UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Payment of Filing Fee (Check the appropriate box):

225 North Shore Drive

Pittsburgh, PA 15212-5861

Notice of Annual Meeting of Shareholders

To Be Held April 23, 2008

The annual meeting of shareholders of Equitable Resources, Inc. will be held on Wednesday, April 23, 2008, at 10:30 a.m.  We will be in the SpringHill Suites North Shore located at 223 Federal Street in Pittsburgh, Pennsylvania.  If you owned common stock of Equitable Resources, Inc. at the close of business on February 11, 2008, you may vote at this meeting.

At the meeting, we plan to:

1)          Elect four directors to serve for new terms;

2)          Ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for 2008; and

3)          Transact such other business as may properly be presented at the meeting or any adjournment or postponement of the meeting.

Your Board of Directors recommends that you vote for all director nominees and for ratification of the independent registered public accounting firm.

Please consider the issues presented in this proxy statement, and vote your shares as promptly as possible by following the voting instructions included in this proxy statement.

On behalf of the Board of Directors

TABLE OF CONTENTS

i

ii

iii

EQUITABLE RESOURCES, INC.

225 North Shore Drive

Pittsburgh, PA 15212-5861

PROXY STATEMENT

This proxy statement is first being mailed to shareholders on or about March 12, 2008.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Equitable Resources, Inc. is soliciting proxies for its 2008 annual meeting of shareholders. This booklet and proxy card contain information about the items you will vote on at the annual meeting and about the voting process. We sometimes refer to Equitable Resources, Inc. in this proxy statement as “Equitable,” “Equitable Resources,” the “company” or “we.”

How do I contact Equitable’s corporate secretary?

You may contact the company’s corporate secretary by sending correspondence to: 225 North Shore Drive, Pittsburgh, Pennsylvania 15212.

Who is entitled to vote, and how many votes do I have?

You can vote if you held common stock of Equitable Resources at the close of business on February 11, 2008. For each item presented for vote, you have one vote for each share you own. In addition, in the election of directors, you may cumulate votes by multiplying your shares by the number of directors to be elected and casting all of your votes for a single candidate or by distributing them among any two or more candidates.

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

If your shares are registered directly in your name with Equitable Resources’ transfer agent, BNY Mellon Shareowner Services, you are considered the “shareholder of record” of those shares. The notice of annual meeting, proxy statement, annual report, proxy card and accompanying documents have been sent directly to you by BNY Mellon Shareowner Services.

If your shares are held in a stock brokerage account or by a bank or other holder of record (including shares held through employee benefit and/or compensation plans), you are considered the “beneficial owner” of shares held in “street name.” The notice of annual meeting, proxy statement, annual report, voting instruction card, and accompanying documents have been forwarded to you by your broker, bank or other holder of record who is considered the “shareholder of record” of those shares. As the beneficial owner, you have the right to direct your broker, bank or other holder of record in voting your shares by using the voting instruction card included in the mailing or by following their instructions for voting by telephone or on the Internet.

How do I vote if I am the shareholder of record?

If you are the shareholder of record, you may vote your shares:

·                                          in person by attending the meeting;

1

·                                          by completing the proxy card as outlined in the instructions on the card and mailing the card in the prepaid envelope provided;

·                                          by following the instructions at the Internet site http://www.proxyvoting.com/eqt; or

·                                          by following the instructions for telephone voting after calling 1-866-540-5760.

If the name on the accounts is the same, the shares on your proxy card may represent (i) shares for which you have a certificate; (ii) shares that you hold in book-entry form; and (iii) shares that you have in a dividend reinvestment account of the company’s Dividend Reinvestment and Stock Purchase Plan. If you vote by proxy, your shares will be voted as indicated in your properly completed unrevoked proxy. If you do not indicate how your shares should be voted on an item, the shares represented by your properly completed unrevoked proxy card will be voted as recommended by the Board of Directors. If you do not return a proxy card or do not vote by telephone or on the Internet, your shares will not be voted.

In the case of Internet or telephone voting, you should have your proxy card in hand and retain the card until you have completed the voting process. If you vote by Internet or telephone, you do not need to mail back the proxy card. Even if you plan to attend the meeting, we encourage you to vote by proxy as soon as possible.

How do I vote if I am a beneficial holder of shares held in “street name”?

If your broker holds your shares in “street name,” you may vote those shares by following the instructions that you received from your broker. Please review your instruction card for the date by which your voting instructions must be received in order for your shares to be voted. Except in the case of shares held through the Employee Savings Plan, Employee Savings and Protection Plan and 1999 Long-Term Incentive Plan, you may also vote in person at the meeting if you obtain a legal proxy from your broker, bank or other holder of record and present it to the inspectors of election with your ballot. See the caption “Is my vote important?” below for the right of banks and brokers to vote on routine matters for which they have not received voting instructions.

How do I vote shares held through the Employee Savings Plan or Employee Savings and Protection Plan?

Individuals holding shares through the Employee Savings Plan and the Employee Savings and Protection Plan will receive separate voting direction cards for those plans. The trustees of the Employee Savings Plan and the Employee Savings and Protection Plan will vote your shares in accordance with the instructions on your returned direction card. You may instruct the trustees to vote your shares:

·                                          by completing the direction card as outlined in the instructions on the card and mailing the card in the prepaid envelope provided;

·                                          by following the instructions at the Internet site http://www.proxyvoting.com/eqt; or

·                                          by following the instructions for telephone voting after calling 1-866-540-5760.

If you do not return a direction card or if you return a direction card with no instructions, the trustees will vote your shares in proportion to the way other plan participants voted their shares. Please note that the direction cards have an earlier return date and different mailing instructions than proxy cards. Please review your direction card for the date by which your instructions must be received in order for your shares to be voted.

2

In the case of Internet or telephone voting, you should have your direction card in hand and retain the card until you have completed the voting process. If you vote by Internet or telephone, you do not need to mail back the direction card.

How do I vote restricted shares held through the 1999 Long-Term Incentive Plan?

Employees holding restricted shares through the 1999 Long-Term Incentive Plan will receive separate voting direction cards for that plan. The administrator of the 1999 Long-Term Incentive Plan will vote your restricted shares in accordance with the instructions on your returned direction card. You may instruct the administrator to vote your shares by completing the direction card as outlined in the instructions on the card and mailing the card in the envelope provided.

If you return a direction card with no instructions, the administrator of the 1999 Long-Term Incentive Plan will vote your shares as recommended by the Board of Directors. If you do not return a direction card, your shares will not be voted.

Please note that the direction cards have an earlier return date and different mailing instructions than the proxy cards. Please review your direction card for the date by which your instructions must be returned in order for you shares to be voted.

How do I vote shares acquired through the Employee Stock Purchase Plan?

