;

(bb)      "Grant Date" means the date the Administrator approves that grant of an Award.  However, if the Administrator specifies that an Award's Grant Date is a future date or the date on which a condition is satisfied, the Grant Date for such Award is that future date or the date that the condition is satisfied;

(cc)      "Incentive Stock Option" means an Option within the meaning of Section 422 of the Code;

(dd)      "Insider" means:

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(i)        a Director or Senior Officer of the Company;

(ii)       a Director or Senior Officer of a person that is itself an Insider or Subsidiary of the Company;

(iii)      a person that has
(A)        direct or indirect beneficial ownership of, 

(B)        control or direction over, or

(C)        a combination of direct or indirect beneficial ownership of and control or direction over,

securities of the Company carrying more than 10% of the voting rights attached to all the Company's outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the person as underwriter in the course of a distribution; or 

(iv)       the Company itself, if it has purchased, redeemed or otherwise acquired any securities of its own issue, for so long as it continues to hold those securities;

(ee)      "Named Executive Officer" means, if applicable, an Eligible Participant who, as of the date of vesting and/or payout of an Award, is one of the group of Covered Employees as defined;

(ff)      "Non-Qualified Stock Option" means an Option which is not an Incentive Stock Option;

(gg)      "Officer" means a person who is an officer, including a Senior Officer, of the Company or a Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder;

(hh)      "Option" means an option to purchase Shares pursuant to an Award Agreement granted under the Plan;

(ii)      "Parent" means a "parent corporation", whether now or hereafter existing, as defined in Section 424(e) of the Code;

(jj)      "Performance-Based Compensation" means compensation qualifying as "performance-based compensation" under Section 162(m) of the Code;

(kk)      "Plan" means this 2010 Stock Incentive Plan as amended from time to time;

(ll)      "Related Entity" means any Parent or Subsidiary, and includes any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or a Subsidiary holds a greater than 50% ownership interest, directly or indirectly;

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(mm)      "Related Entity Disposition" means the sale, distribution or other disposition by the Company of all or substantially all of the Company's interests in any Related Entity effected by a sale, merger or consolidation or other transaction involving that Related Entity or the sale of all or substantially all of the assets of that Related Entity;

(nn)      "Restricted Stock" means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as, established by the Administrator and specified in the related Award Agreement;

(oo)      "Restricted Stock Unit" means a notional account established pursuant to an Award granted to a Grantee, as described in this Plan, that is (i) valued solely by reference to Shares, (ii) subject to restrictions specified in the Award Agreement, and (iii) payable only in Shares; 

(pp)      "Restriction Period" means the period during which the transfer of Shares of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance objectives, or the occurrence of other events as determined by the Administrator, in its sole discretion) or the Restricted Stock is not vested; 

(qq)      "SAR" means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured by appreciation in the value of Common Stock;

(rr)      "SEC" means the United States Securities Exchange Commission;

(ss)      "Senior Officer" means:
(i)        the chair or vice chair of the Board, the president, the chief executive officer, the chief financial officer, a vice-president, the secretary, the treasurer or the general manager of the Company or a Related Entity;

(ii)       any individual who performs functions for a person similar to those normally performed by an individual occupying any office specified in Section 2.1(ss)(i) above; and

(iii)      the five highest paid employees of the Company or a Related Entity, including any individual referred to in Section 2.1(ss)(i) or 2.1(ss)(ii) and excluding a commissioned salesperson who does not act in a managerial capacity;

(tt)      "Share" means a share of the Common Stock; and

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(uu)      "Subsidiary" means a "subsidiary corporation", whether now or hereafter existing, as defined in Section 424(f) of the Code.

3.                   STOCK SUBJECT TO THE PLAN

                      Number of Shares Available

3.1
(a)        Subject to the provisions of Section 18, the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Stock Options) under this Plan is 10,000,000 (the "Maximum Number").  See Section 29 for Reservation of Shares.

(b)        Shares that have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan except that Shares (i) covered by an Award (or portion of an Award) which is forfeited or cancelled, expires or is settled in cash, or (ii) withheld to satisfy a Grantee's minimum tax withholding obligations, shall be deemed not to have been issued for purposes of determining the Maximum Number of Shares which may be issued under the Plan.  Also, only the net numbers of Shares that are issued pursuant to the exercise of an Award shall be counted against the Maximum Number.

(c)        However, in the event that prior to the Award's cancellation, termination, expiration, forfeiture or lapse, the holder of the Award at any time received one or more elements of beneficial ownership pursuant to such Award (as defined by the SEC, pursuant to any rule or interpretations promulgated under Section 16 of the Exchange Act), the Shares subject to such Award shall not again be made available for regrant under the Plan.

                      Shares to Insiders

3.2                  Subject to Section 15.1(b) and 15.1(c), no Insider of the Company is eligible to receive an Award where:
(a)        the Insider is not a Director or Senior Officer of the Company;

(b)        any Award, together with all of the Company's other previously established or proposed Awards under the Plan could result at any time in:
(i)        the number of Shares reserved for issuance pursuant to Options granted to Insiders exceeding 50% of the outstanding issue of Common Stock; or

(ii)       the issuance to Insiders pursuant to the exercise of Options, within a one year period of a number of Shares exceeding 50% of the outstanding issue of the Common Stock;

provided, however, that this restriction on the eligibility of Insiders to receive an Award shall cease to apply if it is no longer required under any Applicable Laws.

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                      Limitations on Award

3.3                  Unless and until the Administrator determines that an Award to a Grantee is not designed to qualify as Performance-Based Compensation, the following limits (the "Award Limits") shall apply to grants of Awards to Grantees subject to the Award Limits by Applicable Laws under this Plan: 
(a)        Options and SARs.  Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Section 18), the maximum number of Shares with respect to one or more Options and/or Stock Appreciation Rights that may be granted during any one calendar year under the Plan to any one Grantee shall be 5,000,000; all of which may be granted as Incentive Stock Options); and

(b)        Other Awards.  The maximum aggregate grant with respect to Awards of Restricted Stock, unrestricted Shares, Restricted Stock Units and Deferred Stock Units (or used to provide a basis of measurement for or to determine the value of Restricted Stock Units and Deferred Stock Units) in any one calendar year to any one Grantee (determined on the date of payment of settlement) shall be 5,000,000.

4.                     ADMINISTRATION

                      Authority of Plan Administrator

4.1                  Authority to control and manage the operation and administration of this Plan shall be vested in the Administrator.

                      Powers of the Administrator

4.2                  Subject to Applicable Laws and the provisions of the Plan or subplans hereof (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the exclusive power and authority, in its discretion:         
(a)        to construe and interpret this Plan and any agreements defining the rights and obligations of  the Company and Grantees under this Plan; 

(b)        to select the Eligible Participants to whom Awards may be granted from time to time hereunder;

(c)        to determine whether and to what extent Awards are granted hereunder;

(d)        to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder; 

(e)        to approve forms of Award Agreements for use under the Plan, which need not be identical for each Grantee;

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(f)        to determine the terms and conditions of any Award granted under the Plan, including, but not limited to, the exercise price, grant price or purchase price based on the Fair Market Value of the same, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of the Award, and acceleration or waivers thereof, based in each case on such considerations as the Committee in its sole discretion determines that is not inconsistent with any rule or regulation under any tax or securities laws or includes an alternative right that does not disqualify an Incentive Stock Option under applicable regulations;

(g)        to amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the Grantee's rights under an existing Award shall not be made without the Grantee's consent unless as a result of a change in Applicable Law; 

(h)        to suspend the right of a holder to exercise all or part of an Award for any reason that the Administrator considers in the best interest of the Company;

(i)        subject to regulatory approval, amend or suspend the Plan, or revoke or alter any action taken in connection therewith, except that no general amendment or suspension of the Plan, shall, without the written consent of all Grantees, alter or impair any Award granted under the Plan unless as a result of a change in the Applicable Law;

(j)        to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions and to afford Grantees favorable treatment under such laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan; 

(k)        to further define the terms used in this Plan; 

(l)        to correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award Agreement; 

(m)        to provide for rights of refusal and/or repurchase rights; 

(n)        to amend outstanding Award Agreements to provide for, among other things, any change or modification which the Administrator could have provided for upon the grant of an Award or in furtherance of the powers provided for herein that does not disqualify an Incentive Stock Option under applicable regulations unless the Grantee so consents;

(o)        to prescribe, amend and rescind rules and regulations relating to the administration of this Plan; and 

(p)        to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

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                      Effect of Administrator's Decision

4.3                  All decisions, determinations and interpretations of the Administrator shall be conclusive and binding on all persons.  The Administrator shall not be liable for any decision, action or omission respecting this Plan, or any Awards granted or Shares sold under this Plan.  In the event an Award is granted in a manner inconsistent with the provisions of this Section 4, such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.

                      Action by Committee

4.4                  Except as otherwise provided by committee charter or other similar corporate governance documents, for purposes of administering the Plan, the following rules of procedure shall govern the Committee.  A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved unanimously in writing by the members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee.  Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Parent or Affiliate, the Company's independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

                      Limitation on Liability

4.5                  To the extent permitted by applicable law in effect from time to time, no member of the Administrator shall be liable for any action or omission of any other member of the Administrator nor for any act or omission on the member's own part, excepting only the member's own wilful misconduct or gross negligence, arising out of or related to this Plan.  The Company shall pay expenses incurred by, and satisfy a judgment or fine rendered or levied against, a present or former member of the Administrator in any action against such person (whether or not the Company is joined as a party defendant) to impose liability or a penalty on such person for an act alleged to have been committed by such person while a member of the Administrator arising with respect to this Plan or administration thereof or out of membership on the Administrator or by the Company, or all or any combination of the preceding, provided, the member was acting in good faith, within what such member reasonably believed to have been within the scope of his or her employment or authority and for a purpose which he or she reasonably believed to be in the best interests of the Company or its stockholders.  Payments authorized hereunder include amounts paid and expenses incurred in settling any such action or threatened action.  The provisions of this Section 4.5 shall apply to the estate, executor, administrator, heirs, legatees or devisees of a member of the Administrator, and the term "person" as used on this Section 4.5 shall include the estate, executor, administrator, heirs, legatees, or devisees of such person.

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5.                     ELIGIBILITY

                      Except as otherwise provided, all types of Awards may be granted to Eligible Participants. An Eligible Participant who has been granted an Award may be, if he or she continues to be eligible, granted additional Awards.

6.                     AWARDS

                      Type of Awards

6.1                  The Administrator is authorized to award any type of arrangement to an Eligible Participant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of:
(a)        Shares, including unrestricted Shares; 

(b)        Options;

(c)        SARs or similar rights with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions;

(d)        any other security with the value derived from the value of the Shares, such as Restricted Stock and Restricted Stock Units;

(e)        Deferred Stock Units;

(f)        Dividend Equivalent Rights, as defined in Section 13; or

(g)        any combination of the foregoing.

                      Designation of Award

6.2                  Each type of Award shall be designated in the Award Agreement.  In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option.  But see Section 7.3(a) regarding exceeding the Incentive Stock Option threshold.

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7.                     GRANT OF OPTIONS; TERMS AND CONDITIONS OF GRANT

                      Grant of Options

7.1
(a)        One or more Options may be granted to any Eligible Participant.  Subject to the express provisions of this Plan, the Administrator shall determine from the Eligible Participants those individuals to whom Options under this Plan may be granted.  The Shares underlying a grant of an Option may be in the form of Restricted Stock or unrestricted Stock.

(b)        Further, subject to the express provisions of this Plan, the Administrator shall specify the Grant Date, the number of Shares covered by the Option, the exercise price and the terms and conditions for exercise of the Options.  As soon as practicable after the Grant Date, the Company shall provide the Grantee with a written Award Agreement in the form approved by the Administrator, which sets out the Grant Date, the number of Shares covered by the Option, the exercise price and the terms and conditions for exercise of the Option.

(c)        The Administrator may, in its absolute discretion, grant Options under this Plan at any time and from time to time before the expiration of this Plan.

                      General Terms and Conditions

7.2                  Except as otherwise provided herein, the Options shall be subject to the following terms and conditions and such other terms and conditions not inconsistent with this Plan as the Administrator may impose:
(a)        Exercise of Option. The Administrator may determine in its discretion whether any Option shall be subject to vesting and the terms and conditions of any such vesting.  The Award Agreement shall contain any such vesting schedule;

(b)        Option Term.  Each Option and all rights or obligations thereunder shall expire on such date as shall be determined by the Administrator, but not later than ten years after the Grant Date (five years in the case of an Incentive Stock Option when the Optionee beneficially owns more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary (a "Ten Percent Stockholder"), as determined with reference to Rule 13d-3 of the Exchange Act), and shall be subject to earlier termination as hereinafter provided;

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(c)        Exercise Price.  The Exercise Price of any Option shall be determined by the Administrator when the Option is granted, at such Exercise Price as may be determined by the Administrator in the Administrator's sole and absolute discretion; provided, however, that the Exercise Price may not be less than 100% of the Fair Market Value of the Shares on the Grant Date with respect to any Options which are granted and, provided further, that the Exercise Price of any Incentive Stock Option granted to a Ten Percent Stockholder shall not be less than 110% of the Fair Market Value of the Shares on the Grant Date.  Payment for the Shares purchased shall be made in accordance with Section 16 of this Plan.  The Administrator is authorized to issue Options, whether Incentive Stock Options or Non-qualified Stock Options, at an option price in excess of the Fair Market Value on the Grant Date, to determine the terms and conditions of any Award granted under the Plan, including, but not limited to, the exercise price, grant price or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of the Award, and acceleration or waivers thereof, based in each case on such considerations as the Committee in its sole discretion determines that is not inconsistent with any rule or regulation under any tax or securities laws or includes an alternative right that does not disqualify an Incentive Stock Option under applicable regulations;

(d)        Method of Exercise.  Options may be exercised only by delivery to the Company of a stock option exercise agreement (the "Exercise Agreement") in a form approved by the Administrator (which need not be the same for each Grantee), stating the number of Shares being purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such representations and agreements regarding the Grantee's investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws, together with payment in full of the exercise price for the number of Shares being purchased;

(e)        Exercise After Certain Events.
(i)        Termination of Continuous Services.
(A)        Options.
(I)        Termination of Continuous Services.  If for any reason other than Disability or death, a Grantee terminates Continuous Services with the Company or a Subsidiary, vested Options held at the date of such termination may be exercised, in whole or in part, either (i) at any time within three months after the date of such termination, or (ii) during any lesser period as specified in the Award Agreement or (iii) during any lesser period as may be determined by the Administrator, in its sole and absolute discretion, prior the date of such termination (but in no event after the earlier of (A) the expiration date of the Option as set forth in the Award Agreement and (B) ten years from the Grant Date (five years for a Ten Percent Stockholder if the Option is an Incentive Stock Option)).

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(II)       Continuation of Services as Consultant/Advisor.  If a Grantee granted an Incentive Stock Option terminates employment but continues as a Consultant (no termination of Continuous Services), the Grantee need not exercise an Incentive Stock Option within either of the termination periods provided for immediately hereinabove but shall be entitled to exercise, in whole or in part, either (i) at any time within three months after the then date of termination of Continuous Services to the Company or a Subsidiary, or (ii) during any lesser period as specified in the Award Agreement or (iii) during any lesser period as may be determined by the Administrator, in its sole and absolute discretion, prior the date of such then termination of Continuous Services to the Company or the Subsidiary (one year in the event of Disability or death) (but in no event after the earlier of (A) the expiration date of the Option as set forth in the Award Agreement and (B) ten years from the Grant Date (five years for a Ten Percent Stockholder if the Option is an Incentive Stock Option)).  However, if the Grantee does not exercise within three months of termination of employment, pursuant to Section 422 of the Code the Option shall not qualify as an Incentive Stock Option.

(B)        Disability and Death.  If a Grantee becomes Disabled while rendering Continuous Services to the Company or a Subsidiary, or dies while employed by the Company or Subsidiary or within three months thereafter, vested Options then held may be exercised by the Grantee, the Grantee's personal representative, or by the person to whom the Option is transferred by the laws of descent and distribution, in whole or in part, at any time within one year after the termination because of the Disability or death or any lesser period specified in the Award Agreement (but in no event after the earlier of (i) the expiration date of the Option as set forth in the Award Agreement, and (ii) ten years from the Grant Date (five years for a Ten Percent Stockholder if the Option is an Incentive Stock Option).

