EQUITABLE RESOURCES INC /PA/
EX-10.03
<DOCUMENT>
<TYPE>EX-10.03
<SEQUENCE>2
<FILENAME>a05-7371_1ex10d03.htm
<DESCRIPTION>EX-10.03
<TEXT>
<html>

<head>





</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 10.03</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2005 Directors&#146; Compensation and Retirement
Program</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In April 2005, an external compensation
consultant reviewed the total compensation for directors.&#160; Specifically, retainer fees, meeting fees,
insurance and stock-based long-term incentives were reviewed using, as the
competitive benchmark, levels of total compensation paid to directors of 30
energy companies 29 of which constitute the peer group used for the company&#146;s
executive performance incentive program, 20 general industry companies of
comparable revenue and capitalization size and 13 companies located in the
company&#146;s geographic area or of other relevance.&#160; Set forth below is the compensation for
non-employee directors.&#160; No compensation
is paid to employee directors for their service as directors.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="line-height:normal;margin:0in 0in .0001pt;page-break-after:auto;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash Compensation</font></b></h2>

<h2 style="line-height:normal;margin:0in 0in .0001pt;page-break-after:auto;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>An annual cash retainer of $24,000 is paid to
non-employee directors on a quarterly basis.&#160;
This level of retainer was found to be competitive and no changes were
made in 2005 to this compensation component.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.7pt;text-indent:-9.35pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The cash meeting fee is $1,500 for each Board and
Committee meeting attended.&#160; If a
non-employee director participates in a meeting by telephone, the meeting fee
is $750.&#160; An additional $1,000 is paid to
the Audit Committee Chair and $500 is paid to each other Committee Chair, for
each Committee meeting attended.&#160; This
level of meeting fee was found to be competitive and no changes were made in
2005 to this compensation component.</p>

<p style="margin:0in 0in .0001pt 36.7pt;text-indent:-9.35pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="line-height:normal;margin:0in 0in .0001pt;page-break-after:auto;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Equity-Based Compensation</font></b></h2>

<h2 style="line-height:normal;margin:0in 0in .0001pt;page-break-after:auto;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A grant of 1,000 vested deferred phantom stock
units was awarded to each director.&#160; This
grant had approximately the same economic value as the 2004 grant of 1,320
vested deferred phantom stock units because of the increase in the market price
of the company&#146;s common stock.&#160; Dividends
will be credited quarterly in the form of additional stock units.&#160; The value of the stock units will be paid in
cash on the earlier of the director&#146;s death or retirement from the Board in
accordance with the election made under the Directors&#146; Deferred Compensation
Plan.&#160; The number of phantom stock units,
options, or other stock-based awards, granted in future years will be based on
competitive practices as determined by a nationally recognized external
consultant.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The non-employee directors are subject to stock
ownership guidelines, which require them to hold shares, including share
equivalent units, in an amount equal to two times the annual cash
retainer.&#160; Under the guidelines,
directors have up to two years to acquire a sufficient number of shares to meet
this requirement.&#160; All directors
currently satisfy this ownership guideline.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<h2 style="line-height:normal;margin:0in 0in .0001pt;page-break-after:auto;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred Compensation</font></b></h2>

<h2 style="line-height:normal;margin:0in 0in .0001pt;page-break-after:auto;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In connection with the enactment of the American
Jobs Creation Act of 2004, the company suspended, effective December 31, 2004,
the Directors&#146; Deferred Compensation Plan and adopted, effective January 1,
2005, the 2005 Directors&#146; Deferred Compensation Plan.&#160; The Directors&#146; Deferred Compensation Plan
continues to operate for the sole purpose of administering vested amounts under
the plan on or prior to December 31, 2004.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Non-employee directors&#146; retainer and fees may be
deferred under the 2005 Directors&#146; Deferred Compensation Plan until Board
service ends or a later time, as the director may elect.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In May 1999, the directors&#146; retirement plan was
curtailed and the accrued benefit of each active director was converted to a
stock account administered under the Directors&#146; Deferred Compensation
Plan.&#160; Imputed dividends are credited to
the account as additional shares.&#160; All
participants are vested upon death or termination of service as a
director.&#160; Dr. Domm and Messrs. McConomy,
Rohr and Shapira are the only active directors eligible for benefits under the
retirement plan.&#160; Directors elected after
May 1999 are not eligible to participate in the retirement plan.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

</div>
<!-- SEQ.=1,FOLIO='',FILE='C:\JMS\sveeram\05-7371-1\task410414\7371-1-kg.htm',USER='skveeramuthu',CD='Apr 27 19:26 2005' -->


<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Insurance</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The company also provides non-employee directors
with $20,000 of life insurance, $20,000 of accidental death and dismemberment
insurance and $250,000 of travel accident insurance while traveling on business
for Equitable Resources.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-9.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Non-employee directors who joined the Board prior
to May 25, 1999 may designate a civic, charitable or educational organization
as beneficiary of a $500,000 gift funded by a life insurance policy purchased
by Equitable Resources.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

</div>
<!-- SEQ.=1,FOLIO='',FILE='C:\JMS\sveeram\05-7371-1\task410414\7371-1-kg.htm',USER='skveeramuthu',CD='Apr 27 19:26 2005' -->


</body>

</html>
</TEXT>
</DOCUMENT>