Employees holding shares acquired through the Employee Stock Purchase Plan will receive a separate voting instruction card covering all shares held in their individual account from Fidelity Stock Plan Services, LLC, the plan recordkeeper. The recordkeeper for the Employee Stock Purchase Plan will vote your shares (a) in accordance with the instructions on your returned voting instruction card or (b) in its discretion on routine proposals such as the election of directors and the ratification of Ernst & Young LLP as independent registered public accounting firm, if you do not return a direction card or if you return a direction card with no instructions. Please review your instruction card for the date by which your instructions must be received in order for your shares to be voted.

Can I change my vote?

If you are a shareholder of record, you can revoke your proxy before the time of voting at the meeting by:

·                                          voting again by submitting a revised proxy card or by Internet or telephone, as applicable, on a date later than the prior proxy;

·                                          voting in person at the meeting; or

·                                          notifying the corporate secretary of Equitable Resources in writing that you are revoking your proxy.

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record. Except in the case of shares held through the Employee Savings Plan, Employee Savings and Protection Plan, and 1999 Long-Term Incentive Plan, you may also vote in person at the meeting if you obtain a legal proxy from your broker, bank or other holder of record.

What if I receive more than one proxy and/or voting instruction card?

If you receive more than one proxy card as a shareholder of record, you have shares registered differently in more than one account. We encourage you to have all accounts registered in the same name and address whenever possible. You can do this by contacting our transfer agent, BNY Mellon Shareowner

3

Services, at P.O. Box 358015, Pittsburgh, PA 15252, at its toll free number (800-589-9026) or on its website at www.melloninvestor.com. If you receive more than one voting instruction card, please contact the bank or broker holding your shares to determine whether you can consolidate your accounts.

What is householding?

We have adopted a procedure approved by the Securities and Exchange Commission called “householding,” which reduces our printing costs and postage fees. Under this procedure, shareholders of record who have the same address and last name will receive only one copy of our 2007 Annual Report on Form 10-K and proxy statement unless one or more of these shareholders notify us that they wish to continue receiving individual copies. Shareholders who participate in householding will continue to receive separate proxy cards.

If a shareholder of record residing at a household to which we sent only one copy of our 2007 Annual Report on Form 10-K and proxy statement wishes to receive separate documents in the future, he or she may discontinue householding by contacting our transfer agent, BNY Mellon Shareowner Services, at P.O. Box 358015, Pittsburgh, PA 15252, at its toll free number (800-589-9026) or on its website at www.melloninvestor.com. If you are an eligible shareholder of record receiving multiple copies of our 2007 Annual Report on Form 10-K and proxy statement, you can request householding by contacting us in the same manner. If you own your shares through a bank, broker or other nominee, you can request householding by contacting the nominee.

If a shareholder of record residing at a household to which we sent only one copy of our 2007 Annual Report on Form 10-K and proxy statement wishes to receive an additional copy for this meeting, he or she may contact the corporate secretary of Equitable Resources at 225 North Shore Drive, Pittsburgh, Pennsylvania 15212 or by phone at 412-553-5891. The company will promptly deliver, upon request, a separate 2007 Annual Report on Form 10-K and proxy statement to a shareholder at a shared address to which a single copy of the documents was delivered.

Is my vote important?

Your vote is very important. Each share of Equitable stock that you own represents one vote. If you do not vote your shares, you will not have a say in the important issues to be voted on at the annual meeting. The four nominees receiving the most votes “for” the term of three years to expire in 2011 will be elected as directors for such term. If a nominee receives a greater number of votes “withheld” from his or her election than votes “for” such election, the Board will consider whether to accept the nominee’s previously submitted conditional resignation. In order to pass, each other proposal included in this year’s proxy statement will require the affirmative vote of the holders of a majority of votes cast at the annual meeting. Many of our shareholders do not vote, so the shareholders who do vote influence the outcome of the election in greater proportion than their percentage ownership of the company. In addition, banks and brokers that have not received voting instructions from their clients cannot vote on their clients’ behalf on “non-routine” proposals, although they may vote their clients’ shares on the election of directors and the ratification of Ernst & Young LLP as independent registered public accounting firm, which are considered “routine” proposals.

How will my shares be voted on other matters that may be presented to the meeting?

Since no shareholder has indicated an intention to present any matter to the 2008 annual meeting in accordance with the advance notice provision in the company’s by-laws, the Board is not aware of any other proposals for the meeting. If another proposal is presented, the persons named as proxies will vote your returned proxy in their discretion.

4

Who can attend the annual meeting, and how do I obtain an admission ticket?

You may attend the meeting if you were a shareholder on February 11, 2008. Seating is limited and will be offered on a “first come, first served” basis. If you plan to attend the meeting, you will need an admission ticket, which you can obtain by checking the appropriate box on your proxy card or by writing to the corporate secretary of Equitable Resources. See the caption “How do I contact Equitable’s corporate secretary?” above. If a broker holds your shares, you must include proof of your ownership of Equitable stock, such as a copy of your brokerage account statement or an omnibus proxy, which you can get from your broker, and we will send you an admission ticket. Shareholders must present a form of photo identification, such as a driver’s license, in order to be admitted to the annual meeting. No cameras, recording equipment, large bags or packages will be permitted in the annual meeting.

What constitutes a “quorum” for the meeting?

A majority of the outstanding shares, present or represented by proxy, constitutes a quorum. A quorum is necessary to conduct business at the annual meeting. You are part of the quorum if you have returned a proxy. Abstentions, broker non-votes (defined below under “How are the votes counted?”) and votes withheld from director nominees also are counted in determining whether a quorum is present.

What happens if the meeting is postponed or adjourned?

If the meeting is postponed or adjourned, your proxy will still be good and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted.

What is the total number of outstanding shares?

At the close of business on February 11, 2008, the record date for the meeting, Equitable Resources had 122,175,152 shares of common stock outstanding.

How are the votes counted?

Director candidates who receive the highest number of votes cast in each class up for election will be elected. However, if a nominee receives more votes “withheld” from his or her election than votes “for” such election, the Board will consider whether to accept the nominee’s previously submitted conditional resignation.

Approval of each other item requires the affirmative vote of the holders of a majority of the votes cast at the meeting. For the purpose of the ratification of the appointment of Ernst & Young LLP, abstentions, broker non-votes and the failure to vote are not votes cast, and, accordingly, have no effect on the outcome of such proposal.

A broker non-vote occurs when a broker or other nominee who holds shares for another person returns a proxy but does not vote on a particular item, usually because the nominee does not have discretionary voting authority for that item and has not received instructions from the owner of the shares. See the caption “Is my vote important?” above for the right of banks and brokers to vote on routine matters for which they have not received voting instructions.

5

Who pays for the solicitation of proxies?