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                      Limitations on Grant of Incentive Stock Options

7.3
(a)        Threshold.  The aggregate Fair Market Value (determined as of the Grant Date) of the Shares for which Incentive Stock Options may first become exercisable by any Grantee during any calendar year under this Plan, together with that of Shares subject to Incentive Stock Options first exercisable by such Grantee under any other plan of the Company or any Parent or Subsidiary, shall not exceed $100,000.  For purposes of this Section 7.3(a), all Options in excess of the $100,000 threshold shall be treated as Non-Qualified Stock Options notwithstanding the designation as Incentive Stock Options.  For this purpose, Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the date the Option with respect to such Shares is granted.

(b)        Compliance with Section 422 of the Code.  There shall be imposed in the Award Agreement relating to Incentive Stock Options such terms and conditions as are required in order that the Option be an "incentive stock option" as that term is defined in Section 422 of the Code.

(c)        Requirement of Employment.  No Incentive Stock Option may be granted to any person who is not an Employee of the Company or a Parent or Subsidiary of the Company.

8.                     RESTRICTED STOCK AWARDS

                      Grant of Restricted Stock Awards

8.1                  Subject to the terms and provisions of this Plan, the Administrator is authorized to make awards of Restricted Stock to any Eligible Participant in such amounts and subject to such terms and conditions as may be selected by the Administrator.  The restrictions may lapse separately or in combination at such times, under such circumstances, in such instalments, time-based or upon the satisfaction of performance goals or otherwise, as the Administrator determines at the time of the grant of the Award or thereafter. (See Performance Goals, Section 14.4).  All awards of Restricted Stock shall be evidenced by Award Agreements.

                      Consideration

8.2                  Restricted Stock may be issued in connection with:
(a)        Services.  Services rendered to the Company or an Affiliate (i.e. bonus); and/or

(b)        Purchase Price.  A purchase price, as specified in the Award Agreement related to such Restricted Stock, equal to not be less than 100% of the Fair Market Value of the Shares underlying the Restricted Stock on the date of issuance.

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                      Voting and Dividends

8.3                  Unless the Administrator in its sole and absolute discretion otherwise provides in an Award Agreement, holders of Restricted Stock shall have the right to vote such Restricted Stock and the right to receive any dividends declared or paid with respect to such Restricted Stock.  The Administrator may provide that any dividends paid on Restricted Stock must be reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and restrictions applicable to such Restricted Stock.  All distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Award.  

                      Forfeiture

8.4                  In the case of an event of forfeiture pursuant to the Award Agreement, including failure to satisfy the restriction period or a performance objective during the applicable restriction period, any Restricted Stock that has not vested prior to the event of forfeiture shall automatically expire, and all of the rights, title and interest of the Grantee thereunder shall be forfeited in their entirety including but not limited to any right to vote and receive dividends with respect to the Restricted Stock.  Notwithstanding the foregoing, the Administrator may provide in any Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Administrator may in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock, provided such waiver is in accordance with the Applicable Laws. 

                      Certificates for Restricted Stock

8.5                  Restricted Stock granted under this Plan may be evidenced in such manner as the Administrator shall determine, including by way of certificates.  The Administrator may provide in an Award Agreement that either (i) the Secretary of the Company shall hold such certificates for the Grantee's benefit until such time as the Restricted Stock is forfeited to the Company or the restrictions lapse, (see Escrow; Pledge of Shares, Section 23) or (ii) such certificates shall be delivered to the Grantee, provided, however, that such certificates shall bear a legend or legends that comply with the applicable securities laws and regulations and make appropriate reference to the restrictions imposed under this Plan and the Award Agreement.

9.                     UNRESTRICTED STOCK AWARDS

                      The Administrator may, in its sole discretion, grant (or sell at not less than 100% of the Fair Market Value or such other higher purchase price determined by the Administrator in the Award Agreement) an Award of unrestricted Shares to any Grantee pursuant to which such Grantee may receive Shares free of any restrictions under this Plan.

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10.                   RESTRICTED STOCK UNITS

                      Grant of Restricted Stock Units

10.1                Subject to the terms and provisions of this Plan, the Administrator is authorized to make awards of Restricted Stock Units to any Eligible Participant in such amounts and subject to such terms and conditions as may be selected by the Administrator.  These restrictions may lapse separately or in combination at such times, under such circumstances, in such instalments, time-based or upon the satisfaction of performance goals or otherwise, as the Administrator determines at the time of the grant of the Award or thereafter. (See Performance Goals, Section 14.4).  All awards of Restricted Stock Units shall be evidenced by Award Agreements. 

                      Number of Restricted Stock Units

10.2                The Award Agreement shall specify the number of Share equivalent units granted and such other provisions as the Administrator determines.

                      Consideration

10.3                Restricted Stock Units may be issued in connection with: 
(a)        Services.  Services rendered to the Company or an Affiliate (i.e. bonus); and/or

(b)        Purchase Price.  A purchase price as specified in the Award Agreement related to such Restricted Stock Units, equal to not be less than 100% of the Fair Market Value of the Shares underlying the Restricted Stock Units on the date of issuance.

                      No Voting Rights

10.4                The holders of Restricted Stock Units shall have no rights as stockholders of the Company.

                      Dividend Equivalency

10.5                The Administrator, in its sole and absolute discretion, may provide in an Award Agreement evidencing a grant of Restricted Stock Units that the holder shall be entitled to receive, upon the Company's payment of a cash dividend on its outstanding Shares, a cash payment for each Restricted Stock Unit.  (See Section 13, Dividend Equivalent Right).  Such Award Agreement may also provide that such cash payment shall be deemed reinvested in additional Restricted Stock Units at a price per unit equal to the Fair Market Value of a Share on the date that such dividend is paid.

                      Creditor's Rights

10.6                A holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company.  Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.

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                      Settlement of Restricted Stock Units

10.7                Each Restricted Stock Unit shall be paid and settled by the issuance of Restricted Stock or unrestricted Shares in accordance with the Award Agreement and if such settlement is subject to Section 409A of the Code only upon any one or more of the following as provided for in the Award Agreement:
(a)        a specific date or date determinable by a fixed schedule; 

(b)        upon the Eligible Participant's termination of Continuous Services to the extent the same constitutes a separation from services for purposes of Section 409A of the Code except that if an Eligible Participant is a "key employee" as defined in Section 409A of the Code for such purposes, then payment or settlement shall occur 6 months following such separation of service;

(c)        as a result of the Eligible Participant's death or Disability; or

(d)        in connection with or as a result of a Change of Control in compliance with Section 409A of the Code.

                      Forfeiture

10.8                Upon failure to satisfy any requirement for settlement as set forth in the Award Agreement, including failure to satisfy any restriction period or performance objective, any Restricted Stock Units held by the Grantee shall automatically expire, and all of the rights, title and interest of the Grantee thereunder shall be forfeited in their entirety including but not limited to any right to receive dividends with respect to the Restricted Stock Units.

11.                   DIRECTOR SHARES AND DIRECTOR DEFERRED STOCK UNITS

                      The grant of Awards of Shares to Directors and the election by Directors to defer the receipt of the Awards of Shares (the "Deferred Stock Units") shall be governed by the provisions of Subpart A which is attached hereto.  The provisions of Subpart A are attached hereto as part of this Plan and are incorporated herein by reference.

12.                   STOCK APPRECIATION RIGHTS

                      Awards of SARs

12.1                An SAR is an award to receive a number of Shares (which may consist of Restricted Stock), or cash, or Shares and cash, as determined by the Administrator in accordance with Section 12.4 below, for services rendered to the Company.  A SAR may be awarded pursuant to an Award Agreement that shall be in such form (which need not be the same for each Grantee) as the Administrator shall from time to time approve, and shall comply with and be subject to the terms and conditions of this Plan.  A SAR may vary from Grantee to Grantee and between groups of Grantees, and may be based upon performance objectives (See Performance Goals in Section 14.4).

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                      Term

12.2                The term of a SAR shall be set forth in the Award Agreement as determined by the Administrator.

                      Exercise

12.3                A Grantee desiring to exercise a SAR shall give written notice of such exercise to the Company, which notice shall state the proportion of Shares and cash that the Grantee desires to receive pursuant to the SAR exercised, subject to the discretion of the Administrator.  Upon receipt of the notice from the Grantee, subject to the Administrator's election to pay cash as provided in Section 12.4 below, the Company shall deliver to the person entitled thereto (i) a certificate or certificates for Shares and/or (ii) a cash payment, in accordance with Section 12.4 below.  The date the Company receives written notice of such exercise hereunder is referred to in this Section 12 as the "exercise date". 

                      Number of Shares or Amount of Cash

12.4                Subject to the discretion of the Administrator to substitute cash for Shares, or some portion of the Shares for cash, the amount of Shares that may be issued pursuant to the exercise of a SAR shall be determined by dividing: (i) the total number of Shares as to which the SAR is exercised, multiplied by the amount by which the Fair Market Value of the Shares on the exercise date exceeds the Fair Market Value of a Share on the date of grant of the SAR; by (ii) the Fair Market Value of a Share on the exercise date; provided, however, that fractional Shares shall not be issued and in lieu thereof, a cash adjustment shall be paid.  In lieu of issuing Shares upon the exercise of a SAR, the Administrator in its sole discretion may elect to pay the cash equivalent of the Fair Market Value of the Shares on the exercise date for any or all of the Shares that would otherwise be issuable upon exercise of the SAR. 

                      Effect of Exercise

12.5                A partial exercise of a SAR shall not affect the right to exercise the remaining SAR from time to time in accordance with this Plan and the applicable Award Agreement with respect to the remaining shares subject to the SAR.

                      Forfeiture

12.6                In the case of an event of forfeiture pursuant to the Award Agreement, including failure to satisfy any restriction period or a performance objective, any SAR that has not vested prior to the date of termination shall automatically expire, and all of the rights, title and interest of the Grantee thereunder shall be forfeited in their entirety.

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13.                   DIVIDEND EQUIVALENT RIGHT

                      A dividend equivalent right is an Award entitling the recipient to receive credits based on cash distributions that would have been paid on the Shares specified in the dividend equivalent right (or other Award to which it relates) if such Shares had been issued to and held by the recipient (a "Dividend Equivalent Right").  A Dividend Equivalent Right may be granted hereunder to any Grantee as a component of another Award or as a freestanding Award.  The terms and conditions of Dividend Equivalent Right shall be specified in the grant.  Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional Shares, which may thereafter accrue additional equivalents.  Any such reinvestment shall be at Fair Market Value on the date of reinvestment. Dividend Equivalent Rights may be settled in cash or Shares or a combination thereof, in a single instalment or instalments, all determined in the sole discretion of the Administrator.  A Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award.  A Dividend Equivalent Right granted as a component of another Award may also contain terms and conditions different from such other Award. 

14.                   TERMS AND CONDITIONS OF AWARDS

                      In General

14.1                Subject to the terms of the Plan and Applicable Laws, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. 

                      Term of Award

14.2                The term of each Award shall be the term stated in the Award Agreement.

                      Transferability

14.3
(a)        Limits on Transfer.  No right or interest of a Grantee in any unexercised or restricted Award may be pledged, encumbered or hypothecated to or in favor of any party other than to the Company or a Related Entity or Affiliate.  No Award shall be sold, assigned, transferred or disposed of by a Grantee other than by the laws of descent and distribution or, in the case of an Incentive Stock Option, pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if such Section applied to an Award under the Plan; provided, however, that the Administrator may (but need not) permit other transfers where the Administrator concludes that such transferability (i) does not result in accelerated taxation or other adverse tax consequences, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Section 422(b) of the Code, and (iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant, including, without limitation, state or federal tax or securities laws applicable to transferable Awards.

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(b)        Beneficiaries.  Notwithstanding Section 14.3(a), a Grantee may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Grantee and to receive any distribution with respect to any Award upon the Grantee's death.  A beneficiary, legal guardian, legal representative or other person claiming any rights under the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Grantee, except to the extent the Plan and such Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator.  If no beneficiary has been designated or survives the Grantee, payment shall be made to the Grantee's estate. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Grantee at any time, provided the change or revocation is filed with the Administrator.

                      Performance Goals

14.4                In order to preserve the deductibility of an Award under Section 162(m) of the Code, the Administrator may determine that any Award granted pursuant to this Plan to a Grantee that is or is expected to become a Covered Employee shall be determined solely on the basis of (a) the achievement by the Company or Subsidiary of a specified target return, or target growth in return, on equity or assets, (b) the Company's stock price, (c) the Company's total shareholder return (stock price appreciation plus reinvested dividends) relative to a defined comparison group or target over a specific performance period, (d) the achievement by the Company or a Parent or Subsidiary, or a business unit of any such entity, of a specified target, or target growth in, net income, earnings per share, earnings before income and taxes, and earnings before income, taxes, depreciation and amortization, or (e) any combination of the goals set forth in (a) through (d) above.  If an Award is made on such basis, the Administrator shall establish goals prior to the beginning of the period for which such performance goal relates (or such later date as may be permitted under Section 162(m) of the Code or the regulations thereunder but not later than 90 days after commencement of the period of services to which the performance goal relates), and the Administrator has the right for any reason to reduce (but not increase) the Award, notwithstanding the achievement of a specified goal.  Any payment of an Award granted with performance goals shall be conditioned on the written certification of the Administrator in each case that the performance goals and any other material conditions were satisfied.

                      In addition, to the extent that Section 409A is applicable, (i) performance-based compensation shall also be contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months in which the Eligible Participant performs services and (ii) performance goals shall be established not later than 90 calendar days after the beginning of any performance period to which the performance goal relates, provided that the outcome is substantially uncertain at the time the criteria are established.

                      Acceleration

14.5                The Administrator may, in its sole discretion (but subject to the limitations of and compliance with Section 409A of the Code and Section 14.7 in connection therewith), at any time (including, without limitation, prior to, coincident with or subsequent to a Change of Control) determine that (a) all or a portion of a Grantee's Awards shall become fully or partially exercisable, and/or (b) all or a part of the restrictions on all or a portion of the outstanding Awards shall lapse, in each case, as of such date as the Administrator may, in its sole discretion, declare.  The Administrator may discriminate among Grantees and among Awards granted to a Grantee in exercising its discretion pursuant to this Section 14.5.

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                      Compliance with Section 162(m) of the Code

14.6                Notwithstanding any provision of this Plan to the contrary, if the Administrator determines that compliance with Section 162(m) of the Code is required or desired, all Awards granted under this Plan to Named Executive Officers shall comply with the requirements of Section 162(m) of the Code.  In addition, in the event that changes are made to Section 162(m) of the Code to permit greater flexibility with respect to any Award or Awards under this Plan, the Administrator may make any adjustments it deems appropriate.  

                      Compliance with Section 409A of the Code

14.7                Notwithstanding any provision of this Plan to the contrary, if any provision of this Plan or an Award Agreement contravenes any regulations or Treasury guidance promulgated under Section 409A of the Code or could cause an Award to be subject to the interest and penalties under Section 409A of the Code, such provision of this Plan or any Award Agreement shall be modified to maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Section 409A of the Code.  In addition, in the event that changes are made to Section 409A of the Code to permit greater flexibility with respect to any Award under this Plan, the Administrator may make any adjustments it deems appropriate. 

                      Section 280G of the Code

14.8                Notwithstanding any other provision of this Plan to the contrary, unless expressly provided otherwise in the Award Agreement, if the right to receive or benefit from an Award under this Plan, either alone or together with payments that a Grantee has a right to receive from the Company, would constitute a "parachute payment" (as defined in Section 280G of the Code), all such payments shall be reduced to the largest amount that shall result in no portion being subject to the excise tax imposed by Section 4999 of the Code.

                      Exercise of Award Following Termination of Continuous Service

14.9                An Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following the termination of a Grantee's Continuous Service only to the extent provided in the Award Agreement.  Where the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee's Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first.

                      Cancellation of Awards

14.10              In the event a Grantee's Continuous Services has been terminated for "Cause", he or she shall immediately forfeit all rights to any and all Awards outstanding.  The determination that termination was for Cause shall be final and conclusive.  In making its determination, the Board shall give the Grantee an opportunity to appear and be heard at a hearing before the full Board and present evidence on the Grantee's behalf.  Should any provision to this Section 14.10. be held to be invalid or illegal, such illegality shall not invalidate the whole of this Section 14, but, rather, this Plan shall be construed as if it did not contain the illegal part or narrowed to permit its enforcement, and the rights and obligations of the parties shall be construed and enforced accordingly.

