8-KMaterial Agreements

EQT Corp 8-K Report, Material Agreement (Dec 16, 2005)

Filed December 16, 2005For Securities:EQT

Summary

EQT Corporation (EQT) filed an 8-K on December 16, 2005, primarily detailing significant changes to its executive and director compensation plans in response to the American Jobs Creation Act of 2004 and new IRS regulations (Section 409A). The company amended its 2005 Directors' Deferred Compensation Plan to allow for continued deferrals of director fees beyond 2005. More significantly, EQT terminated several employee and executive deferred compensation plans, including the Employee Deferred Compensation Plan, the 2005 Employee Plan, the 2002 Executive Performance Incentive Program, and the Breakthrough Long-Term Incentive Plan. These terminations necessitate the distribution of all deferred and accrued amounts under these terminated plans. Approximately $55.1 million in participant balances were held under these plans as of November 30, 2005, with a substantial portion, $44.9 million, attributable to current executive officers.

Key Highlights

  • 1EQT Corporation is amending its 2005 Directors’ Deferred Compensation Plan to permit deferrals of director compensation in years subsequent to 2005.
  • 2The company is terminating its Employee Deferred Compensation Plan and its 2005 Employee Deferred Compensation Plan.
  • 3All outstanding balances in the terminated employee deferred compensation plans will be distributed to participants.
  • 4As of November 30, 2005, total participant balances in the deferred compensation plans amounted to approximately $55.1 million.
  • 5Approximately $44.9 million of the total participant balances were held by EQT's current executive officers.
  • 6The 2002 Executive Performance Incentive Program and the Breakthrough Long-Term Incentive Plan have also been terminated, with associated amounts to be distributed.
  • 7The 2003 Executive Performance Incentive Program is also being terminated at the close of its performance period, with all earned amounts to be distributed in cash and recognized as income in 2005.

Frequently Asked Questions

EQT is terminating these plans due to requirements stemming from the American Jobs Creation Act of 2004 and proposed regulations under Internal Revenue Code Section 409A, which govern deferred compensation arrangements.

As of November 30, 2005, the total participant balances under the Deferred Compensation Plans were approximately $55.1 million. A significant portion of this, approximately $44.9 million, was held by current executive officers.

No, the 2005 Directors' Deferred Compensation Plan is being amended, not terminated. The amendment allows for the deferral of director fees in years following 2005, whereas the original plan only permitted deferrals through December 31, 2005.

The filing indicates that amounts deferred under the employee plans are to be distributed. For the 2003 Executive Performance Incentive Program, amounts earned will be distributed in cash and included in participants' income in 2005, with the exact amount to be disclosed later. The specific timing for distributions from the other terminated plans is not explicitly stated beyond the general need for distribution.