We do. We are soliciting proxies primarily by use of the mails. However, we may also solicit proxies in person, by telephone, by facsimile, by courier or by electronic means. To the extent that our directors and officers participate in this solicitation, they will not receive any compensation for their participation, other than their normal compensation. BNY Mellon Shareowner Services assists Equitable Resources with the solicitation for a fee of $7,500 plus reasonable out-of-pocket expenses. Equitable Resources also reimburses brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for sending proxy materials to shareholders and obtaining their proxies.

May I nominate someone to be a director of Equitable Resources?

Shareholders may either nominate individuals to serve as directors at the annual meeting of the shareholders or recommend individuals as possible director nominees to the Corporate Governance Committee to consider in its normal course.

If you are a shareholder entitled to vote at an annual meeting, you may present at the meeting the nomination of one or more persons for election as a director of Equitable Resources. To do this, you must send advance written notice to the corporate secretary. See the caption “How do I contact Equitable’s corporate secretary?” above. According to the company’s by-laws, we must receive notice of nominations for the 2009 annual meeting not less than 90 but not more than 120 days before April 23, 2009, the anniversary date of this year’s annual meeting.

The Board’s Corporate Governance Committee will consider candidates recommended by the company’s shareholders. Shareholders should send their recommendations to the Corporate Governance Committee Chair by addressing the recommendation to Equitable’s corporate secretary, and the corporate secretary must receive any recommendations as far in advance of the annual meeting of shareholders as possible but in any event not later than November 11, 2008.

Any notice or recommendation provided by the nominating shareholder must include an original irrevocable conditional resignation signed by each proposed nominee, as well as certain information about the person or persons nominated and about the nominating shareholder (see the caption “Director Nominations” under “Corporate Governance and Board Matters” for details). For additional information, contact the corporate secretary.

When are shareholder proposals due?

Under the rules of the Securities and Exchange Commission, eligible shareholders may submit proposals for inclusion in the proxy statement for our 2009 annual meeting. Shareholder proposals must be submitted in writing and must be received by the corporate secretary at the address provided previously in this proxy statement by November 11, 2008 for them to be considered for inclusion in the 2009 proxy statement.

Under the company’s by-laws, you may present proposals in person at the 2009 annual meeting if you are a shareholder entitled to vote. The corporate secretary must receive any proposals to be presented, which will not be included in next year’s proxy statement, not less than 90 but not more than 120 days before April 23, 2009, the anniversary date of this year’s annual meeting. Proposals received outside that time period, including any proposal nominating a person as a director, may not be presented at the annual meeting.

6

ITEM NO. 1 – ELECTION OF DIRECTORS

(Item No. 1 on the proxy card)

The Board of Directors of Equitable Resources currently has eleven members, who are divided into three classes. The classes are as equal in number as is possible depending on the total number of directors at any time. Generally, directors are elected for three-year terms. Each director’s term expires upon the earlier of the end of such term or the annual meeting following such director’s seventy-fourth birthday. The classes are arranged so that the terms of the directors in each class expire at successive annual meetings. This means that the shareholders elect approximately one-third of the members of the Board of Directors annually. The three year terms of four directors expire at this annual meeting. All four of those directors, Phyllis A. Domm, Ed.D., David L. Porges, James E. Rohr and David S. Shapira will stand for election at the annual meeting. A fifth director, Thomas A. McConomy, is retiring effective at the annual meeting pursuant to the company’s mandatory retirement by-law. The company is grateful to Mr. McConomy, whose service on the board spans almost 17 years, for his dedicated service and his many contributions to the company’s success. The Corporate Governance Committee is conducting a search for Mr. McConomy’s replacement and has retained a third-party search firm to assist the search.

The persons named as proxies will vote for the nominees named, unless you withhold authority to vote for any one or more of them. The votes represented by any proxy may be cumulated and voted at the discretion of the persons named as proxies in favor of any one or more of the nominees, unless otherwise indicated on your proxy card. The effect of this discretionary authority may be to offset the effect of your having withheld authority to vote for individual nominees because the persons named as proxies will be able to allocate votes of shareholders who have not withheld authority to vote for those nominees. The four nominees for election have agreed to serve if elected, and management has no reason to believe that such nominees will be unavailable to serve. In the event that any of the nominees is unable or declines to serve as a director at the time of the annual meeting, then the persons named as proxies intend to vote for substitute nominees proposed by the Board, unless the Board decides to reduce the number of directors. The four individuals who receive the largest number of votes cast for the term of three years to expire in 2011 will be elected directors for such term.

In addition, under the company’s majority voting by-law, each nominee has submitted an irrevocable conditional resignation to be effective if the nominee receives a greater number of votes “withheld” than votes “for” his or her election in an uncontested election. If this occurs, the Board of Directors will decide whether to accept the tendered resignation not later than 90 days after the certification of the election. Any determination by the Board shall be made without the participation of any nominee whose resignation is under consideration with respect to the election. The Board’s explanation of its decision will be promptly disclosed on a Form 8-K filed with the Securities and Exchange Commission.

The Board of Directors recommends a vote FOR all nominees for the Board of Directors.

7

NOMINEES TO SERVE FOR A THREE-YEAR TERM EXPIRING IN 2011

8

DIRECTORS WHOSE TERMS EXPIRE IN 2010

9

DIRECTORS WHOSE TERMS EXPIRE IN 2009

10

CORPORATE GOVERNANCE AND BOARD MATTERS

Meetings of the Board of Directors and Committee Membership

The Board of Directors held six regular meetings and three special meetings during 2007.  The independent directors met six times in executive session without any officer of the company present.  During 2007, attendance at all Board meetings averaged 96%.  The company encourages its directors to attend the annual meeting of the shareholders, and it has been their practice to do so.  All directors attended the company’s 2007 annual meeting of shareholders.

The four standing committees of the Board are the Audit, Compensation, Corporate Governance and Executive Committees.  The Corporate Governance Committee serves as the nominating committee for the company.  In 2007, each of the directors attended at least 89% of all meetings of the Board and meetings of the committees on which the directors served, except that Ms. Jeremiah attended 64% of the meetings of the committees on which she served.  The Board may from time to time form new committees, disband an existing committee, and delegate additional responsibilities to a committee.

The table below sets forth membership and meeting information for each Board committee:

x = Committee Member; * = Chair; **Mr. Porges is not a member of any Board committee.

The responsibilities of the committees are set forth in written charters, which are reviewed periodically by the committees and, where appropriate, the Corporate Governance Committee and the Board.  All of the charters are available on the company’s website at www.eqt.com.  The members and main responsibilities of each committee are as follows:

Audit Committee

11

Compensation Committee

Corporate Governance Committee

Executive Committee

12

Director Nominations

The responsibilities of the Corporate Governance Committee include identifying and recommending to the Board the requisite skills and characteristics to be found in individuals qualified to serve as members of the Board and recommending to the Board the director nominees for each annual meeting of shareholders.  The Committee typically considers new nominees for the Board in the context of a vacancy on the Board resulting from resignation or retirement of a director or to fill a skill need identified by the Board.  Director candidates have been identified most often by senior management and members of the Board considering individuals both within and external to their respective networks.  The Committee has in the past retained, and may in the future retain, a consultant to assist in the process.