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15.                   ADDITIONAL TERMS IF THE COMPANY BECOMES LISTED ON A STOCK EXCHANGE

15.1                In the event the Shares become listed on a stock exchange, and to the extent required by the rules of such stock exchange, then the following terms and conditions shall apply to an Award in addition to those contained herein, as applicable:
(a)        the exercise price of an Award must not be lower than 100% of the Fair Market Value (without discount) of the Shares on the stock exchange at the time the Award is granted;

(b)        the number of securities issuable to Insiders, at any time, under all of the Company's security based compensation arrangements (whether entered into prior to or subsequent to such listing), cannot exceed 10% of the Company's total issued and outstanding Common Stock, unless the Company obtains Disinterested Shareholder Approval; and

(c)        the number of securities issued to Insiders, within any one year period, under all of the Company's security based compensation arrangements (whether entered into prior to or subsequent to such listing), cannot exceed 10% of the issued and outstanding Common Stock, unless the Company obtains Disinterested Shareholder Approval.

16.                   PAYMENT FOR SHARE PURCHASES

                      Payment

16.1                Payment for Shares purchased pursuant to this Plan may be made:
(a)        Cash.  By cash, cashier's check or wire transfer or, at the discretion of the Administrator expressly for the Grantee and where permitted by law as follows:

(b)        Surrender of Shares.  By surrender of shares of Common Stock of the Company that have been owned by the Grantee for more than six months, or lesser period if the surrender of shares is otherwise exempt from Section 16 of the Exchange Act, (and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares);

(c)        Deemed Net-Stock Exercise.  By forfeiture of Shares equal to the value of the exercise price pursuant to a "deemed net-stock exercise" by requiring the Grantee to accept that number of Shares determined in accordance with the following formula, rounded down to the nearest whole integer:

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where:

a  =                 net Shares to be issued to Grantee;

b  =                 number of Awards being exercised;

c  =                 Fair Market Value of a Share; and

d  =                 Exercise price of the Awards; or

(d)        Broker-Assisted.  By delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds necessary to pay the exercise price and the amount of any required tax or other withholding obligations.

                    Combination of Methods

16.2              By any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by applicable corporate law.

17.                 WITHHOLDING TAXES

                    Withholding Generally

17.1              Whenever Shares are to be issued in satisfaction of Awards granted under this Plan or Shares are forfeited pursuant to a deemed net-stock exercise, the Company may require the Grantee to remit to the Company an amount sufficient to satisfy the foreign, federal, state, provincial, or local income and employment tax withholding obligations, including, without limitation, on exercise of an Award.  When, under applicable tax laws, a Grantee incurs tax liability in connection with the exercise or vesting of any Award, the disposition by a Grantee or other person of an Award or an Option prior to satisfaction of the holding period requirements of Section 422 of the Code, or upon the exercise of a Non-Qualified Stock Option, the Company shall have the right to require such Grantee or such other person to pay by cash, or check payable to the Company, the amount of any such withholding with respect to such transactions.  Any such payment must be made promptly when the amount of such obligation becomes determinable.

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                    Stock for Withholding

17.2              To the extent permissible under applicable tax, securities and other laws, the Administrator may, in its sole discretion and upon such terms and conditions as it may deem appropriate, permit a Grantee to satisfy his or her obligation to pay any withholding tax, in whole or in part, with Shares up to an amount not greater than the Company's minimum statutory withholding rate for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income.  The Administrator may exercise its discretion, by (i) directing the Company to apply Shares to which the Grantee is entitled as a result of the exercise of an Award, or (ii) delivering to the Company Shares that have been owned by the Grantee for more than six months, unless the delivery of Shares is otherwise exempt from Section 16 of the Exchange Act.  A Grantee who has made an election pursuant to this Section 17.2 may satisfy his or her withholding obligation only with Shares that are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.  The Shares so applied or delivered for the withholding obligation shall be valued at their Fair Market Value as of the date of measurement of the amount of income subject to withholding.

18.                 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

                    In General

18.1              Subject to any required action by the shareholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration. The Administrator shall make the appropriate adjustments to (i) the maximum number and/or class of securities issuable under this Plan; and (ii) the number and/or class of securities and the exercise price per Share in effect under each outstanding Award in order to prevent the dilution or enlargement of benefits thereunder; provided, however, that the number of Shares subject to any Award shall always be a whole number and the Administrator shall make such adjustments as are necessary to insure Awards of whole Shares. Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive. 

                    Company's Right to Effect Changes in Capitalization

18.2              The existence of outstanding Awards shall not affect the Company's right to effect adjustments, recapitalizations, reorganizations or other changes in its or any other corporation's capital structure or business, any merger or consolidation, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Shares, the dissolution or liquidation of the Company's or any other corporation's assets or business or any other corporate act whether similar to the events described above or otherwise.  

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19.                 CORPORATE TRANSACTIONS/CHANGES IN CONTROL/RELATED ENTITY DISPOSITIONS

                    Company is Not the Survivor

19.1              Subject to Section 19.3 and except as may otherwise be provided in an Award Agreement, the Administrator shall have the authority, in its absolute discretion, exercisable either in advance of any actual or anticipated Corporate Transaction, Change in Control or Related Entity Disposition in which the Company is not the surviving corporation, or at the time of an actual Corporate Transaction, Change in Control or Related Entity Disposition in which the Company is not the surviving corporation (a) to cancel each outstanding Award upon payment in cash to the Grantee of the amount by which any cash and the Fair Market Value of any other property which the Grantee would have received as consideration for the Shares covered by the Award if the Award had been exercised before such Corporate Transaction, Change in Control or Related Entity Disposition exceeds the exercise price of the Award, or (b) to negotiate to have such Award assumed by the surviving corporation.  The determination as to whether the Company is the surviving corporation is at the sole and absolute discretion of the Administrator.

                    In addition to the foregoing, in the event of a dissolution or liquidation of the Company, or a Corporate Transaction or Related Entity Disposition in which the Company is not the surviving corporation, the Administrator, in its absolute discretion, may accelerate the time within which each outstanding Award may be exercised.  Section 19.3 shall control with respect to any acceleration in vesting in the event of Change of Control.

                    The Administrator shall also have the authority:
(a)        to release the Awards from restrictions on transfer and repurchase or forfeiture rights of such Awards on such terms and conditions as the Administrator may specify; and

(b)        to condition any such Award's vesting and exercisability or release from such limitations upon the subsequent termination of the Continuous Service of the Grantee within a specified period following the effective date of the Corporate Transaction, Change in Control or Related Entity Disposition. 

                    Effective upon the consummation of a Corporate Transaction, Change in Control or Related Entity Disposition governed by this Section 19.1, all outstanding Awards under this Plan not exercised by the Grantee or assumed by the successor corporation shall terminate.

                    Company is the Survivor

19.2              In the event of a Corporate Transaction, Change in Control or Related Entity Disposition in which the Company is the surviving corporation, the Administrator shall determine the appropriate adjustment of the number and kind of securities with respect to which outstanding Awards may be exercised, and the exercise price at which outstanding Awards may be exercised.  The Administrator shall determine, in its sole and absolute discretion, when the Company shall be deemed to survive for purposes of this Plan.  Subject to any contrary language in an Award Agreement evidencing an Award, any restrictions applicable to such Award shall apply as well to any replacement shares received by the Grantee as a result.

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                    Change in Control

19.3              If there is a Change of Control, all outstanding Awards shall fully vest immediately upon the Company's public announcement of such a Change of Control.

20.                 PRIVILEGES OF STOCK OWNERSHIP

                    No Grantee shall have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Grantee.  After Shares are issued to the Grantee, the Grantee shall be a stockholder and have all the rights of a stockholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are Restricted Stock, then any new, additional or different securities the Grantee may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company shall be subject to the same restrictions as the Restricted Stock.  The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Award.

21.                 RESTRICTION ON SHARES

                    At the discretion of the Administrator, the Company may reserve to itself and/or its assignee(s) in the Award Agreement that the Grantee not dispose of the Shares for a specified period of time, or that the Shares are subject to a right of first refusal or a right to repurchase by the Company at the Shares' Fair Market Value at the time of sale.  The terms and conditions of any such rights or other restrictions shall be set forth in the Award Agreement evidencing the Award.

22.                 CERTIFICATES

                    All certificates for Shares or other securities delivered under this Plan shall be subject to such stock transfer orders, legends and other restrictions as the Administrator may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted.

23.                 ESCROW; PLEDGE OF SHARES

                    To enforce any restrictions on a Grantee's Shares, the Administrator may require the Grantee to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Administrator, appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Administrator may cause a legend or legends referencing such restrictions to be placed on the certificates.  

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24.                 SECURITIES LAW AND OTHER REGULATORY COMPLIANCE

                    Compliance With Applicable Law

24.1              An Award shall not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the Grant Date and also on the date of exercise or other issuance.  Notwithstanding any other provision in this Plan, the Company shall have no obligation to issue or deliver certificates for Shares under this Plan prior to (i) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (ii) completion of any registration or other qualification of such Shares under any state or federal laws or rulings of any governmental body that the Company determines to be necessary or advisable.  The Company shall be under no obligation to register the Shares with the Securities Exchange Commission or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company shall have no liability for any inability or failure to do so.  Evidences of ownership of Shares acquired pursuant to an Award shall bear any legend required by, or useful for purposes of compliance with, applicable securities laws, this Plan or the Award Agreement.

                    During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards pursuant to this Plan and the exercise of Awards granted hereunder shall qualify for the exemption provided by Rule 16b-3 under the Exchange Act.  To the extent that any provision of this Plan or action by the Board or the Administrator does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and deemed advisable by the Board or the Administrator, and shall not affect the validity of this Plan.  In the event that Rule 16b-3 is revised or replaced, the Administrator may exercise its discretion to modify this Plan in any respect necessary to satisfy the requirements of, or to take advantage of any features of, the revised exemption or its replacement. 

                    Investment Representation

24.2              As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.

25.                 NO OBLIGATION TO EMPLOY

                    Nothing in this Plan or any Award granted under this Plan shall confer or be deemed to confer on any Grantee any right to continue in the employ of, or to continue any other relationship with, the Company or to limit in any way the right of the Company to terminate such Grantee's employment or other relationship at any time, with or without Cause.

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26.                 EFFECTIVE DATE AND TERM OF PLAN

                    This Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the shareholders of the Company. It shall continue in effect for a term of ten years unless sooner terminated.

27.                 SHAREHOLDER APPROVAL

                    This Plan shall be subject to approval by the shareholders of the Company within 12 months from the date the Plan is adopted by the Company's Board for any and all intended Incentive Stock Options granted hereunder.  Such shareholder approval shall be obtained in the degree and manner required under Applicable Laws.  The Administrator may grant Awards under this Plan prior to approval by the shareholders, however, until such approval is obtained, all Option Awards granted under this Plan shall be deemed Non-Qualified Stock Options.  In the event that shareholder approval is not obtained within the 12 month period provided above, all Incentive Stock Option Awards previously granted under this Plan shall be deemed Non-Qualified Stock Options.

28.                 AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN OR AWARDS

                    The Board may amend, suspend or terminate this Plan at any time and for any reason.  To the extent necessary to comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required.  Shareholder approval shall be required for the following types of amendments to this Plan: (i) any change to those persons who are entitled to become participants under the Plan which would have the potential of broadening or increasing Insider participation; or (ii) the addition of any form of financial assistance or amendment to a financial assistance provision which is more favourable to Grantees.

                    Further, the Board may, in its discretion, determine that any amendment should be effective only if approved by the shareholders even if such approval is not expressly required by this Plan or by law.  No Award may be granted during any suspension of this Plan or after termination of this Plan. 

                    Any amendment, suspension or termination of this Plan shall not affect Awards already granted, and such Awards shall remain in full force and effect as if this Plan had not been amended, suspended or terminated, unless mutually agreed otherwise between the Grantee and the Administrator, which agreement must be in writing and signed by the Grantee and the Company.  At any time and from time to time, the Administrator may amend, modify, or terminate any outstanding Award or Award Agreement without approval of the Grantee; provided, however, that subject to the applicable Award Agreement, no such amendment, modification or termination shall, without the Grantee's consent, reduce or diminish the value of such Award determined as if the Award had been exercised, vested, cashed in or otherwise settled on the date of such amendment or termination.  

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                    Notwithstanding any provision herein to the contrary, the Administrator shall have broad authority to amend this Plan or any outstanding Award under this Plan without approval of the Grantee to the extent necessary or desirable: (i) to comply with, or take into account changes in, applicable tax laws, securities laws, accounting rules and other applicable laws, rules and regulations; or (ii) to ensure that an Award is not subject to interest and penalties under Section 409A of the Code or the excise tax imposed by Section 4999 of the Code. 

                    Further, notwithstanding any provision herein to the contrary, and subject to Applicable Law, the Administrator may, in its absolute discretion, amend or modify this Plan: (i) to make amendments which are of a "housekeeping" or clerical nature; (ii) to change the vesting provisions of an Award granted hereunder, as applicable; (iii) to change the termination provision of an Award granted hereunder, as applicable, which does not entail an extension beyond the original expiry date of such Award; and (iv) the addition of a cashless exercise feature, payable in cash or securities, which provides for a full deduction of the number of underlying securities from the Maximum Number.

29.                 RESERVATION OF SHARES

                    The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of this Plan.

                    The Shares to be issued hereunder upon exercise of an Award may be either authorized but unissued; supplied to the Plan through acquisitions of Shares on the open market; Shares forfeited back to the Plan; Shares surrendered in payment of the exercise price of an Award; or Shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise of an Award.  

                    The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.  

30.                 EXCHANGE AND BUYOUT OF AWARDS

                    The Administrator may, at any time or from time to time, authorize the Company, with the consent of the respective Grantees, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards.  The Administrator may at any time buy from a Grantee an Award previously granted with payment in cash, Shares (including Restricted Stock) or other consideration, based on such terms and conditions as the Administrator and the Grantee may agree.

31.                 APPLICABLE TRADING POLICY

                    The Administrator and each Eligible Participant will ensure that all actions taken and decisions made by the Administrator or an Eligible Participant, as the case may be, pursuant to this Plan comply with any Applicable Laws and policies of the Company relating to insider trading or "blackout" periods.

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32.                 GOVERNING LAW

                    The Plan shall be governed by the laws of the State of Nevada; provided, however, that any Award Agreement may provide by its terms that it shall be governed by the laws of any other jurisdiction as may be deemed appropriate by the parties thereto.

33.                 MISCELLANEOUS

                    Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of 1974, as amended.

__________

SUBPART A

STOCK AND DEFERRED STOCK UNITS FOR ELIGIBLE DIRECTORS

A.                   Stock Award.  The Administrator shall pay Eligible Remuneration to each Director pursuant to an Award Agreement.

B.                   Election.  Further, the Administrator may, in its sole discretion, permit each Eligible Director to receive all or any portion of his Eligible Remuneration during the Remuneration Period in the form of Deferred Stock Units under this Plan (an "Election").  All deferrals pursuant to such an Election shall be evidenced by an Award Agreement. 

                    For purposes of this Subpart A, the following definitions shall apply:
(a)        "Annual Retainer" for a particular Director means the retainer (including any additional amounts payable for serving as lead Director or on any committee of the Board), payable to that Director for serving as a Director for the relevant Remuneration Period, as determined by the Board;

(b)        "Attendance Fee" means amounts payable annually to a Director as a Board meeting attendance fee or a committee meeting attendance fee, or any portion thereof;

(c)        "Canadian Director" means a Director who is a resident of Canada for the purposes of the Canadian Tax Act, and whose income from employment by the Company or Related Entity is subject to Canadian income tax, notwithstanding any provision of the Canada-United States Income Tax Convention (1980), as amended;

(d)        "Canadian Tax Act" and "Canadian Tax Regulations" means respectively the Income Tax Act (Canada), as amended and the Income Tax Regulation promulgated thereunder, as amended;

(e)        "Deferred Stock Unit" means a right granted by the Company to an Eligible Director to receive, on a deferred payment basis, Shares under this Plan; 

(f)        "Eligible Director" is any Director of this Company or Related Entity that the Administrator determines is eligible to elect to receive Deferred Stock Units under this Plan;

(g)        "Eligible Remuneration" means all amounts payable to an Eligible Director in Shares, including all or part of amounts payable in satisfaction of the Annual Retainer, Attendance Fees or any other fees relating to service on the Board which are payable to an Eligible Director or in satisfaction of rights or property surrendered by an Eligible Director to the Company; it being understood that the amount of Eligible Remuneration payable to any Eligible Director may be calculated by the Administrator in a different manner than Eligible Remuneration payable to another Eligible Director in its sole and absolute discretion;

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(h)        "Prescribed Plan or Arrangement" means a prescribed plan or arrangement as defined in s.6801(d) of the Canadian Tax Regulation;

(i)        "Remuneration Period" means, as applicable, (a) the period commencing on the Effective Date of this Plan and ending on the last day of the calendar year in which the Effective Date occurs; and (b) thereafter each subsequent calendar year, or where the context requires, any portion of such period; and

(j)        "Salary Deferral Arrangement" means a salary deferral arrangement as defined in the Canadian Tax Act.