As set forth in the Committee’s charter, the Committee will consider submissions from shareholders in making its recommendation.  Any shareholder desiring to recommend an individual to serve as a director of the company should submit to the Corporate Governance Committee Chair, c/o corporate secretary, as far in advance of the annual meeting of shareholders as possible but in any event not later than November 11, 2008, the following information:

See the caption “How do I contact Equitable’s corporate secretary?” under “Questions and answers about the annual meeting.”

In evaluating individuals identified as possible director nominees, whether the source of the possible nominee is another director, a member of management, a shareholder or otherwise, the Committee assesses the experience and personal characteristics of the possible nominee against the guidelines identified below.  Possible nominees satisfying the guidelines are then further evaluated to identify, in the judgment of the Committee, the best match for the Board.  The Committee retains the right to modify the guidelines including the criteria for evaluating the qualifications of potential nominees for election to the Board as set forth therein, from time to time.  For the 2008 annual meeting, the company did not receive any shareholder recommendations for possible director nominees.

In identifying director candidates, the Committee utilizes the following guidelines:

Individual qualifications

13

Composition of the Board as a whole

Contacting the Board

You may contact the Board of Directors, or any individual director, by writing to the Corporate Governance Committee Chair c/o corporate secretary or by sending an email to corpgovchair@eqt.com.  See the caption “How do I contact Equitable’s corporate secretary?” under “Questions and answers about the annual meeting.”

Governance Principles

Equitable maintains a corporate governance page on its website which includes key information about its corporate governance practices, including its Corporate Governance Guidelines, Code of Business Conduct and Ethics and charters for the Audit Committee, the Compensation Committee and the Corporate Governance Committee of the Board of Directors.  The corporate governance page can be found at www.eqt.com, by clicking on the “Corporate Governance” link on the main page or “Investors” and then “Corporate Governance.”  Equitable will provide a copy of its Corporate Governance Guidelines, Code of Business Conduct and Ethics and any of the Board Committee charters upon request by a shareholder to the corporate secretary.   See the caption “How do I contact Equitable’s corporate secretary?” under “Questions and answers about the annual meeting.”

Equitable’s corporate governance policies and practices are compliant with the corporate governance requirements of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission, including:

14

Under the company’s majority voting by-law, each nominee has submitted an irrevocable conditional resignation to be effective if the nominee receives a greater number of votes “withheld” than votes “for” his or her election in an uncontested election.  If this occurs, the Board of Directors will decide whether to accept the tendered resignation not later than 90 days after the certification of the election.  Any determination by the Board shall be made without the participation of any nominee whose resignation is under consideration with respect to the election.  The Board’s explanation of its decision will be promptly disclosed on a Form 8-K filed with the Securities and Exchange Commission.

Director Independence

In accord with the company’s Corporate Governance Guidelines, the majority of directors at any time will be independent.  For a director to be considered an “independent director”, the Board must annually determine that he or she has no material relationship with the company (either directly or as a partner, shareholder or officer of an organization which has such a relationship with the company).  To assist it in determining director independence, the Board established guidelines which conform to the independence requirements of the New York Stock Exchange.

The Board will consider all relevant facts and circumstances in making an independence determination.  Under the company’s Corporate Governance Guidelines, a director will not be independent if:

15

In assessing the independence of a director, the Board considers the materiality of charitable contributions made by the company to any tax-exempt organization for which the director serves as an executive officer.  During the past three fiscal years, the company has not made, in any single fiscal year, contributions to any tax-exempt organization for which any director serves as an executive officer that exceeded the greater of $1 million, or 2% of such tax-exempt organization’s consolidated gross revenues.

Based on the independence standards set forth in the company’s Corporate Governance Guidelines, the Board of Directors has determined that the following directors have met the above standards and are independent of Equitable and its management:  Drs. Domm and Todd, Mses. Bailey and Jeremiah and Messrs. McConomy, Miles, Rohr, Shapira and Whalen.  Messrs. Gerber and Porges, each of whom is an executive officer of the company, are the only directors who are not independent.

Each member of the Audit Committee is independent under the rules of the Securities and Exchange Commission, and each member of the Compensation and the Corporate Governance Committees is independent under the requirements of the Internal Revenue Code (the “Code”) and the rules of the Securities and Exchange Commission.

In addition to the independence standards set forth in the company’s Corporate Governance Guidelines, the company has established written policies and unwritten practices for reviewing and approving related person transactions, as described under the caption “Certain Relationships and Related Transactions” set forth below.  As part of its practices for reviewing related person transactions, the Board identified categories of transactions in which the direct or indirect interest of a related person is not material because of the nature of the transactions.  Such categories of transactions are described under the caption “Certain Relationships and Related Transactions.”

The ownership of stock in the company by directors is encouraged and is not in itself a basis for a director to be considered as not independent, provided that it may preclude participation on the Audit Committee of the company if the magnitude of such ownership is sufficient to make the director an “affiliated person” of the company as described in the Audit Committee Charter.  See the caption “Equity-Based Compensation” under “Directors’ Compensation” for a description of the stock ownership guidelines the directors established for themselves.

Certain Relationships and Related Transactions

In the ordinary course of business, Equitable Resources may engage in transactions with companies and organizations in which an Equitable Resources director, nominee for director, executive officer, 5% shareholder or immediate family member of any of the forgoing, has an interest.   The company’s Code of Business Conduct and Ethics and related policies require directors and executive officers to avoid engaging in any activity or relationship that may interfere, or have the appearance of interfering, with the performance of the director’s or officer’s duties to the company.   Such policies require all directors and

16

executive officers to report and fully disclose the nature of any proposed conduct or transaction that involves, or could involve, a conflict of interest and to obtain approval before any action is undertaken.

The Corporate Governance Committee annually reviews related party transactions involving the company and directors in order to determine whether a director had a direct or indirect material interest in the transaction.   In making its assessment, the Committee considers information derived from, among other things, questionnaires that are completed by the company’s directors each year and company accounting records.  All identified transactions are reviewed by the Corporate Governance Committee.

The Board identified the categories of transactions below as to which the direct or indirect interest of a director is not material because of the nature of the transactions:

Utilizing these categories, the Board determined that Mr. Rohr, Mr. Shapira and Ms. Jeremiah did not have a direct or indirect material interest in the transactions that were considered by the Board.