1.                   Election.  An Eligible Director who desires to defer receipt of all or a portion of his or her Eligible Remuneration in any calendar year shall make such election in writing to the Company specifying:
(a)        the dollar amount or percentage of Eligible Remuneration to be deferred; and

(b)        the deferral period.

                    Otherwise, such election must be made before the first day of the calendar year in which the Eligible Remuneration shall be payable, however a newly appointed Eligible Director shall be eligible to defer payment of future Eligible Remuneration by providing written election to the Company within 30 calendar days of his or her appointment to the Board of Directors.  The elections made pursuant to this Section shall be irrevocable with respect to Eligible Remuneration to which such elections pertain and shall also apply to subsequent Eligible Remuneration payable in future calendar years unless such Eligible Director notifies the Company in writing, before the first day of the applicable calendar year, that he or she desires to change such election.

                    If the Eligible Director does not timely deliver an election in respect of a particular Remuneration Period, the Eligible Director will receive the Eligible Remuneration as provided for in the Award Agreement.  

2.                   Determination Of Deferred Stock Units.  The Company will maintain a separate account for each Eligible Director to which it will quarterly credit Deferred Stock Units at the end of March, June, September and December, or as otherwise determined by the Administrator, the Deferred Stock Units granted to the Eligible Director for the relevant Remuneration Period.  The number of Deferred Stock Units (including fractional Deferred Stock Units, computed to three digits) to be credited to an account for an Eligible Director will be determined on the date approved by the Administrator by dividing the appropriate amount of Eligible Remuneration to be deferred into Deferred Stock Units by the Fair Market Value on that date.

3.                   No Voting Rights.  The holders of Deferred Stock Units shall have no rights as stockholders of the Company.

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4.                   Dividend Equivalency.  The Company will, on any date on which a cash or stock dividend is paid on its outstanding Shares, credit to each Eligible Director's account that number of additional Deferred Stock Units (including fractional Deferred Stock Units, computed to three digits) calculated by (i) multiplying the amount of the dividend per Share by the number of Deferred Stock Units in the account as of the record date for payment of the dividend, and (ii) dividing the amount obtained in (i) by the Fair Market Value on the date on which the dividend is paid.  (See Section 13 of the Plan, Dividend Equivalent Right).

5.                   Eligible Director's Account.  A written confirmation of the balance in each Eligible Directors' Account will be sent by the Company to the Eligible Director upon request of the Eligible Director.

6.                   Creditor's Rights.  A holder of Deferred Stock Units shall have no rights other than those of a general creditor of the Company.  Deferred Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and condition of the applicable Award Agreement.

7.                   Settlement of Deferred Stock Units.  Subject to Section 8, each Deferred Stock Unit shall be paid and settled by the issuance of Restricted or unrestricted Shares in accordance with the Award Agreement and if such settlement is subject to Section 409A of the Code only upon any one or more of the following as provided for in the Award Agreement:
(a)        a specific date or date determinable by a fixed schedule; 

(b)        upon the Eligible Director's termination of Continuous Services to the extent the same constitutes a separation from services for the purposes of Section 409A of the Code except that if an Eligible Director is a "key employee" as defined in Section 409A of the Code for such purposes, then payment or settlement shall occur 6 months following such separation of service;

(c)        as a result of the Eligible Director's death or Disability; or

(d)        in connection with or as a result of a Change in Control in compliance with 409A of the Code.

                    The Company will issue one Share for each whole Deferred Stock Unit credited to the Eligible Director's account (net of any applicable withholding tax as provided for in this Plan).  Such payment shall be made by the Company as soon as reasonably possible following the settlement date.  Fractional Shares shall not be issued, and where the Eligible Director would be entitled to receive a fractional Shares in respect of any fractional Deferred Stock Unit, the Company shall pay to such Eligible Director, in lieu of such fractional Shares, cash equal to the Fair Market Value of such fractional Shares calculated as of the day before such payment is made, net of any applicable withholding tax.

8.                   Canadian Directors.  If a Deferred Stock Unit is granted to an Eligible Director who is a Canadian Director would otherwise constitute a Salary Deferred Arrangement, the Award Agreement pertaining to that Deferred Stock Unit shall contain such other or additional terms as will cause the Deferred Stock Unit to be a Prescribed Plan or Arrangement.

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9.                   Issuance of Stock Certificates.  A stock certificate or certificates shall be registered and issued in the name of the holder of Deferred Stock Units and delivered to such holder as soon as practicable after such Deferred Stock Units have become payable or satisfied in accordance with the terms of the Plan

10.                 Non-Exclusivity.  Nothing in this Subpart A shall prohibit the Administrator from making discretionary Awards to Eligible Directors pursuant to the other provisions of this Plan or outside this Plan, not otherwise inconsistent with these provisions.

11.                 Defined Terms.  Capitalized terms used in this Subpart A and not defined herein have the meaning give in the Plan.

__________Employee Matters Agreement, dated as of June 14, 2010

 Exhibit 10.1 

EMPLOYEE MATTERS AGREEMENT 

by and between 

QUESTAR CORPORATION 

QEP RESOURCES, INC. 

Dated as of June 14, 2010 

 EMPLOYEE MATTERS AGREEMENT 

This EMPLOYEE MATTERS AGREEMENT (the “Agreement”) is entered into as of June 14, 2010, by and between Questar
Corporation, a Utah Corporation (“Questar”), and QEP Resources, Inc., a Delaware corporation (“QEP”), each a “Party” and together, the “Parties.” 

R E C I T A L S: 

WHEREAS, Questar, acting through its direct and indirect subsidiaries, currently conducts a number of businesses, including (i) the
Exploration and Production Business (the “QEP Business”), and (ii) the Natural Gas Transportation and Distribution Business (the “Questar Business”); 

WHEREAS, the Board of Directors of Questar has determined that it is appropriate, desirable and in the best interests of Questar and its
stockholders to separate Questar into two separate, independent and publicly traded companies, (i) one comprising solely the QEP Business, and (ii) one comprising mainly the Questar Business, which shall continue to be owned and conducted,
directly or indirectly, by Questar; 
 WHEREAS, to effect this separation the Parties entered into that certain Separation and
Distribution Agreement dated as of the date hereof (as amended or otherwise modified from time to time, the “Separation Agreement”); and 

WHEREAS, pursuant to the Separation Agreement, Questar and QEP have agreed to enter into this Agreement for the purpose of allocating
Assets, Liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs between and among them. 

NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 

ARTICLE I 

DEFINITIONS AND INTERPRETATION 

Section 1.1 Definitions. Capitalized terms used, but not defined herein shall have the meanings assigned to such terms in the Separation
Agreement and the following terms shall have the following meanings: 
 “Agreement” shall have the meaning
ascribed thereto in the preamble to this Agreement. 
 “Benefit Plan” shall mean, with respect to an entity,
each plan, program, arrangement, agreement or commitment that is an employment, consulting, non-competition or deferred compensation agreement, or an executive compensation, incentive bonus or other bonus, employee pension, profit-sharing, savings,
retirement, supplemental retirement, stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, sick leave, vacation pay,

  

 1 

 
disability or accident insurance plan, corporate-owned or key-man life insurance or other employee benefit plan, program, arrangement, agreement or commitment, including any “employee
benefit plan” (as defined in Section 3(3) of ERISA), sponsored or maintained by such entity (or to which such entity contributes or is required to contribute). 

“COBRA” shall mean the continuation coverage requirements for “group health plans” under Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Code Section 4980B and Sections 601 through 608 of ERISA, together with all regulations promulgated thereunder. 

“Code” shall mean the Internal Revenue Code of 1986, as amended. 

“Detrimental Conduct Provisions” shall mean any provisions that proscribe conduct of Questar Employees, QEP Employees,
Former Questar Employees or Former QEP Employees in their capacity as such, whether set forth in outstanding awards under the Questar Stock Plans or otherwise, in each case as in effect from time to time. 

“DOL” shall mean the U.S. Department of Labor. 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. 

“ERISA Affiliate” shall mean with respect to any Person, each business or entity which is a member of a “controlled
group of corporations,” under “common control” or a member of an “affiliated service group” with such Person within the meaning of Sections 414(b), (c) or (m) of the Code, or required to be aggregated with such
Person under Section 414(o) of the Code, or under “common control” with such Person within the meaning of Section 4001(a)(14) of ERISA. 

“Former QEP Employee” shall mean, as of the Distribution Date, any individual listed on Exhibit B attached hereto or
otherwise described pursuant to the rules contained on Exhibit B attached hereto. 
 “Former Questar Employee”
shall mean, as of the Distribution Date, any individual listed on Exhibit A attached hereto or otherwise described pursuant to the rules contained on Exhibit A attached hereto. 

“HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as amended. 

“IRS” shall mean the Internal Revenue Service. 

“Participating Company” shall mean Questar or any Affiliate thereof that is a participating employer in a Questar
Benefit Plan. 
 “Parties” shall have the meaning ascribed thereto in the preamble to this Agreement.

 “Post-Distribution Questar Option” shall have the meaning ascribed thereto in Section 9.1(a) of this
Agreement. 
  

 2 

 “QEP” shall have the meaning ascribed thereto in the preamble to this
Agreement. 
 “QEP 401(k) Plan” shall have the meaning ascribed thereto in Section 4.1(a) of this
Agreement. 
 “QEP Benefit Plan” shall mean any Benefit Plan sponsored, maintained or contributed to by any
member of the QEP Group or any ERISA Affiliate thereof immediately following the Distribution Date, including, without limitation, the QEP Retirement Plan, the QEP 401(k) Plan, the QEP Executive Severance Plan, the QEP Nonqualified Plans, the QEP
Stock Plan and the QEP Welfare Plans. 
 “QEP Cafeteria Plan” shall have the meaning ascribed thereto in
Section 5.1(c) of this Agreement. 
 “QEP Deferred Compensation Plan for Directors” shall have the meaning
ascribed thereto in Section 10.6(a) of this Agreement. 
 “QEP Employee” shall mean any individual who
immediately following the Distribution Date, remains employed by or will be employed by QEP or any member of the QEP Group, including active employees and employees on an approved leave of absence (including accrued paid time off leave (PTO),
qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, leave under the QEP Short-Term Disability Plan and leave under the Family Medical Leave Act and other approved leaves). 

“QEP Executive Severance Plan” shall have the meaning ascribed thereto in Section 10.4(a) of this Agreement.

 “QEP Nonqualified Plans” shall have the meaning ascribed thereto in Section 8.1 of this Agreement.

 “QEP Option” shall mean an option to purchase shares of QEP Common Stock as of the Distribution Date, which
shall be issued pursuant to the QEP Stock Plan as part of the adjustment to Questar Options in connection with the Distribution. 

“QEP Participant” shall mean any individual who, immediately following the Distribution Date, is a QEP Employee, a
Former QEP Employee, or a beneficiary, dependent or alternate payee of any of the foregoing. 
 “QEP Restricted
Share” shall mean a share of QEP Common Stock that is subject to forfeiture based on the extent of attainment of a vesting requirement, which share is issued pursuant to the QEP Stock Plan. 

“QEP Retiree Welfare Benefits Eligible Group” shall mean that group of QEP Employees who have an original hire date with
Questar or its affiliates that occurred before January 1, 1997 and, immediately prior to the Distribution Date, could have become eligible for retiree medical and life benefits under a Questar Welfare Plan by (i) attaining age 55,
(ii) completing 10 years of service and (iii) timely commencing benefits under the Questar Retirement Plan, regardless of whether such person could actually satisfy these requirements as of the Distribution Date. 

 

 3 

 “QEP Retirement Plan” shall have the meaning ascribed thereto in
Section 3.1(a) of this Agreement. 
 “QEP Stock Plan” shall have the meaning ascribed thereto in
Section 2.5 of this Agreement. 
 “QEP Supplemental Executive Retirement Plan” shall have the meaning
ascribed thereto in Section 8.1 of this Agreement. 
 “QEP Welfare Plans” shall have the meaning ascribed
thereto in Section 5.1(a) of this Agreement. 
 “Questar” shall have the meaning ascribed thereto in the
preamble to this Agreement. 
 “Questar 401(k) Plan” shall mean the Questar Corporation Employee Investment
Plan, as amended and restated effective January 1, 2009. 
 “Questar Annual Cash Incentive Plans” shall
mean, collectively, the plans listed on Schedule C attached hereto. 
 “Questar Benefit Plan” shall mean any
Benefit Plan sponsored, maintained or contributed to by any member of the Questar Group or any ERISA Affiliate thereof prior to the Distribution Date. 

“Questar Cafeteria Plan” shall have the meaning ascribed thereto in Section 5.1(c) of this Agreement. 

“Questar Deferred Compensation Plan for Directors” shall mean the Questar Corporation Deferred Compensation Plan for
Directors, as amended and restated effective January 1, 2005. 
 “Questar Employee” shall mean any
individual who, immediately following the Distribution Date, remains employed by or will be employed by Questar or any member of the Questar Group, including active employees and employees on an approved leave of absence (including accrued PTO,
qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, leave under the Questar Corporation Short-Term Disability Program and leave under the Family Medical Leave Act and other approved leaves).

 “Questar Executive Severance Plan” shall mean the Questar Corporation Executive Severance Compensation Plan,
as amended and restated effective October 23, 2007. 
 “Questar Nonqualified Plans” shall mean,
collectively, the plans listed on Schedule B attached hereto. 
 “Questar Option” shall mean an option to
purchase shares of Questar Common Stock granted pursuant to the Questar Stock Plan. 
  

 4 

 “Questar Participant” shall mean any individual who, immediately following
the Distribution Date, is a Questar Employee, a Former Questar Employee or a beneficiary, dependent or alternate payee of any of the foregoing. 

“Questar Restricted Share” shall mean a share of Questar Common Stock that is subject to forfeiture based on the extent
of attainment of a vesting requirement, which share is issued pursuant to the Questar Stock Plan. 
 “Questar Retained
Claim” shall have the meaning ascribed thereto in Section 10.5(a) of this Agreement. 
 “Questar
Retirement Plan” shall mean the Questar Corporation Retirement Plan, as amended and restated effective January 1, 2009. 

“Questar Stock Plan” shall mean the Questar Corporation Long-Term Stock Incentive Plan, as amended and restated
effective May 18, 2010, the Questar Corporation Stock Option Plan for Directors, as amended and restated effective October 29, 1998, and any other stock option or stock incentive compensation plan or arrangement maintained before the
Distribution Date for employees, officers, consultants, non-employee directors, independent contractors or other service providers of Questar or its Affiliates. 

“Questar Welfare Plans” shall mean, collectively, the plans listed on Schedule A attached hereto. 

“Separation Agreement” shall have the meaning ascribed thereto in the recitals to this Agreement. 

“VEBA” shall mean the Questar Corporation Employee Benefit Trust, as amended and restated effective February 1,
1996, which is intended to be a voluntary employees’ beneficiary association under Section 501(c)(9) of the Code. 
 Section 1.2
References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. Unless the context otherwise requires, the words
“include”, “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation”. Unless the context otherwise requires, references in this Agreement to
Articles, Sections, Annexes, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”,
“hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. 

 

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 ARTICLE II 

GENERAL PRINCIPLES 

Section 2.1 Assumption and Retention of Liabilities; Related Assets. 

(a) As of the Distribution Date, except as otherwise expressly provided for in this Agreement, Questar shall, or shall cause one or more
members of the Questar Group to, assume or retain and Questar shall pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all Questar Benefit Plans, (ii) all Liabilities (excluding Liabilities incurred under
a Benefit Plan except as otherwise provided in this Agreement) with respect to the employment, service, termination of employment or termination of service of all Questar Employees and Former Questar Employees and their dependents and beneficiaries
(and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee,
on-call worker, incidental worker, or non-payroll worker of any member of the Questar Group or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the Questar Group or whose employment or service is
or was otherwise primarily associated with the Questar Business), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the Questar Group or QEP Group, and
(iii) any other Liabilities or obligations expressly assigned to Questar or any of its Affiliates under this Agreement. For purposes of clarification, the Liabilities assumed or retained by the Questar Group as provided for in this
Section 2.1(a) are intended to be “Questar Liabilities” as such term is defined in the Separation Agreement. 

(b) As of the Distribution Date, except as otherwise expressly provided for in this Agreement, QEP shall, or shall cause one or more
members of the QEP Group to, assume or retain, as applicable, and QEP shall pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all QEP Benefit Plans, (ii) all Liabilities (excluding Liabilities incurred
under a Benefit Plan except as otherwise provided in this Agreement) with respect to the employment, service, termination of employment or termination of service of all QEP Employees and Former QEP Employees and their dependents and beneficiaries
(and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee,
on-call worker, incidental worker, or non-payroll worker of any member of the QEP Group or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the QEP Group or whose employment or service is or was
otherwise primarily associated with the QEP Business), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the Questar Group or the QEP Group, and (iii) any
other Liabilities or obligations expressly assigned to QEP or any of its Affiliates under this Agreement. For purposes of clarification, the Liabilities assumed or retained by the QEP Group as provided for in this Section 2.1(b) are intended to
be “QEP Liabilities” as such term is defined in the Separation Agreement. 
 (c) From time to time after the
Distribution, QEP shall promptly reimburse Questar, upon Questar’s reasonable request and the presentation by Questar of such substantiating 

 

 6 

 
documentation as QEP shall reasonably request, for the cost of any obligations or Liabilities satisfied or assumed by Questar or its Affiliates that are the responsibility of QEP or its
Affiliates pursuant to this Agreement. Except as otherwise provided in this Agreement, any such request for reimbursement must be made by Questar not later than the first anniversary of the Distribution. 

(d) From time to time after the Distribution, Questar shall promptly reimburse QEP, upon QEP’s reasonable request and the
presentation by QEP of such substantiating documentation as Questar shall reasonably request, for the cost of any obligations or Liabilities satisfied or assumed by QEP or its Affiliates that are the responsibility of Questar or its Affiliates
pursuant to this Agreement. Except as otherwise provided in this Agreement, any such request for reimbursement must be made by QEP not later than the first anniversary of the Distribution. 

(e) All Liabilities under all Questar Benefit Plans and QEP Benefit Plans and all Liabilities (excluding Liabilities incurred under a
Benefit Plan except as otherwise provided in this Agreement) with respect to the employment, service, termination of employment or termination of service of all Questar Employees, Former Questar Employees, QEP Employees and Former QEP Employees and
their dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer,
agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker of any member of the Questar Group or QEP Group or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the
Questar Group or QEP Group), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the Questar Group or QEP Group, that are not allocated pursuant to the terms of
this Agreement shall be treated as Unallocated Liabilities under the Separation Agreement. 
 Section 2.2 QEP Participation in Questar
Benefit Plans. Except as otherwise expressly provided for in this Agreement or as otherwise expressly agreed to in writing between the Parties, (i) effective as of the Distribution Date, QEP and each member of the QEP Group shall cease to
be a Participating Company in each Questar Benefit Plan, and (ii) each QEP Participant and any other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker,
consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or nonpayroll worker of any member of the Questar Group or the QEP Group or in any other employment, non-employment, or retainer arrangement, or
relationship with any member of the Questar Group or the QEP Group), effective as of the Distribution Date, shall cease to participate in, be covered by, accrue benefits under or be eligible to contribute to any Questar Benefit Plan, and Questar and
QEP shall take all necessary action to effectuate each such cessation. 
 Section 2.3 Comparable Compensation and Benefits. Except
as otherwise expressly provided for in this Agreement or as otherwise expressly agreed to in writing between the Parties, QEP (acting directly or through its Affiliates) intends immediately following the Distribution Date to provide QEP Employees
with compensation opportunities (including salary, wages, commissions and bonus opportunities) and employee benefits that are generally comparable, in the aggregate, to the compensation opportunities and employee benefits to which such QEP Employees
were entitled immediately prior to the Distribution Date. 
  

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 Section 2.4 Service Recognition. 

(a) Pre-Distribution Service Credit. QEP shall give each QEP Participant full credit for purposes of eligibility, vesting,
determination of level of benefits, and, to the extent applicable, benefit accruals under any QEP Benefit Plan for such QEP Participant’s service with any member of the Questar Group prior to the Distribution Date to the same extent such
service was recognized by the applicable Questar Benefit Plan immediately prior to the Distribution Date; provided, that, such service shall not be recognized to the extent that such recognition would result in the duplication of
benefits. 
 (b) Post-Distribution Service Crediting. Except to the extent imposed by law, neither Questar nor QEP
(acting directly or through their respective Affiliates) shall be obligated to recognize any service after the Distribution Date for any purpose under any of their respective Benefit Plans if either a Questar Employee becomes employed by a member of
the QEP Group, or a QEP Employee becomes employed by a member of the Questar Group after the Distribution Date; provided, however, that nothing herein shall prohibit Questar or QEP or their respective Affiliates from recognizing such service.

 Section 2.5 Approval by Questar As Sole Stockholder. Effective as of the Distribution Date, QEP shall have adopted the QEP
Resources, Inc. Long-Term Stock Incentive Plan (the “QEP Stock Plan”) which shall permit the issuance of stock incentive awards that have material terms and conditions substantially similar to those stock incentive awards issued
under the Questar Stock Plan that are to be substituted with QEP stock incentive awards in connection with the Distribution. The QEP Stock Plan, the annual cash incentive plans adopted by QEP in accordance with Section 10.1(c), and the
long-term cash incentive plan adopted by QEP in accordance with Section 10.2(e) of this Agreement shall be approved prior to the Distribution by Questar as QEP’s sole shareholder. 

Section 2.6 Transfer of Assets. Assets, if any, attributable to the Liabilities referenced in the preceding provisions of this Article II
shall be allocated (if applicable) as provided in the remaining provisions of this Agreement. 
 ARTICLE III 

QUALIFIED DEFINED BENEFIT PLAN 

Section 3.1 Retirement Plan. 

(a) Establishment of New Retirement Plan. Effective as of the Distribution Date, QEP (acting directly or through its Affiliates)
shall establish a qualified defined benefit plan and trust (the “QEP Retirement Plan”) for the benefit of those eligible QEP Employees (and their beneficiaries and alternate payees) who are participants or would have become
participants but for the service requirement in the Questar Retirement Plan as of the Distribution Date, (the “QEP Retirement Plan Participants”); provided, however, that any such individuals who are eligible to participate in the
QEP Supplemental Executive Retirement Plan on the Distribution Date shall not accrue benefits under the QEP Retirement Plan after the Distribution Date. QEP shall be 

 

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responsible for taking all necessary, reasonable and appropriate action to establish, maintain and administer the QEP Retirement Plan so that it is qualified under Section 401(a) of the Code
and the related trust thereunder is exempt under Section 501(a) of the Code. 
 (b) Assumption of Questar Retirement
Plan Liabilities; Transfer of Assets from Questar Retirement Plan. Within ninety (90) days following the Distribution Date (or such later time as mutually agreed by the Parties), Questar shall cause the Assets and Liabilities assumed by QEP
under the Questar Retirement Plan to be transferred to the QEP Retirement Plan (excluding, for the avoidance of doubt, any Assets and Liabilities under the Questar Retirement Plan attributable to QEP Former Employees which shall remain in the
Questar Retirement Plan). QEP shall cause the QEP Retirement Plan to accept such transfer and to assume, fully perform, pay and discharge, all Liabilities under the Questar Retirement Plan relating to all QEP Retirement Plan Participants as of the
Distribution Date. Calculation of the present value of such Liabilities shall be in accordance with the principles of Section 414(l) of the Code and the regulations promulgated thereunder, using interest rates and other assumptions prescribed
by Questar’s actuaries for such purposes. The Assets to be transferred to the QEP Retirement Plan shall have a fair market value equal to the amount required to be transferred in accordance with Section 414(l) of the Code. Assets to be
transferred pursuant to this Section 3.1(b) shall be in kind and/or in cash, as determined by Questar in its discretion. 

(c) No Distributions. No distribution of benefits shall be made to any QEP Participant solely on account of the transfers from the
Questar Retirement Plan described in subsection (b) above. 
 (d) Qualification Failures. The Parties hereto agree
that to the extent either of them becomes aware that either the Questar Retirement Plan or the QEP Retirement Plan fails, or may fail, to be qualified under Section 401(a) of the Code, it shall notify the other Party, and the Parties shall
cooperate and use their best efforts to avoid such disqualification, including using the Employee Plans Compliance Resolution System under Revenue Procedure 2008-50 (or its successor). 

(e) Regulatory Filings. In connection with the transfer of Assets and Liabilities from the Questar Retirement Plan to the QEP
Retirement Plan as discussed in this Article III, Questar and QEP (each acting directly or through their respective Affiliates) shall cooperate in making any and all appropriate filings required by the IRS, or required under the Code, ERISA or any
applicable regulations, and take all such action as may be necessary and appropriate to cause such plan-to-plan transfer to take place as soon as practicable after the establishment of the QEP Retirement Plan. 

ARTICLE IV 

QUALIFIED DEFINED CONTRIBUTION PLAN 

Section 4.1 Questar 401(k) Plan; QEP 401(k) Plan. 

(a) Establishment of the QEP 401(k) Plan. Effective as of the Distribution Date, QEP shall, or shall have caused one of its
Affiliates to, establish a defined contribution plan and trust solely for the benefit of those eligible QEP Employees (and their beneficiaries and alternate 

 

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payees) (the “QEP 401(k) Plan”). QEP shall be responsible for taking all necessary, reasonable and appropriate action to establish, maintain and administer the QEP 401(k) Plan so
that it is qualified under Section 401(a) of the Code and that the related trust thereunder is exempt under Section 501(a) of the Code. QEP (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and
other obligations with respect to the QEP 401(k) Plan. 
 (b) Transfer of Questar 401(k) Plan Assets. Within ninety
(90) days following the Distribution Date (or such later time as mutually agreed by the Parties), Questar shall cause the accounts (including promissory notes related to outstanding participant loans) in the Questar 401(k) Plan attributable to
eligible QEP Employees and all of the Assets in the Questar 401(k) Plan related thereto to be transferred to the QEP 401(k) Plan, and QEP shall cause the QEP 401(k) Plan to accept such transfer of accounts and underlying Assets and, effective as of
the date of such transfer, to assume and to fully perform, pay and discharge, all obligations relating to the accounts of QEP Participants (to the extent the Assets related to those accounts are actually transferred from the Questar 401(k) Plan to
the QEP 401(k) Plan) as of the Distribution Date. The assets to be transferred to the QEP 401(k) Plan shall have a fair market value equal to the amount required to be transferred in accordance with Section 414(l) of the Code. Assets to be
transferred pursuant to this Section 3.1(b) shall be in kind and/or in cash, as determined by Questar in its discretion; provided that the investments in Questar Common Stock and QEP Common Stock shall be transferred in-kind. 

(c) Continuation of Elections. As of the Distribution Date, QEP (acting directly or through its Affiliates) shall cause the QEP
401(k) Plan to recognize and maintain all Questar 401(k) Plan elections, including, but not limited to, deferral, investment, and payment form elections, dividend elections, beneficiary designations, and the rights of alternate payees under
qualified domestic relations orders with respect to eligible QEP Employees, to the extent such election or designation is available under the QEP 401(k) Plan. 

(d) No Distributions. No distribution of account balances shall be made to any QEP Participant solely on account of the transfers
from the Questar 401(k) Plan described in subsection (b) above. 
 (e) Employer Securities. 

(i) Effective immediately after the Distribution Date, a QEP Common Stock fund shall be added as an investment option to
the Questar 401(k) Plan, and there shall be both a QEP Common Stock fund and a Questar Common Stock fund added as investment options to the QEP 401(k) Plan. However, the respective plan fiduciaries have the sole responsibility and discretion to
determine the investment options available under the plans and the extent to which new contributions, earnings or dividends maybe reinvested in such investment options. 

(ii) To the extent not already required by applicable Law, Questar and QEP each presently intend to preserve the right of
Questar Participants and QEP Participants, respectively, to receive distributions in kind from, respectively, the Questar 401(k) Plan and the QEP 401(k) Plan, if, and to the extent, of investments under such plans in investment funds comprised of
Questar Common Stock or QEP Common Stock. 
  

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 (f) Qualification Failures. The Parties hereto agree that to the extent either of
them becomes aware that either the Questar 401(k) Plan or the QEP 401(k) Plan fails, or may fail, to be qualified under Section 401(a) of the Code, it shall notify the other Party, and the Parties shall cooperate and use their best efforts to
avoid such disqualification, including using the Employee Plans Compliance Resolution System under Revenue Procedure 2008-50 (or its successor). 

(g) Regulatory Filings. In connection with the transfer of Assets and Liabilities from the Questar 401(k) Plan to the QEP 401(k)
Plan as discussed in this Article IV, Questar and QEP (each acting directly or through their respective Affiliates) shall cooperate in making any and all appropriate filings required by the IRS, or required under the Code, ERISA or any applicable
regulations, and take all such action as may be necessary and appropriate to cause such plan-to-plan transfer to take place as soon as practicable after the establishment of the QEP 401(k) Plan. 

Section 4.2 Contributions as of the Distribution Date. All contributions payable to the Questar 401(k) Plan with respect to employee
deferrals and contributions, matching contributions and other contributions for QEP Participants through the Distribution Date, determined in accordance with the terms and provisions of the Questar 401(k) Plan, ERISA and the Code, shall be paid by
Questar to the Questar 401(k) Plan prior to the date of the Asset transfer described in Section 4.1(b) of this Agreement. All contributions to be made under the QEP 401(k) Plan on or after the Distribution Date shall be the responsibility of
the QEP Group. 
 ARTICLE V 

HEALTH AND WELFARE PLANS 

Section 5.1 Health and Welfare Plans Maintained By QEP as of the Distribution Date. 

(a) Establishment of the QEP Welfare Plans. Questar or one or more of its Affiliates maintain each of the health and welfare plans
set forth on Schedule A attached hereto (the “Questar Welfare Plans”) for the benefit of eligible Questar Participants and QEP Participants. Effective as of the Distribution Date, QEP shall, or shall cause a QEP Affiliate to, adopt,
for the benefit of eligible QEP Participants, health and welfare plans, the terms of which are substantially comparable, in the aggregate, to the applicable terms of the Questar Welfare Plans as in effect immediately prior to the Distribution Date
(collectively, the “QEP Welfare Plans”), except to the extent provided in Sections 5.1(g) and 5.1(h). To the extent any Questar Welfare Plan is funded through the purchase of an insurance contract, subject to any stop loss contract,
or administered by a third-party vendor, Questar and QEP shall cooperate and use their commercially reasonable efforts to replicate such insurance contracts, stop loss contract, vendor contracts for QEP, to maintain any pricing discounts or other
preferential terms for both Questar and QEP for a reasonable term, and to ensure that any claims experience under the Questar Welfare Plans attributable to QEP participants shall be available to the QEP Welfare Plans through December 31, 2010,
as permitted by any applicable privacy protection laws, regulations or contracts. 
 (b) Terms of Participation in QEP
Welfare Plans. QEP (acting directly or through its Affiliates) shall cause all QEP Welfare Plans to (i) waive all limitations as to preexisting conditions, exclusions, and service conditions with respect to participation and coverage

  

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requirements applicable to QEP Participants, other than limitations that were in effect with respect to QEP Participants as of the Distribution Date under the Questar Welfare Plans, and
(ii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a QEP Participant following the Distribution Date to the extent such QEP Participant had satisfied any similar limitation
under the analogous Questar Welfare Plan. Additionally, the QEP Welfare Plans shall provide that the QEP Participants are credited with or otherwise have taken into account, to the extent applicable, service credits, any expenses incurred towards
deductibles, out-of-pocket limits, maximum benefit payments, and any benefit usage towards plan limits credited to such individual under the terms of the applicable existing Questar Welfare Plans and as if such expenses and usage had originally been
credited to such individual under the QEP Welfare Plans. 
 (c) Cafeteria Plan. As soon as practicable following the
Distribution Date, QEP (acting directly or through its Affiliates) shall establish a “cafeteria plan” (within the meaning of Section 125 of the Code), which shall include a premium payment, health care spending account, and dependent
care spending account (the “QEP Cafeteria Plan”), with features that are comparable to those contained in the cafeteria plan maintained by Questar for the benefit of QEP Participants immediately prior to the Distribution Date (the
“Questar Cafeteria Plan”). Pursuant to Revenue Ruling 2002-32, Questar shall cause the portion of the Questar Cafeteria Plan applicable to the QEP Employees to be segregated into a separate component and the account balances in such
component to be transferred to the QEP Cafeteria Plan. The QEP Cafeteria Plan shall reimburse Questar or the Questar Cafeteria Plan to the extent amounts were paid by the Questar Cafeteria Plan and not collected from the QEP Employee and such
amounts are subsequently collected by the QEP Cafeteria Plan with respect to such QEP Employee. 
 (d) Continuation of
Elections. As of the Distribution Date, QEP (acting directly or through its Affiliates) shall cause the QEP Welfare Plans to recognize and maintain all elections and designations (including all coverage and contribution elections and beneficiary
designations) made by QEP Participants under, or with respect to, the Questar Welfare Plans and apply such elections and designations under the QEP Welfare Plans for the remainder of the period or periods for which such elections or designations are
by their original terms applicable, to the extent such election or designation is available under the corresponding QEP Welfare Plan. 