Finally, in matters brought before the Board regarding a contract or transaction involving an entity in which one or more of the company’s directors or officers have a financial or other interest, the company follows Section 1728 of the Pennsylvania Business Corporation Law (regarding interested directors or others) and the affected director typically abstains from the decision-making process.

Compensation Committee Interlocks and Insider Participation

During all or part of 2007, Drs. Domm and Todd and Messrs. McConomy and Rohr served as members of the Compensation Committee.  None of the members of the Compensation Committee is a current or former officer or employee of the company or had any relationship with the company requiring disclosure.  In addition, none of the company’s directors is an executive officer of another entity, at which one of the company’s executive officers serves as a director.

17

DIRECTORS’ COMPENSATION

The Corporate Governance Committee of the Board of Directors discharges the Board’s responsibilities relating to compensation of directors.  Compensation of directors is reviewed by the Corporate Governance Committee annually at its April meeting and is approved by the Board.  No compensation is paid to employee directors for their service as directors.

The Corporate Governance Committee has engaged Towers, Perrin, Forster & Crosby, Inc. (“Towers Perrin”), an external human resources consulting firm, to conduct an annual review of the total compensation for outside directors.  Specifically, retainer fees, meeting fees, stock-based long-term incentives and insurance were evaluated using, as the competitive benchmark, levels of total compensation paid to directors of 30 energy companies (consisting of Vectren Corp. and the 29 companies constituting the Long Term Peer Group (as defined under the caption “Peer Groups Define Competitive Levels of Performance” under “Executive Compensation”)), and 20 general industry companies of comparable revenue and equity capitalization size (consisting of Toll Brothers Inc.,  Sovereign Bancorp Inc., Teleflex Inc., Harsco Inc., Airgas Inc., Analog Devices Inc., Pep Boys-Manny Moe & Jack (The), Bausch & Lomb Inc., FMC Corp., Cabot Corp., Hercules Inc., Ann Taylor Stores Corp., Iron Mountain Inc.,  Dow Jones and Co. Inc., Ametek Inc., Carpenter Technology Corp., Erie Indemnity Company, Covance Inc., Tektronix Inc., and Reynolds and Reynolds Co.).  Set forth below is a description of the 2007 compensation of the company’s non-employee directors.

Cash Compensation

Equity-Based Compensation

Deferred Compensation

18

Other

The table below shows the total 2007 compensation of the company’s non-employee directors:

19

STOCK OWNERSHIP AND PERFORMANCE

Significant Shareholder

The following shareholder reported to the Securities and Exchange Commission that he owned more than 5% of the company’s common stock:

20

Stock Ownership of Directors and Executive Officers

The following table sets forth the number of shares of Equitable Resources common stock beneficially owned by directors and named executive officers and all directors and executive officers as a group as of January 31, 2008, including shares they had the right to acquire within 60 days after January 31, 2008.  The directors and named executive officers have sole investment and voting power unless otherwise noted.

21

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that our directors, executive officers and all persons who beneficially own more than 10% of Equitable Resources’ common stock file initial reports of ownership and reports of changes in ownership of our common stock with the Securities and Exchange Commission.  As a practical matter, the company assists its directors and executive officers by monitoring transactions and completing and filing Section 16 reports on their behalf.

Based solely upon the company’s review of copies of filings or written representations from the reporting persons, the company believes that all reports for the company’s executive officers and directors that were required to be filed under Section 16(a) of the Securities Exchange Act of 1934 were filed on a timely basis.

22

EXECUTIVE COMPENSATION

The following Compensation Discussion and Analysis contains statements regarding future company performance targets and goals.  These targets and goals are disclosed in the limited context of Equitable’s compensation programs and should not be understood to be statements of management’s expectations or estimates of future company results or other guidance.  Equitable specifically cautions investors not to apply these statements to other contexts.

Compensation Discussion and Analysis

Compensation Philosophy

·                  Compensation Is Designed to Achieve the Company’s Objectives

The objectives of Equitable’s compensation programs are to attract, motivate and retain highly-talented executives who can ensure that the company is able to safely, efficiently and profitably produce, transport and deliver natural gas products and energy services to wholesale and retail customers.  The company seeks executives who are willing to trade off guaranteed compensation for the opportunity presented by at-risk compensation that depends on achieving challenging performance objectives.  To that end, the Compensation Committee designed a compensation package that establishes target compensation at the median level for similar positions at comparable companies.  To create the necessary performance incentive, the compensation programs provide not only for increased pay as a reward for above-median performance but also for below-median pay for sub-par performance.  Stated differently, the programs are structured to require a commitment to performance because pay at the market median is not guaranteed.

·                  Compensation Is Related to Performance and Is Aligned with the Company’s Strategic Plan

The total compensation package of each named executive officer is weighted in favor of at-risk compensation through both annual and long-term performance-based incentive pay.  Each of these programs links payout to the company’s performance on specific pre-established, objective performance measures.

The 2007 compensation referenced in the Summary Compensation Table for each named executive officer reflects the company’s commitment to performance-based pay.  The amount of the total salary and incentive pay at risk against performance objectives for the named executive officers of the company in 2007 ranged from 82% to 94%.

23

⁽¹⁾  This column reflects each named executive officer’s base salary as of December 31, 2007, which, because of adjustments during 2007, may be different from amounts reflected in the “Salary” column of the Summary Compensation Table.

⁽²⁾  This column reflects each named executive officer’s annual incentive compensation for 2007, which is also included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

⁽³⁾  This column reflects an assumed payout of the 2005 Executive Performance Incentive Program (the “2005 EPIP”) and the value of restricted share awards granted in 2007, as of December 31, 2007.  This column assumes that the 2005 EPIP payout equals the target share award multiplied by a 2.25 performance multiple, the assumed future payout for the program on December 31, 2008.  Resulting shares are multiplied by $53.28 which was the closing price of the company’s common stock on December 31, 2007.  The final number is then divided by four to calculate the annual value of the total award which covers the period January 1, 2005 to December 31, 2008.  Mr. Gerber was awarded three-year cliff vested restricted shares in 2007, which was multiplied by $53.28 and divided by three to determine the annual value of the three-year award.  The amounts in this column do not, and are not intended to, reflect the SFAS No. 123R expense for the awards described.  The SFAS No. 123R expense for the year ended December 31, 2007 is set forth in the “Stock Awards” column of the Summary Compensation Table.

The Compensation Committee aligns its executive compensation decisions with the strategic plan for the company.  The company’s strategic plan for recent years has focused on superior earnings per share growth and industry-leading return on total capital, with an added emphasis in 2007 on growth value drivers-each of which is a performance measure under the company’s incentive plans.