(e) COBRA and HIPAA. 

(i) Effective as of the Distribution Date, QEP (acting directly or through its Affiliates) shall assume, or shall have
caused the QEP Welfare Plans to assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to QEP Employees (and their dependents) who, as of the day immediately prior to the Distribution
Date, were covered under a Questar Welfare Plan pursuant to COBRA. 
 (ii) Effective as of the Distribution Date,
QEP (acting directly or through its Affiliates) shall be responsible for administering compliance with any certificate of creditable coverage requirements of HIPAA or Medicare applicable to the QEP Welfare Plans with respect to QEP Participants.

  

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 (iii) The Parties hereto agree that neither the Distribution nor any
transfers of employment that occur as of the Distribution Date shall constitute a COBRA qualifying event for purposes of COBRA; provided, that, in all events, QEP (acting directly or through its Affiliates) shall assume, or shall have
caused the QEP Welfare Plans to assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to those Questar Employees whose employment is transferred directly from the Questar Group to the QEP
Group as of the Distribution Date to the extent such individual was, as of the day prior to such transfer of employment, covered under a Questar Welfare Plan. 

(f) Questar to Provide Information. To the extent permitted by law, Questar shall provide QEP (to the extent that relevant
information is in Questar’s possession), data in an acceptable form agreed to by the parties, which provides the names of QEP Participants who were, to the best knowledge of Questar, participants in or otherwise entitled to benefits under the
Questar Welfare Plans, together with each such individual’s service credit under such plans. Questar shall also provide (or cause its plan administrators to provide) to QEP or QEP’s plan administrators, information concerning each such
individual’s expenses incurred towards deductibles, out-of-pocket limits, maximum benefit payments, and any benefit usage towards plan limits thereunder. Questar shall, as soon as practicable after requested, provide QEP with such additional
information in Questar’s possession (and not already in the possession of a member of the QEP Group) as may be reasonably requested by QEP and necessary to administer effectively any QEP Welfare Plan. Questar and each member of the QEP Group
shall enter into such other agreements as are necessary to comply with this subsection (f), including but not limited to any agreements required by the HIPAA.  

(g) Retiree Medical and Life Insurance Benefits. 

(i) QEP Employees. Effective as of the Distribution Date, all members of the QEP Retiree Welfare Benefits Eligible
Group (and their eligible spouses and dependents, as applicable) shall, for purposes of retiree medical and life insurance benefits, cease to be eligible or potentially eligible (as applicable) for such benefits under the Questar Welfare Plans and
become eligible or potentially eligible (as applicable) for such benefits under a QEP Welfare Plan. 
 (ii)
Former QEP Employees. Former QEP Employees (and their eligible spouses and dependents, as applicable) who, immediately prior to the Distribution Date, are eligible to receive or are receiving retiree medical and life insurance benefits under
a Questar Welfare Plan shall continue to participate in the Questar Welfare Plans with respect to such benefits and shall not become eligible for such benefits under any QEP Welfare Plan. 

(iii) Former QEP Employees on LTD. Each Former QEP Employee who both (A) is receiving long-term disability
benefits under a Questar Welfare Plan immediately prior to the Distribution Date and (B) as of the Distribution Date, continues to be eligible for and receives long-term disability benefits under a Questar Welfare Plan when such Former QEP
Employee elects to commence benefits under the Questar Retirement Plan, shall be permitted at the time of such election to elect retiree medical benefits (for the 

 

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benefit of such Former QEP Employee and/or such individual’s eligible spouse and dependents, as applicable) only under such Questar Welfare Plan (and not any QEP Welfare Plan). 

(iv) Retiree Benefits under the QEP Welfare Plans. This Section 5.1(g) is not intended to create any
obligation to provide benefits to any person, but rather, is intended merely to allocate such obligations to the extent they may already exist. To the extent that retiree medical and life benefits are offered to any eligible person under the QEP
Welfare Plans pursuant to this Section 5.1(g), such benefits shall be substantially comparable, in the aggregate, to the applicable terms of the retiree medical and life benefits provided under the Questar Welfare Plans immediately prior to the
Distribution Date; provided that QEP may from time to time amend the QEP Welfare Plans to increase premiums, co-payments and deductibles with respect to retiree medical and life insurance benefits and make any other changes. 

(h) Liabilities. 

(i) Insured Benefits. With respect to employee welfare and fringe benefits that are provided through the purchase
of insurance, Questar shall cause the Questar Welfare Plans to, through such insurance policies, pay and discharge all eligible claims of QEP Participants that are incurred prior to the Distribution Date, and QEP shall cause the QEP Welfare Plans
to, through such insurance policies, pay and discharge all eligible claims of QEP Participants that are incurred on or after the Distribution Date. 

(ii) Self-Insured Benefits. With respect to employee welfare and fringe benefits that are provided on a
self-insured basis, (A) except as provided in this Agreement, Questar (acting directly or through its Affiliates) shall fully perform, pay and discharge, under the Questar Welfare Plans, all eligible claims of QEP Participants who are QEP
Employees (and their dependents) that are incurred but not paid prior to the Distribution Date, and (B) QEP (acting directly or through its Affiliates) shall fully perform, pay and discharge, under the QEP Welfare Plans, from and after the
Distribution Date, all eligible claims of QEP Participants who are QEP Employees (and their dependents) that are incurred on or after the Distribution Date. 

(iii) Short-term and Long-term Disability Benefits. Effective as of the Distribution Date, QEP shall assume, be
liable for and provide under the QEP Welfare Plans for any (A) short-term disability benefits to a QEP Employee regardless of whether the date of the disability occurred prior to the Distribution Date; and (B) any long-term disability
benefits to a QEP Employee after the Distribution Date. Any Former QEP Employee receiving long-term disability benefits under a Questar Welfare Plan as of immediately prior to the Distribution Date shall on and after the Distribution Date continue
to be eligible to receive such benefits under a Questar Welfare Plan. 
 (iv) Incurred Claim Definition.
For purposes of this Section 5.1(h), a claim or Liability shall generally be deemed to be incurred (A) with respect to medical, dental, vision and/or prescription drug benefits, on the date that the health services giving rise to such
claim or Liability are rendered or performed and not when such claim is made, 
  

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provided however that with respect to a period of continuous hospitalization, a claim is incurred upon the first date of such hospitalization and not on the date that such services are performed
and (B) with respect to life insurance, accidental death and dismemberment and business travel accident insurance, upon the occurrence of the event giving rise to such claim or Liability. 

Section 5.2 VEBA. Effective as of the Distribution Date, Questar shall retain responsibility for all Liabilities and fully perform, pay and
discharge all obligations under the VEBA and, effective as of the Distribution Date, QEP shall have no obligation with respect thereto. 

Section 5.3 Time-Off Benefits. QEP shall credit each QEP Participant with the amount of accrued PTO benefits as such QEP Participant had with
the Questar Group as of the Distribution Date. 
 ARTICLE VI 

PAYROLL REPORTING AND WITHHOLDING 

Section 6.1 Form W-2 Reporting. 

(a) Questar Payroll. With respect to QEP Employees, the Parties shall adopt the “alternative procedure” for preparing
and filing IRS Forms W-2 (Wage and Tax Statements), as described in Revenue Procedure 2004-53 (“Rev. Proc. 2004-53”). In accordance with this procedure, QEP (and its Affiliates) as the successor employer shall provide all required
Forms W-2 to all QEP Employees reflecting all wages paid and taxes withheld by both Questar as the predecessor and the QEP Group members as the successor employer for the 2010 calendar year. 

(b) Form 941. Each Party shall be responsible for filing IRS Forms 941 for its respective employees. 

Section 6.2 Forms W-4 and W-5. With respect to QEP Employees, the Parties shall adopt the alternative procedure of Rev. Proc. 2004-53 for
purposes of filing IRS Forms W-4 (Employee’s Withholding Allowance Certificate) and W-5 (Earned Income Credit Advance Payment Certificate). In accordance with this procedure, Questar shall provide to QEP and its Affiliates, as appropriate, all
IRS Forms W-4 and W-5 on file with respect to each QEP Employee, and QEP and its Affiliates shall honor these forms until such time, if any, that such QEP Employee submits a revised form. 

Section 6.3 Garnishments, Tax Levies, Child Support Orders, and Wage Assignments. With respect to garnishments, tax levies, child support
orders, and wage assignments in effect with Questar on the Distribution Date for any QEP Employees, QEP and its Affiliates, as appropriate, shall honor such payroll deduction authorizations and shall continue to make payroll deductions and payments
to the authorized payee, as specified by the court or governmental order which was on file with Questar as of immediately prior to the Distribution Date. Questar shall, as soon as practicable after the Distribution Date, provide QEP and its
Affiliates, as appropriate, with such information in Questar’s possession (and not already in the possession of a member of the QEP Group) as may be reasonably requested by the QEP Group and necessary for the QEP Group to make the payroll
deductions and payments to the authorized payee as required by this Section 6.3. 
  

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 Section 6.4 Authorizations for Payroll Deductions. Unless otherwise prohibited by a Benefit Plan
or by this Agreement or an Ancillary Agreement, QEP and its Affiliates, as appropriate, shall honor payroll deduction authorizations attributable to QEP Employees that are in effect with Questar on the Distribution Date relating to each QEP
Employee, and shall not require that such QEP Employee submit a new authorization to the extent that the type of deduction by QEP or its Affiliates, as appropriate, does not differ from that made by Questar. Such deduction types include, without
limitation: contributions to any QEP Benefit Plan, including any voluntary benefit plan; political action committee contributions, scheduled loan repayments to any QEP Benefit Plan or under the Questar Appliance Purchase Program; and direct deposit
of payroll, employee relocation loans, and other types of authorized company receivables usually collectible through payroll deductions. Each Party shall, as soon as practicable after the Distribution Date, provide the other Party with such
information in its possession as may be reasonably requested by the other Party and as necessary for that Party to honor the payroll deduction authorizations contemplated by this Section 6.4. 

ARTICLE VII 

LABOR AND EMPLOYMENT MATTERS 

Section 7.1 Separate Employers. Subject to the provisions of ERISA and the Code, on and after the Distribution Date, Questar and each member
of the QEP Group shall be separate and independent employers. 
 Section 7.2 Employment Litigation. The QEP Group shall have the
sole responsibility for all employment-related claims regarding QEP Employees or Former QEP Employees relating to, arising out of, or resulting from the employment of such individuals within the QEP Business for matters not covered in this
Agreement, whether the basis for such claims arose before, on, or after the Distribution Date. The Questar Group shall have the sole responsibility for all employment-related claims regarding Questar Employees or Former Questar Employees relating
to, arising out of, or resulting from the employment of such individuals within the Questar Business with respect to matters not covered in this Agreement, whether the basis for such claims arose before, on, or after the Distribution Date.

 Section 7.3 Notice of Claims. Each Party hereto shall, when applicable, notify in writing and consult with the other Party prior
to making any settlement of an employee claim, for the purpose of avoiding any prejudice to such other Party arising from the settlement. 

ARTICLE VIII 

NONQUALIFIED RETIREMENT PLANS 

Section 8.1 Establishment of QEP Nonqualified Retirement Plans. Questar maintains each of the nonqualified deferred compensation plans set
forth on Schedule B attached hereto (the “Questar Nonqualified Plans”) for the benefit of eligible Questar Participants and QEP Participants. Effective as of the Distribution Date, QEP shall, or shall cause one of its Affiliates to,
(i) establish nonqualified deferred compensation plans solely for the benefit of those eligible QEP Employees who either have account balances or accrued benefits or were eligible to participate under the applicable Questar Nonqualified Plan
immediately prior to the Distribution Date, the terms of which are substantially comparable, in the aggregate, to the terms of the 

 

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applicable Questar Nonqualified Plan as in effect immediately prior to the Distribution Date, and (ii) cause the nonqualified deferred compensation plan established for the benefit of
certain QEP Employees who were participants in the Questar Supplemental Executive Retirement Plan (the “Questar SERP”) immediately prior to the Distribution Date to (A) reflect the accrued benefit of such QEP Employees under
the Questar SERP immediately prior to the Distribution Date, and (B) effective on and after the Distribution Date, provide for a benefit formula that takes into account the benefit that such QEP Employees would have received under the QEP
Retirement Plan following the Distribution Date (the “QEP Supplemental Executive Retirement Plan”) (collectively, the “QEP Nonqualified Plans”). Effective as of the Distribution Date, QEP shall cause the QEP
Nonqualified Plans to assume responsibility for all Liabilities and fully perform, pay and discharge all obligations, when such obligations become due, under the Questar Nonqualified Plans with respect to all eligible QEP Employees (excluding, for
the avoidance of doubt, any amounts attributable to QEP Former Employees which shall remain in the Questar Nonqualified Plans). QEP (acting directly or through its Affiliates) shall be responsible for any and all Liabilities (including Liability for
funding if any) and other obligations with respect to the QEP Nonqualified Plans. 
 Section 8.2 Continuation of Elections. As of
the Distribution Date, QEP (acting directly or through an Affiliate) shall cause the QEP Nonqualified Plans to recognize and maintain all elections (including deferral, distribution and investment elections) and beneficiary designations with respect
to QEP Participants under the respective Questar Nonqualified Plans to the extent such elections or designations are available under the QEP Nonqualified Plans until a new election that by its terms supersedes such original election is made by the
QEP Participant in accordance with Section 409A of the Code, applicable Law and the terms and conditions of the QEP Nonqualified Plans. 

ARTICLE IX 

LONG-TERM STOCK INCENTIVE AWARDS 

Section 9.1 Treatment of Outstanding Questar Options. 

(a) Each Questar Option that is outstanding immediately prior to the Distribution Date shall, as of the Distribution Date, be converted
into a QEP Option and an adjusted Questar Option (each a “Post-Distribution Questar Option”) in accordance with the succeeding paragraphs of this Section 9.1. 

(b) The number of shares subject to the QEP Option shall be equal to the number of shares of QEP Common Stock to which the option holder
would be entitled in the Distribution had the shares subject to the Questar Option represented outstanding shares of Questar Common Stock as of the Record Date. The per share exercise price of the Post-Distribution Questar Option shall be equal to
the closing Questar “ex-dividend” share price, divided by the sum of the closing QEP “when issued” share price plus the closing Questar “ex-dividend” share price, in each case on the Distribution Date, multiplied by the
per share exercise price of the Questar Option. The per share exercise price of the QEP Option shall be equal to the closing QEP “when issued” share price, divided by the sum of the closing QEP “when issued” share price plus the
closing Questar “ex-dividend” share price, in each case on the Distribution Date, multiplied by the per share exercise price of the Questar Option. See Schedule D attached hereto for an example of such calculation. 

 

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 (c) Prior to the Distribution Date, Questar shall amend the applicable Questar Stock Plans
and applicable award agreements as necessary, effective as of the Distribution Date, to provide that for purposes of the Post-Distribution Questar Options (including in determining exercisability and the post-termination exercise period), a QEP
Employee’s continued service with the QEP Group following the Distribution Date shall be deemed continued service with Questar. QEP shall issue each QEP Option under the QEP Stock Plan, which shall provide that, except as otherwise provided
herein, the terms and conditions applicable to the QEP Options shall be substantially similar to the terms and conditions applicable to the corresponding Questar Option, including the terms and conditions relating to vesting and the post-termination
exercise period (as set forth in the applicable plan, award agreement or in the option holder’s then applicable employment agreement with Questar or its Affiliates, which terms shall remain in effect even after the expiration or termination of
such employment agreement) and including a provision to the effect that, for purposes of the QEP Options, continued service with the Questar Group from and after the Distribution Date shall be deemed to constitute service with QEP. 