·                  Total Compensation Should Be Competitive

The company competes for executive talent with companies in the energy industry as well as with those in general industry; accordingly, the Compensation Committee structures a total compensation package that compares favorably but does not offer above-market pay except for outstanding performance when objectives have been met.  The Compensation Committee annually benchmarks each element of total direct compensation (which includes base salary and annual and long-term incentives) and the mix of compensation (cash versus equity) against the applicable comparator group.  The company targets each element of compensation at the 50th percentile for median performance in order to remain competitive for executive talent.  However, executives have an opportunity, through annual and long-term incentives, to earn more based on higher levels of performance.  Pay at the market median is not assured unless performance is also at the median.

·                  Incentive Compensation Balances Short- and Long-Term Performance

The compensation programs are designed to maintain a balance between rewarding the achievement of strong short-term or annual results and ensuring the company’s long-term growth and success.  To this end, a mix of both annual and longer-term incentives is provided and allocated in a manner generally consistent with the applicable comparator group of companies.  Participation in both the short-term and long-term incentive programs increases at higher levels of responsibility as executives in these leadership roles have the greatest influence on the company’s strategic direction and results over time.  The company has chosen to pay both short- and long-term performance compensation, as well as a level of annual base salary necessary to maintain market competitiveness.

24

·                  Peer Groups Define Competitive Levels of Performance

The company looks to the performance of peer groups in measuring short-term and long-term performance.  The peer group for the short-term incentive plans (the “Short-Term Peer Group”) is reviewed with Towers Perrin annually for appropriateness, and the peer group for the long-term incentive plan (the “Long-Term Peer Group”) is reviewed with Towers Perrin for appropriateness in connection with the establishment of each program cycle.

For the 2007-Short Term Peer Group, the company chose a group of 11 similarly-sized, diversified energy companies which resemble the company in terms of business mix.  The companies in this peer group are:

The Long-Term Peer Group was selected by the Compensation Committee in 2005 with the adoption of the 2005 EPIP.  Because the time horizon for the 2005 EPIP extended over four years, the Compensation Committee believed it important for the Long-Term Peer Group to include companies with significant participation in one or more of the company’s lines of business, in addition to companies having a similar business mix profile.  The 29 companies in this group were chosen for their involvement in one or more of the following areas:  natural gas exploration and production, transmission and distribution.  This peer group was believed to be representative of the alternatives that shareholders have when deciding to invest in a diversified natural gas company.  The companies in this peer group include the Short-Term Peer Group together with the following:

During 2007, four members of the company’s peer groups completed significant transactions which resulted in those companies merging out of existence or going private.  Those companies, a summary of the significant transactions, and the impact of the transactions on the 2007 annual incentive and the 2005 EPIP are as follows:

25

(1)             Compensation Committee discretion.

(2)             As required by the 2005 EPIP.

·                  Compensation Should Be Tax Deductible to the Extent Possible

The Compensation Committee has considered the impact of the applicable tax laws with respect to compensation paid under the company’s plans, arrangements and agreements.  Section 162(m) of the Code disallows, with certain exceptions, a federal income tax deduction for annual compensation over $1 million paid to any covered employee.  The covered employees are the principal executive officer(s) and the three most highly-compensated officers other than the principal executive officer(s) and the principal financial officer(s).  An exception to the deduction limit is provided under the Code for performance-based compensation paid pursuant to shareholder-approved plans that meet certain criteria.

The 1999 Long-Term Incentive Plan, as amended and approved by the shareholders in 2004 (“1999 LTIP”), provides for award opportunities that are designed to qualify as performance-based compensation under Section 162(m) of the Code.  More specifically, awards under the company’s primary long-term incentive program for executives, the 2005 EPIP, are anticipated to be deductible up to the amount of the individual award cap established in the 1999 LTIP.

In addition, the shareholders approved the continuation of the Executive STIP in April 2006, which permits the payment of annual incentive awards that are designed to be deductible performance-based compensation under Section 162(m) of the Code, subject to the individual award cap under the Executive STIP.

Although the Compensation Committee has generally attempted to structure compensation to preserve deductibility, it also believes that there are circumstances where the company’s interests are best served by maintaining flexibility in the way compensation is provided, even if it might result in the non-deductibility of certain compensation under the Code.  For example, the company has the ability to grant restricted shares under the 1999 LTIP that are not designed to qualify as performance-based compensation under the Code.  In 2007, approximately $5.2 million of the compensation paid to the named executive officers was not tax deductible mainly as a result of the vesting of restricted shares during the year.  This resulted in a foregone federal tax deduction of approximately $1.8 million.

26

·                  Executives Are Encouraged to Own Stock

The company established stock ownership guidelines in 1995.  Consistent with the goal of driving long-term value creation for shareholders, the guidelines require significant executive stock ownership.  The company believes that the company’s stock ownership guidelines exceed the stock ownership guidelines of both comparator groups described below.  As of December 31, 2007, the named executive officers met the stock ownership guidelines, as set forth below:

Qualifying shareholdings include stock owned directly, shares held in the company’s 401(k) or employee stock purchase plans, and time-based restricted stock.  As long as an executive maintains qualifying shareholdings in excess of the applicable guideline, he or she may sell shares or exercise options for cash by selling shares.  An executive’s failure to meet the stock ownership guidelines may influence an executive’s mix of cash and non-cash compensation.  After a transition period for new executives, compliance with the guidelines is mandatory.  Executives are not permitted to hedge their shares or otherwise invest in company stock derivatives.

Stock options and 2005 EPIP awards are not qualifying shareholdings for the purposes of the stock ownership guidelines.  However, these equity interests provide the named executive officers with significant additional exposure to the value of the company’s stock.

Making Executive Compensation Decisions

·                  Determining Target Total Direct Compensation

In the first quarter of each year, the Compensation Committee establishes the target total direct compensation for executive officers by establishing base salaries, setting the incentive targets, determining equity award grants and, if appropriate, modifying perquisites.  When establishing target total direct compensation (base salary plus annual and long-term incentive) for each executive officer, the Compensation Committee considers:

·                                          market median target total direct compensation information compiled by Towers Perrin for the applicable comparator group of companies;

·                                          current compensation information; and

·                                          Mr. Gerber’s compensation recommendations.

Assuming good prior year performance by an executive officer, the predominant factor in determining target total direct compensation is the market median target total direct compensation for the applicable comparator group.  In 2007 and historically, the target total direct compensation for Mr. Gerber who served as the Chairman and Chief Executive Officer and Mr. Porges who served as the President and

27

Chief Operating Officer was determined by reference to the market median total direct compensation paid to their peers in two comparison markets:

·                                          the energy companies that form the Long-Term Peer Group as reported in the proxies of each company;  and

·                                          the 114 general industry companies that form the Towers Perrin US CDB General Industry Executive Database with Global Corporate Revenue between $1 billion and $3 billion and are identified in Appendix A to this proxy statement.