(d) The QEP Options and the Post-Distribution Questar Options shall remain subject to the terms and conditions of the underlying Questar
Option as in effect immediately prior to the Distribution Date, including any Detrimental Conduct Provisions and terms relating to post-termination exercise periods provided for in any option holder’s employment agreement. 

(e) Upon the exercise of a QEP Option, regardless of the holder thereof, the exercise price shall be paid to (or otherwise satisfied to
the satisfaction of) QEP in accordance with the terms of the QEP Option, and QEP shall be solely responsible for the issuance of QEP Common Stock, for ensuring the withholding of all applicable tax on behalf of the employing entity of such holder,
and for ensuring the remittance of such withholding taxes to the employing entity of such holder. Upon the exercise of a Questar Option, regardless of the holder thereof, the exercise price shall be paid to (or otherwise satisfied to the
satisfaction of) Questar in accordance with the terms of the Questar Option, and Questar shall be solely responsible for the issuance of Questar Common Stock, for ensuring the withholding of all applicable tax on behalf of the employing entity of
such holder and for ensuring the remittance of such withholding taxes to the employing entity of such holder. 
 Section 9.2 Treatment
of Outstanding Questar Restricted Stock. 
 (a) Each holder as of the Record Date of Questar Restricted Shares that remain
outstanding immediately prior to the Distribution Date shall receive, upon the Distribution being made, such number of QEP Restricted Shares as equals the number of shares of QEP Common Stock to which all other holders of shares of Questar Common
Stock shall be entitled to receive upon the Distribution being made. The Questar Restricted Shares outstanding following the Distribution having been made are hereinafter referred to as “adjusted Questar Restricted Shares.” The QEP
Restricted Shares and the adjusted Questar Restricted Shares shall be subject to the succeeding paragraphs of this Section 9.2. 
  

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 (b) All QEP Restricted Shares and adjusted Questar Restricted Shares shall become vested
upon the date the Questar Restricted Shares would have otherwise vested in accordance with the existing vesting schedule. 
 (c)
Prior to the Distribution Date, Questar shall amend the applicable Questar Stock Plans as necessary, effective as of the Distribution Date, to provide that for purposes of continued vesting of the adjusted Questar Restricted Shares, a QEP
Employee’s continued service with the QEP Group following the Distribution Date shall be deemed continued service with Questar. The issuance of each QEP Restricted Share shall be subject to the terms of the QEP Stock Plan, which shall provide
that, except as otherwise provided herein, the terms and conditions applicable to the QEP Restricted Shares shall be substantially similar to the terms and conditions applicable to the corresponding Questar Restricted Shares (as set forth in the
applicable plan, award agreement or in the holder’s then applicable employment agreement with Questar or its Affiliates, which terms shall remain in effect even after the expiration or termination of such employment agreement), including any
Detrimental Conduct Provisions, and including a provision to the effect that, for purposes of the QEP Restricted Shares, continued service with the Questar Group from and after the Distribution Date shall be deemed to constitute service with QEP.

 (d) Upon the vesting of the QEP Restricted Shares, QEP shall be solely responsible for the settlement of all QEP Restricted
Shares, regardless of the holder thereof, and for ensuring the satisfaction of all applicable tax withholding requirements on behalf of the employing entity of such holder and for ensuring the remittance of such withholding taxes to the employing
entity of such holder. Upon the vesting of the Questar Restricted Shares, Questar shall be solely responsible for the settlement of all Questar Restricted Shares, regardless of the holder thereof, and for ensuring the satisfaction of all applicable
tax withholding requirements on behalf of the employing entity of such holder and for ensuring the remittance of such withholding taxes to the employing entity of such holder. 

Section 9.3 No Accelerated Vesting. The Parties hereto acknowledge and agree that the vesting of any Questar Options, QEP Options, Questar
Restricted Shares and QEP Restricted Shares shall not accelerate by reason of the transactions contemplated by the Separation Agreement and this Agreement. 

Section 9.4 Tax Deduction. The Parties mutually agree that each of the applicable tax deductions to which they may be entitled for federal
income tax purposes with regard to the QEP Options and the Post-Distribution Questar Options (pursuant to Section 9.1) and the QEP Restricted Shares and the adjusted Questar Restricted Shares (pursuant to Section 9.2) shall be determined
in accordance with Revenue Ruling 2002-1. 
 Section 9.5 Cooperation. Each of the Parties shall establish an appropriate
administration system in order to handle in an orderly manner exercises of Questar Options and QEP Options and the settlement of Questar Restricted Shares and QEP Restricted Shares. Each of the Parties shall work together to unify and consolidate
all indicative data and payroll and employment information on regular timetables and make certain that each applicable entity’s data and records in respect of such awards are correct and updated on a timely basis. The foregoing shall include
employment status and information required for tax withholding/remittance, compliance with trading windows and compliance with the requirements of the Exchange Act and other applicable Laws. 

 

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 Section 9.6 SEC Registration. The Parties mutually agree to use commercially reasonable efforts
to maintain effective registration statements with the SEC with respect to the long-term incentive awards described in this Article IX, to the extent any such registration statement is required by applicable Law. 

Section 9.7 Savings Clause. The Parties hereby acknowledge that the provisions of this Article IX are intended to achieve certain tax, legal
and accounting objectives and, in the event such objectives are not achieved, the Parties agree to negotiate in good faith regarding such other actions that may be necessary or appropriate to achieve such objectives. 

ARTICLE X 

ADDITIONAL COMPENSATION MATTERS; SEVERANCE 

Section 10.1 Annual Cash Incentive Awards. 

(a) QEP Assumption of Annual Cash Incentive Liability. Questar maintains each of the annual cash incentive plans in which QEP
Participants are eligible to participate as set forth on Schedule C attached hereto (excluding, for the avoidance of doubt, any such annual cash incentive plans maintained by QEP or its subsidiaries) (the “Questar Annual Cash Incentive
Plans”). Effective as of the Distribution Date, QEP shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge all obligations, when such obligations become due, relating to any awards
that any QEP Participant is eligible to receive under the Questar Annual Cash Incentive Plans with respect to calendar year 2010 and, except as otherwise provided in this Agreement, Questar shall have no obligation with respect thereto after the
Distribution Date. 
 (b) Questar Assumption of Annual Cash Incentive Liability. Effective as of the Distribution Date,
Questar shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge all obligations relating to any awards that any Questar Participant is eligible to receive under the Questar Annual Cash Incentive
Plans with respect to calendar year 2010 and, except as otherwise provided in this Agreement, QEP shall have no obligation with respect thereto after the Distribution Date. 

(c) Establishment of QEP Annual Cash Incentive Plan. Effective as of the Distribution Date, QEP shall have adopted an annual cash
incentive plan which shall permit the issuance of annual cash incentive awards on terms and conditions substantially comparable to those under the Questar Annual Cash Incentive Plans for the benefit of the QEP Employees (provided that the payment
amounts and individual performance criteria shall be established in the discretion of the QEP Board of Directors or the Management Performance Committee thereof). 

Section 10.2 Long-Term Cash Incentive Awards. 

(a) Conversion to Restricted Stock Awards for 2009-2011 and 2010-2012 Performance Periods. Questar maintains the Questar
Corporation Long-Term Cash Incentive 
  

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Plan as amended and restated effective October 28, 2008 (the “Questar Long-Term Cash Incentive Plan”) for the benefit of eligible Questar Participants and QEP Participants.
Certain awards granted thereunder shall be subject to the following adjustments: 
 (i) Each outstanding award
granted to a QEP Participant under the Questar Long-Term Cash Incentive Plan for each of the 2009-2011 and 2010-2012 performance periods shall, as of the Distribution Date, be converted from an award payable in cash to an award of a number of QEP
Restricted Shares equal to the quotient obtained by dividing (x) the Cash Award Value (as defined herein) of the applicable award granted to the QEP Participant under the Questar Long-Term Cash Incentive Plan, by (y) the closing price of
QEP Common Stock on the day immediately following the Distribution Date (rounding any fractional shares up to the next whole number of shares). 

(ii) Each outstanding award granted to a Questar Participant under the Questar Long-Term Cash Incentive Plan for each of
the 2009-2011 and 2010-2012 performance periods shall, as of the Distribution Date, be converted from an award payable in cash to an award of a number of Questar Restricted Shares equal to the quotient obtained by dividing (x) the Cash Award
Value (as defined herein) of the applicable award granted to the Questar Participant under the Questar Long-Term Cash Incentive Plan, by (y) the closing price of Questar Common Stock on the day immediately following the Distribution Date
(rounding any fractional shares up to the next whole number of shares). 
 For purposes of this Section 10.2(a), the “Cash Award
Value” shall mean, with respect to each applicable award granted under the Questar Long-Term Cash Incentive Plan, the dollar amount equal to the greater of (i) the participant’s full target bonus amount under the award, or
(ii) the value of the award for the applicable performance period determined as of the Distribution Date by applying to the participant’s full target bonus the multiplier specified thereunder based on the achievement of the performance
goals thereunder from the beginning of the applicable performance period through the Distribution Date, using the higher of (A) the combined closing QEP “when issued” share price and the closing Questar “ex-dividend” share
price, in each case on the Distribution Date, or (B) the closing Questar “regular way” share price on the Distribution Date. All QEP Restricted Shares and Questar Restricted Shares granted pursuant to this Section 10.2(a) shall
become vested upon the date on which the corresponding cash award for the 2009-2011 and 2010-2012 performance period, as applicable, would have otherwise been paid under the terms of the Questar Long-Term Cash Incentive Plan, subject to such other
terms and conditions set forth in the applicable award agreement and the respective QEP Stock Plan or Questar Stock Plan. 
 (b)
Combined Performance Results of Questar and QEP for 2008-2010 Performance Period. For purposes of determining the achievement of the performance goals with respect to the awards granted to eligible Questar Participants and QEP Participants
under the Questar Long-Term Cash Incentive Plan for the 2008-2010 performance period, the financial performances of Questar and QEP shall be considered in the aggregate with respect to each company performance objective set forth therein, and any
payments due shall be paid in cash pursuant to the terms of the plan, provided, that the chief financial officers of both Questar and QEP mutually agree on the determination of any payouts thereunder. 

 

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 (c) QEP Assumption of Long-Term Cash Incentive Liability. Effective as of the
Distribution Date, QEP shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge all obligations, when such obligations become due, relating to any awards that any QEP Participant is eligible to
receive under the Questar Long-Term Cash Incentive Plan with respect to the 2008-2010 performance period (subject to Section 10.2(b)) and with respect to the 2009-2011 and 2010-2012 performance periods (subject to Section 10.2(a)), and
except as otherwise provided in this Agreement, Questar shall have no obligation with respect thereto after the Distribution Date. 

(d) Questar Assumption of Long-Term Cash Incentive Liability. Effective as of the Distribution Date, Questar shall assume or
retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge all obligations relating to any awards that any Questar Participant is eligible to receive under the Questar Long-Term Cash Incentive Plan with respect to
the 2008-2010 (subject to Section 10.2(b)), 2009-2011 and 2010-2012 performance periods, and except as otherwise provided in this Agreement, QEP shall have no obligation with respect thereto after the Distribution Date. 

(e) Establishment of QEP Long-Term Cash Incentive Plan. Effective as of the Distribution Date, QEP shall have adopted a long-term
cash incentive plan which shall permit the issuance of long-term cash incentive awards on terms and conditions substantially comparable to those under the Questar Annual Cash Incentive Plans (provided that the payment amounts and individual
performance criteria shall be established in the discretion of the QEP Board of Directors or the Management Performance Committee thereof). 

Section 10.3 Individual Arrangements. 

(a) Questar Individual Arrangements. Questar acknowledges and agrees that, except as otherwise provided herein, it shall have full
responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to any employment, consulting, non-competition, retention or other compensatory arrangement previously provided by any member
of the Questar Group or QEP Group to any Questar Participant. 
 (b) QEP Individual Arrangements. QEP acknowledges and
agrees that, except as otherwise provided herein, it shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to any employment, consulting, non-competition,
retention or other compensatory arrangement previously provided by any member of the Questar Group or QEP Group to any QEP Participant. 

Section 10.4 Severance Liabilities. 

(a) Establishment of QEP Executive Severance Plan. Effective as of the Distribution Date, QEP shall take all steps necessary to
establish for a select group of management and highly compensated QEP Employees, a severance plan which shall provide severance benefits comparable to those provided under the Questar Executive Severance Plan (the “QEP Executive Severance
Plan”). 
 (b) Assumption of Severance Liabilities. Effective as of the Distribution Date, QEP shall assume or
retain, as applicable, responsibility for all Liabilities and fully perform, pay and 
  

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discharge all obligations, when such obligations become due, relating to any severance benefit to which a QEP Participant is entitled under the Questar Executive Severance Plan as of the
Distribution Date. Likewise, Questar shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge all obligations, when such obligations become due, relating to any severance benefit to which a
Questar Participant is entitled under the Questar Executive Severance Plan as of the Distribution Date. 
 (c) Effect of the
Separation on Severance. Questar and QEP acknowledge and agree that the transactions contemplated by this Agreement and the Separation Agreement shall not constitute a termination of employment of any QEP Participant for purposes of any policy,
plan, program or agreement of Questar or QEP or any member of the Questar Group or QEP Group that provides for the payment of severance, separation pay, salary continuation or similar benefits in the event of a termination of employment. 

(d) QEP Liability for Separation Payments to Questar Corporation Employees. Schedule E attached hereto sets forth a list of
Questar Employees and/or job titles of individuals who are employed by Questar immediately prior to the Distribution Date and whose employment with Questar shall be terminated within six (6) months following the Distribution Date as a result of
the Separation. QEP shall be obligated to pay to Questar an amount equal to 56.33% of the total severance compensation and benefits payable to such Questar Employees within thirty (30) days following the date of such termination of employment,
not to exceed, in the aggregate, $372,083, plus the expense of accelerated vesting of any equity awards. 
 (e) QEP
Contribution for Payments to Questar Chairman, President and CEO. In the event that Questar agrees to a compensation package in connection with the termination of employment of its Chairman, President and CEO as of the Distribution Date, QEP
shall pay to Questar on the Distribution Date an amount equal to 56.33% of the total compensation and benefits payable pursuant to such agreement. Such total compensation and benefits payable shall include any cash payment (in the form of a
separation payment and recognition bonus payment) due under the terms of any separation agreement by and between Questar and such person, plus the expense of accelerated vesting of any outstanding restricted shares or unvested stock options pursuant
to the terms of such separation agreement. 
 Section 10.5 Workers’ Compensation Liabilities. 

(a) Pre-Distribution Date Claims. Except as set forth below, all workers’ compensation Liabilities relating to, arising out
of, or resulting from any claim by a QEP Employee or Former QEP Employee that results from an accident, incident or event occurring, or from an occupational disease which becomes manifest, before the Distribution Date shall be assumed or retained by
QEP. Notwithstanding the foregoing, QEP shall not assume or retain any workers’ compensation Liability relating to, arising out of, or resulting from any claim by a QEP Employee that results from an accident, incident or event occurring, or
from an occupational disease which becomes manifest, while such QEP Employee was employed by any member of the Questar Group (such a claim, a “Questar Retained Claim”). All workers’ compensation Liabilities relating to, arising
out of, or resulting from (i) any Questar Retained Claim or (ii) any claim by a Questar Employee or Former Questar Employee that results from an accident, incident, or event occurring, or from an occupational disease which becomes manifest
before the Distribution Date shall be assumed or retained by Questar. 
  

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 (b) Post-Distribution Date Claims. All workers’ compensation Liabilities
relating to, arising out of, or resulting from any claim by a QEP Employee or Former QEP Employee that results from an accident, incident or event occurring, or from an occupational disease which becomes manifest, on or after the Distribution Date
shall be assumed or retained by QEP. All workers’ compensation Liabilities relating to, arising out of, or resulting from any claim by a Questar Employee or Former Questar Employee that results from an accident, incident or event occurring, or
from an occupational disease which becomes manifest, on or after the Distribution Date shall be assumed or retained by Questar. 