In 2007 and historically, the target total direct compensation for the remaining named executive officers was determined by reference to the Towers Perrin general industry salary survey data described above.  General industry companies are used because the company’s competitors for executive talent are not limited to the energy industry and for certain of these positions skills from varied backgrounds may be desirable.  The comparator group for the Chairman and Chief Executive Officer and the President and Chief Operating Officer contains an industry focus due to the importance of experience in selecting and retaining individuals for those positions.

In considering the amount and type of each component of compensation, the Committee considers the effect on all other elements to maintain target total direct compensation at the market median for the applicable comparator group.  An individual’s actual target, and the allocation between cash and equity, may be adjusted up or down when other compensation components do not reflect the market median.  Compensation previously earned by the named executive officers, however, does not typically affect the Compensation Committee’s compensation decisions. This reflects the Compensation Committee’s view that an executive’s compensation level should reflect the market value of his or her services. The Compensation Committee further believes that reducing an executive’s compensation based on the value of past compensation would weaken the competitiveness of the company’s compensation programs and the incentive to achieve superior performance in the future and make it more difficult to attract, motivate and retain executive talent.

In 2007, the compensation of Messrs. Gerber and Porges substantially exceeded the compensation of the other named executive officers. This differential is consistent with, and largely driven by pay differentials reflected in the applicable comparator group.  Although Mr. Crawford lead the Equitable Utilities segment which accounted for approximately 36% of the company’s net operating revenues in 2007, his total direct compensation approximates that of Mr. O’Brien, who lead the Equitable Supply segment which accounted for approximately 64% of the company’s net operating revenues in 2007, because of Mr. Crawford’s contributions to the gathering operations of the Equitable Supply segment.

·                  Tally Sheets

Annually the Compensation Committee is provided with a tally sheet for each executive officer designed to provide the Compensation Committee with a full picture of the executive’s compensation history as well as of all compensation payable upon his or her termination of employment and upon a change of control.  Each tally sheet sets forth:

·                                          current base salary, annual incentive target, long-term incentive target and perquisites;

·                                          a five-year history of base salary, annual incentive targets and awards and perquisites; and

·                                          a complete history since hire date of long-term incentive awards, including realized gains as well as potential gains on unexercised or unvested awards.

28

The tally sheets also reflect the value of compensation due to each named executive officer under certain termination scenarios, including:

·                                          termination of the executive by the company with and without cause, as defined in any applicable employment agreement or policy;

·                                          termination by the executive for good reason, as defined in the applicable agreement;

·                                          termination by the executive for other than good reason, including retirement; and

·                                          termination of the executive following a change of control.

With regard to each scenario the tally sheets include:

·                                          the cash amounts payable to the executive, including outplacement and other payments;

·                                          the cost of benefits continuation;

·                                          the value of all equity awards, including the acceleration of unvested equity awards and the value of forfeited awards;

·                                          the value of any excise or income tax gross-up;

·                                          retirement benefits; and

·                                          any other compensation payable to the executive upon termination.

·                  Equity Grant Processes

The Compensation Committee typically makes equity grants at regularly scheduled meetings set in excess of one year in advance of the grant date.  The Committee does not coordinate the timing of equity grants with the release of material non-public information.  If in possession of such information, the Compensation Committee does not take such information into account when determining whether or in what amounts to make such grants.  The Company has not granted options since 2003.  Restricted shares and performance units awarded by the Committee vest multiple years after grant and, accordingly, the value received by the employee reflects the publication of any information available to the Committee at the time of grant.

The Compensation Committee has not delegated its authority to award equity to any executive officer.  The Compensation Committee has delegated to Mr. Gerber the authority to grant a limited number of restricted shares to non-officers under the following circumstances:

·                                          to newly hired or recently promoted employees on the condition that the value of the individual award not exceed the  50^th percentile of market; and

·                                          to other employees in recognition of service on the conditions that no award exceed 1,000 shares or be made to a participant in the 2005 EPIP.

All such awards must be made on standard terms approved by the Compensation Committee and are reported to the Compensation Committee for informational purposes at its next meeting.  Mr. Gerber authorizes restricted stock grants on an as needed basis and does not coordinate the timing of such grants with the release of material non-public information.  If in possession of such information, Mr. Gerber does not take such information into account when determining whether or in what amount to make such grants.

·                  Role of the Compensation Consultant

The Compensation Committee has the authority to hire, terminate and approve fees for advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities.  Towers

29

Perrin was hired by the Compensation Committee to provide market data and counsel regarding executive officer compensation programs and practices, including specifically:

·                                          comparator group benchmarking;

·                                          peer group identification and assessment;

·                                          advice and market insight as to the form of and performance measures for annual and long-term incentives; and

·                                          marketplace compensation trends in the company’s industry and generally.

Towers Perrin does not make recommendations on, or approve, the amount of compensation for any executive officer.  The Compensation Committee may request information or advice directly from Towers Perrin and may direct the company to provide information to Towers Perrin.  Towers Perrin regularly interacts with representatives of the company’s human resources department and periodically with the Chairman and Chief Executive Officer, the President and Chief Operating Officer and the Senior Vice President, General Counsel and Corporate Secretary.

Towers Perrin also provides limited middle and senior management compensation benchmarking to the company and director compensation services to the Corporate Governance Committee of the Board, including benchmarking and trend identification.  Of the total compensation paid to Towers Perrin in 2007, 85% related to its work for the Compensation Committee and the Corporate Governance Committee.

Components of the Company’s Compensation Program

The following describes each element of the company’s executive compensation arrangements, how the amount of each element is determined and how each element, and the company’s decisions with respect to it, fits into the company’s overall compensation objectives and affects decisions regarding other elements.  The eight components are:  base salary, annual incentives, long-term incentives, special equity grants, health and welfare benefits, retirement programs, perquisites and agreements.

·                  Base Salary

Base salary for each named executive officer is established based on the scope of his or her responsibilities and experience, taking into account competitive market compensation paid by the comparator group for similar positions.  Generally, because the Compensation Committee favors pay-for-performance, base salary levels are capped at the 50th percentile of the applicable comparator group.  Base salaries and new survey data are reviewed by the Compensation Committee annually and adjustments to executive officer salaries are considered:

·                                          when the survey data demonstrates a deviation from the market;

·                                          to recognize outstanding individual performance; or

·                                          to recognize an increase in responsibilities over the prior year.

Even when one of the above circumstances exists, a salary adjustment is not automatic.

In 2007, the base salaries of Messrs. Porges, Conti, Crawford and O’Brien were increased to move closer to the market median for their respective positions.  In January 2008, Mr. Conti’s base was further increased from $285,000 to $325,000 based on market movements for his position, and Mr. Crawford’s base was further increased from $285,000 to $325,000 in recognition of his promotion to President of the company’s new Equitable Midstream and Equitable Distribution segments.  Mr. Crawford was previously the President of the Equitable Utilities segment.