(c) General. For purposes of this Section 10.5, a compensable injury shall be deemed to be sustained upon the occurrence of
the event giving rise to eligibility for workers’ compensation benefits or an occupational disease becomes manifest, as the case may be. Questar and QEP shall cooperate in good faith with respect to the notification to appropriate governmental
agencies of the Distribution and the issuance of new, or the transfer of existing, workers’ compensation insurance policies and claims handling contracts. 

Section 10.6 Director Programs. 

(a) Establishment of QEP Deferred Compensation Plan for Directors. Effective as of the Distribution Date, QEP shall, or shall
cause one of its Affiliates to, establish a nonqualified deferred compensation plan for the benefit of members of the QEP Board of Directors who have account balances or were eligible to participate under the Questar Deferred Compensation Plan for
Directors immediately prior to the Distribution Date, the terms of which are substantially comparable, in the aggregate, to the terms of the Questar Deferred Compensation Plan for Directors as in effect immediately prior to the Distribution Date
(the “QEP Deferred Compensation Plan for Directors”). Effective as of the Distribution Date, QEP shall cause the QEP Deferred Compensation Plan for Directors to assume responsibility for all Liabilities and fully perform, pay and
discharge all obligations, when such obligations become due, of the Questar Nonqualified Plans with respect to all members of the QEP Board of Directors who were participants or eligible to participate therein. QEP (acting directly or through its
Affiliates) shall be responsible for any and all Liabilities (including Liability for funding) and other obligations with respect to the QEP Deferred Compensation Plan for Directors. 

(b) Continuation of Elections. As of the Distribution Date, QEP (acting directly or through an Affiliate) shall cause the QEP
Deferred Compensation Plan for Directors to recognize and maintain all elections (including deferral, distribution and investment elections) and beneficiary designations with respect to participating members of the QEP Board of Directors under the
Questar Deferred Compensation Plan for Directors to the extent such elections or designations are available under the QEP Deferred Compensation Plan for Directors until a new election that by its terms supersedes such original election is made by
the participating member of the QEP Board of Directors in accordance with Section 409A of the Code, applicable Law and the terms and conditions of the QEP Deferred Compensation Plan for Directors. 

 

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 (c) Certain Director Fees. Except as set forth in Section 10.6(a), Questar shall
retain responsibility for the payment of any fees payable in respect of service on the Questar Board of Directors that are payable but not yet paid as of the Distribution Date, and QEP shall have no responsibility for any such payments (to an
individual who is a member of the QEP Board of Directors as of the Distribution Date or otherwise). 
 Section 10.7
Section 409A. Notwithstanding anything in this Agreement to the contrary, with respect to any compensation or benefits that may be subject to Section 409A of the Code and related Department of Treasury guidance thereunder
(including, without limitation, any supplemental and deferred compensation plans, outstanding long-term incentive awards, long-term cash incentive awards and annual cash incentive awards as described herein), the Parties agree to negotiate in good
faith regarding any treatment different from that otherwise provided herein to the extent necessary or appropriate to (i) exempt such compensation and benefits from Section 409A of the Code, (ii) comply with the requirements of
Section 409A of the Code and related Department of Treasury guidance, and/or (iii) otherwise avoid the imposition of tax under Section 409A of the Code; provided, however, that this Section 10.7 does not create an obligation on
the part of either Party to adopt any amendment, policy or procedure, to take any other action or to indemnify any Person for any failure to do any of the foregoing. 

ARTICLE XI 

INDEMNIFICATION 

Section 11.1 General Indemnification. Any claim for indemnification under this Agreement shall be governed by, and be subject to, the
provisions of Article VII of the Separation Agreement, which provisions are hereby incorporated by reference into this Agreement and any references to “Agreement” in such Article VII as incorporated herein shall be deemed to be references
to this Agreement. 
 ARTICLE XII 

GENERAL AND ADMINISTRATIVE 

Section 12.1 Non-Solicitation. Each Party agrees that it shall not, and it shall cause its Affiliates (such Party and its Affiliates
collectively, the “Hiring Party”) not to, prior to the second anniversary of the Distribution Date, knowingly, directly or indirectly, on their own behalf or in the service or on behalf of others, solicit, aid, induce or encourage any
individual who is a current employee of the other Party or the other Party’s Affiliates to leave his or her employment and to work for such Hiring Party or others without the prior written Consent of the other Party. The restrictions
contained in this Section 12.1 shall not apply to (i) general solicitations not specifically directed to any employee of a Party or its Affiliates (including a search firm who has not been encouraged or advised to approach any such
employee), and (ii) any solicitation or hiring of an individual who is no longer employed by a Party or its Affiliates at the time of such solicitation or hiring. 

Section 12.2 Sharing Of Information. Each Party (acting directly or through its Affiliates) shall provide to the other Party and its agents
and vendors all Information as the other Party may reasonably request to enable the requesting Party to administer efficiently and accurately each of its Benefit Plans and to determine the scope of, as well as fulfill, its obligations under this

  

 25 

 
Agreement. Such information shall, to the extent reasonably practicable, be provided in the format and at the times and places requested, but in no event shall the Party providing such
information be obligated to incur any out-of-pocket expenses not reimbursed by the requesting Party or make such information available outside of its normal business hours and premises. Any information shared or exchanged pursuant to this Agreement
shall be subject to the confidentiality requirements set forth in the Separation Agreement. The Parties also hereby agree to enter into any business associate agreements that may be required for the sharing of any Information pursuant to this
Agreement to comply with the requirements of HIPAA. 
 Section 12.3 Reasonable Efforts/Cooperation. Each Party shall use its
commercially reasonable efforts to promptly take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this
Agreement, including adopting plans or plan amendments. Each of the Parties hereto shall cooperate fully on any issue relating to the transactions contemplated by this Agreement for which the other Party seeks a determination letter or private
letter ruling from the IRS, an advisory opinion from the DOL or any other filing, consent or approval with respect to or by a Governmental Entity 

Section 12.4 Employer Rights. Nothing in this Agreement shall prohibit QEP or any QEP Affiliate from amending, modifying or terminating any
QEP Benefit Plan at any time within its sole discretion. In addition, nothing in this Agreement shall prohibit Questar or any Questar Affiliate from amending, modifying or terminating any Questar Benefit Plan at any time within its sole discretion.

 Section 12.5 Effect on Employment. Except as expressly provided in this Agreement, none of the Distribution or any of the actions
taken in connection with the Distribution shall in and of itself cause any employee to be deemed to have incurred a termination of employment or service which entitles such individual to the commencement of benefits under any of the Questar Benefit
Plans. Furthermore, nothing in this Agreement is intended to confer upon any employee or former employee of Questar, QEP or either of their respective Affiliates any right to continued employment, or any recall or similar rights to an individual on
layoff or any type of approved leave. 
 Section 12.6 Consent Of Third Parties. If any provision of this Agreement is dependent on
the Consent of any third party and such Consent is withheld, the Parties hereto shall use their reasonable best efforts to implement the applicable provisions of this Agreement to the fullest extent practicable. If any provision of this Agreement
cannot be implemented due to the failure of such third party to consent, the Parties hereto shall negotiate in good faith to implement the provision in a mutually satisfactory manner. 

Section 12.7 Access To Employees. Following the Distribution Date, Questar and QEP shall, or shall cause each of their respective Affiliates
to, make available to each other those of their employees who may reasonably be needed in order to defend or prosecute any legal or administrative action (other than a legal action between Questar and QEP) to which any employee, director or Benefit
Plan of the Questar Group or QEP Group is a party and which relates to their respective Benefit Plans prior to the Distribution Date. The Party to whom an employee is made available in accordance with this Section 12.7 shall pay or reimburse
the other 
  

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Party for all reasonable expenses which may be incurred by such employee in connection therewith, including all reasonable travel, lodging, and meal expenses, but excluding any amount for such
employee’s time spent in connection herewith. 
 Section 12.8 Beneficiary Designation/Release Of Information/Right To
Reimbursement. To the extent permitted by applicable Law and except as otherwise provided for in this Agreement, all beneficiary designations, authorizations for the release of Information and rights to reimbursement made by or relating to QEP
Participants under Questar Benefit Plans shall be transferred to and be in full force and effect under the corresponding QEP Benefit Plans until such beneficiary designations, authorizations or rights are replaced or revoked by, or no longer apply,
to the relevant QEP Participant. 
 Section 12.9 Not A Change In Control. The Parties hereto acknowledge and agree that none of the
Distribution or any of the transactions contemplated by the Separation Agreement and this Agreement constitute, and shall not be deemed to be, a “change in control” for purposes of any Questar Benefit Plan or QEP Benefit Plan. 

ARTICLE XIII 

MISCELLANEOUS 

Section 13.1 Effect If Distribution Does Not Occur. Notwithstanding anything in this Agreement to the contrary, if the Separation Agreement
is terminated prior to the Effective Time, all actions and events that are, under this Agreement, to be taken or occur effective prior to, as of or following the Distribution Date, or otherwise in connection with the Separation, shall not be taken
or occur, except to the extent determined by Questar. 
 Section 13.2 Relationship Of Parties. Nothing in this Agreement shall be
deemed or construed by the Parties or any third party as creating the relationship of principal and agent, partnership or joint venture between the Parties, it being understood and agreed that no provision contained herein, and no act of the
Parties, shall be deemed to create any relationship between the Parties other than the relationship set forth herein. 
 Section 13.3
Affiliates. Each of Questar and QEP shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by each of their Affiliates, respectively.

 Section 13.4 Notices. All notices, requests, claims, demands and other communications under this Agreement, as between the
Parties, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt unless the day of receipt is not a Business Day, in which case it shall be deemed to have been duly given or made on the next
following Business Day) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt
requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 13.4): 

 

			
	To Questar:	 	 Questar Corporation
 180
East 100 South
 Salt Lake City, UT 84111

Attn: General Counsel
 Facsimile: 801) 324-5483

  
 QEP Resources, Inc.

1050 Seventeenth Street
 Denver, CO
80202
 Attn: General Counsel

Facsimile: (303) 573-0314

  

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 Section 13.5 Entire Agreement. This Agreement, the Separation Agreement, and each other
Ancillary Agreement, including any annexes, schedules and exhibits hereto and thereto, as well as any other agreements and documents referred to herein and therein, shall constitute the entire agreement between the Parties with respect to the
subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail.

 Section 13.6 Waivers. The failure of any Party to require strict performance by any other Party of any provision in this
Agreement shall not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof. 

Section 13.7 Amendments. Subject to the terms of Section 13.8 of this Agreement, this Agreement may not be modified or amended except by
an agreement in writing signed by each of the Parties. 
 Section 13.8 Termination, Etc. This Agreement (including Article XI
(Indemnification) hereof) may be terminated and abandoned at any time prior to the Distribution Date by and in the sole discretion of Questar without the approval of QEP or the stockholders of Questar and it shall be deemed terminated if and when
the Separation Agreement is terminated. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other Person. After the Distribution Date, this Agreement may not be terminated except by an agreement
in writing signed by each of the Parties. 
 Section 13.9 Governing Law. This Agreement shall be governed by and construed in
accordance with Laws of the State of Utah. 
 Section 13.10 Dispute Resolution. Any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance, nonperformance, validity, termination or breach of this Agreement or otherwise arising out of, or in any way related to this Agreement or the transactions contemplated hereby,
including any claim based on contract, tort, statute or constitution (but excluding any controversy, dispute or claim arising out of any Contract relating to the use or lease of real property if any third party is a necessary party to such
controversy, dispute or claim) (collectively, “Agreement Dispute”), shall be governed by, and be subject to, the provisions of Article IX of the Separation Agreement, which provisions (and

  

 28 

 
related defined terms) are hereby incorporated by reference into this Agreement and any references to “Agreement” in such Article IX as incorporated herein shall be deemed to be
references to this Agreement; provided, however, any references to “Agreement” or “Agreement Disputes” in such Article IX as incorporated herein shall be deemed to be references to this Agreement and Agreement
Disputes as defined in this Agreement. Notwithstanding the foregoing provisions of this Section 13.10, (i) no Dispute Notice relating to the characterization of an individual as a Questar Employee, QEP Employee, Former Questar Employee or
Former QEP Employee may be provided under this Section 13.10 more than one hundred eighty (180) days after the Distribution Date, and (iii) no Dispute Notice may be provided under this Section 13.10 after the second anniversary
of the Distribution Date. 
 Section 13.11 Consent to Jurisdiction. Subject to the provisions of Article IX of the Separation
Agreement, each of the Parties irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of the State of Wyoming, and (b) the United States District Court for the District of Wyoming (the “Wyoming
Courts”), for the purposes of any suit, action or other proceeding to compel arbitration or for provisional relief in aid of arbitration in accordance with Article IX of the Separation Agreement or for provisional relief to prevent
irreparable harm, and to the non-exclusive jurisdiction of the Wyoming Courts for the enforcement of any award issued thereunder. Each of the Parties further agrees that service of any process, summons, notice or document by United States registered
mail to such Party’s respective address set forth in Section 13.4 of this Agreement shall be effective service of process for any action, suit or proceeding in the Wyoming Courts with respect to any matters to which it has submitted to
jurisdiction in this Section 13.11. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the
Wyoming Courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. 

Section 13.12 Titles and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this Agreement. 
 Section 13.13 Counterparts. This Agreement
may be executed in more than one counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party.

 Section 13.14 Assignment. Except as otherwise provided for in this Agreement, this Agreement shall not be assignable, in whole or
in part, directly or indirectly, by either Party without the prior written Consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such Consent shall be void; provided, that,
a Party may assign this Agreement in connection with a merger transaction in which such Party is not the surviving entity or the sale by such Party of all or substantially all of its Assets; and provided, further, that the surviving
entity of such merger or the transferee of such Assets shall agree in writing, reasonably satisfactory to the other Party, to be bound by the terms of this Agreement as if named as a “Party” hereto. 

 

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 Section 13.15 Severability. In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 

Section 13.16 Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure
to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted transferees and assigns. 

Section 13.17 Exhibits and Schedules. The Exhibits and Schedules shall be construed with and as an integral part of this Agreement to the
same extent as if the same had been set forth verbatim herein. 
 Section 13.18 Specific Performance. The Parties agree that
irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to (i) an injunction or
injunctions to enforce specifically the terms and provisions hereof in any arbitration in accordance with Section 13.10 of this Agreement, (ii) provisional or temporary injunctive relief in accordance therewith in any Wyoming Court, and
(iii) enforcement of any such award of an arbitral tribunal or a Wyoming Court in any court of the United States, or any other any court or tribunal sitting in any state of the United States or in any foreign country that has jurisdiction, this
being in addition to any other remedy or relief to which they may be entitled. 
 Section 13.19 Waiver of Jury Trial. SUBJECT TO
SECTIONS 13.10, 13.11 AND 13.18 OF THIS AGREEMENT, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF AND PERMITTED UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.19. 
 Section 13.20 Force Majeure. No
Party (or any Person acting on its behalf) shall have any liability or responsibility for failure to fulfill any obligation (other than a payment obligation) under this Agreement so long as and to the extent to which the fulfillment of such
obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event:
(a) notify the other Party of the nature and extent of any such Force Majeure condition and (b) use due diligence to remove any such causes and resume performance under this Agreement as soon as reasonably practicable. 

 

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 Section 13.21 Authorization. Each of the Parties hereby represents and warrants that it has the
power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of
each such Party and that the execution, delivery and performance of this Agreement by such Party does not contravene or conflict with any provision of law or of its charter or bylaws or any material agreement, instrument or order binding on such
Party. 
 Section 13.22 No Third-Party Beneficiaries. Except as otherwise expressly provided in this Agreement, this Agreement is
solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. 

Section 13.23 No Interference or Amendment. Notwithstanding anything in this Agreement to the contrary, nothing in any other provision of
this Agreement shall be interpreted to interfere with the rights of each Party to amend or terminate any of its respective Benefit Plans or interpreted as an amendment or other modification of any Benefit Plan. 

Section 13.24 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be
construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. 

[Remainder of this page intentionally left blank.] 

 

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 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day
and year first above written. 
  

			
	QUESTAR CORPORATION
		
	By:	 	 /s/ Keith O. Rattie

	Name:	 	Keith O. Rattie
	Title:	 	Chairman, President and Chief Executive Officer
	
	QEP RESOURCES, INC.
		
	By:	 	 /s/ Charles B. Stanley

	Name:	 	Charles B. Stanley
	Title:	 	President and Chief Executive Officer

  

 32

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