30

·      Annual Incentives

Before or at the start of each year, the Compensation Committee approves:

·                                          the target annual incentive award for each executive officer.  These target awards are expressed as a percentage of base salary and, consistent with the Compensation Committee’s philosophy, generally set at the 50th percentile of the applicable comparator group of companies.  For 2007, the Compensation Committee approved target incentive awards as follows:  Mr. Gerber, 100%; Mr. Porges, 80%; Messrs. Conti, Crawford and O’Brien and Ms. O’Loughlin, each 50%;

·                                          the performance measure for determining maximum awards under the Executive STIP;

·                                          the sum of the incentive targets for employees (the “incentive pools”); and

·                                          the performance measures to be applied in determining the actual incentive awards, and the weighting for each performance measure.

After the end of each year, the Compensation Committee:

·                                          certifies the level at which the Executive STIP performance measure was satisfied;

·                                          reviews the calculation of the incentive pools, approves the amount of the incentive pools and determines whether, and the extent to which to exercise its downward discretion; and

·                                          approves the amount of incentive award payable to each executive officer.

The incentive pools are calculated at levels lower than the maximum awards available under the Executive STIP.  The Committee uses the incentive pools as a basis to exercise its negative discretion with respect to actual incentive awards payable.

The 2007 headquarters incentive pool payout multiple depended upon actual performance on, and weighting of, each performance measure, as follows:

⁽¹⁾  ROTC is calculated as follows:

Net Income+ (Interest x (1 – Effective Tax Rate))

(Debt + Book Equity – Cash)

Net Income is calculated for the first three quarters and then annualized. Debt (long-term and short-term), book equity (shareholders equity less other comprehensive income) and cash are the average of the quarter end amounts for the four quarters ending September 30, 2007. The failure to achieve a minimum ROTC of 8% may result in a reduction of the incentive pools by up to 25%, as determined by the Compensation Committee in its sole discretion.

⁽²⁾ The Compensation Committee may in its discretion increase the payout multiple for best in class performance in relative ROTC and EPS compared to plan.

31

The Compensation Committee selected the performance measures for the following reasons:  Return on total capital (“ROTC”) is an important measure of the success of the company’s investment decisions.  Earnings per diluted share (“EPS”) growth drives behavior consistent with the shareholder’s interests, and the company’s business plan embodies the goals and priorities of the company.  The growth value drivers were identified as the critical steps to achieving the company’s strategic initiatives.

In 2007, the Company:

·                                          had ROTC of approximately 16%, placing it in the top quartile among the Short-Term Peer Group for relative ROTC (for a payout multiple of 2.00X);

·                                          had EPS of $2.10 per share which was approximately 20% in excess of plan (for a payout multiple of 2.00X);

·                                          met the growth value drivers (for a payout multiple of 1.00X).  The Compensation Committee viewed as most significant the company’s success in developing plans to accelerate drilling development of its Appalachian acreage and to improve transportation of gas to market.  These plans are evidenced by, among other things, the previously announced 2008 forecasted capital commitments budget of $1.2 billion, largely related to well development and midstream infrastructure.  In addition, the Committee was satisfied with the company’s commercial strategy, plan to improve Equitable Gas Company’s customer service, external affairs strategy, expanded diversity efforts and corporate structure review.

In applying the multipliers to the weightings above for each performance measure, the 2007 headquarters incentive pool was determined to be 1.70X of the target pool.  The incentive funding for Messrs. Gerber, Porges, and Conti and Ms. O’Loughlin is based 100% on the headquarters incentive pool.  The incentive funding for Messrs. Crawford and O’Brien is based 80% on the headquarters incentive pool described above and 20% on the incentive pool for their business segments, Equitable Utilities and Equitable Supply, respectively, each of which had a payout of 1.30X.

The maximum awards under the Executive STIP assume superior performance levels by executive officers.  Accordingly, the Committee also considers the following as a basis for exercising negative discretion in determining the actual incentive award for each executive officer:

·                                          a report by the Corporate Governance Committee regarding Mr. Gerber’s performance.  Mr. Gerber provides a self assessment to the Corporate Governance Committee, which then meets in executive session without any company officer present to evaluate his performance.  The meeting is also attended by the Chair of the Compensation Committee who reports the results of the evaluation to the Compensation Committee at the time officer compensation is approved; and

·                                          a report by Mr. Gerber, prepared in consultation with Mr. Porges, regarding the performance of each other executive officer.

The Committee considered each executive officer’s contribution to the development and execution of the company’s growth value drivers and longer term initiatives and the development of their respective management teams.  In addition, the Committee assessed Mr. Gerber’s overall leadership, ongoing effective succession planning and communications with analysts and shareholders.

The performance measure adopted by the Compensation Committee under the Executive STIP establishes the maximum amount of annual incentive awards that the Committee may approve as “performance-based compensation” for tax purposes pursuant to Section 162(m) subject to the shareholder approved individual limit set forth in the Executive STIP, and does not necessarily set an expectation for the amount of annual incentive that will actually be paid.  The Compensation Committee is permitted to

32

exercise, and has historically exercised, its discretion downward in determining the actual payout under the annual incentive plan.  The Committee may not exercise upward discretion.  The 2007 performance measure approved for the Executive STIP was EPS compared to the company’s business plan as follows:

EPS compared to the business plan was selected because EPS growth drives behavior consistent with the shareholder’s interests and the company’s business plan embodies the goals and priorities of the company.

Based on 2007 EPS, each executive officer’s award under the Executive STIP was three times his or her base salary.  The Committee exercised downward discretion based upon consideration of the size of the actual incentive pool compared to the size of the target pool and then made adjustments to reflect each executive officer’s performance review.  See the Summary Compensation Table column entitled “Non Equity Incentive Plan Compensation” for the annual incentive plan payout made to each named executive officer for 2007.

The Executive STIP provides that the annual awards will be paid in cash, subject to Committee discretion to pay in equity in the event an executive officer has not met his or her stock ownership guidelines.

Annual incentive expense is accrued during the year in which it is earned and is therefore deducted from the financial results prior to calculation of the performance measures used to determine the awards.  Accordingly, the program is self-funding because performance objectives must be overachieved to compensate for the performance plan expense.

·      Long-Term Incentives

The 2005 EPIP is currently the primary vehicle for delivering long-term incentive compensation to executive officers.  It is a four-year program that provides stock based awards designed to have a strong retention impact and forge a direct link between executive compensation and long-term corporate performance.

The Compensation Committee approved the 2005 EPIP in February 2005 after thoroughly discussing the program design over a series of seven meetings.  During these meetings, a number of alternate program designs were evaluated and various performance metrics were evaluated to achieve the best fit with the company’s goal of shareholder growth while providing appropriate rewards for profitable results.

During extensive review sessions with Towers Perrin and management, the Compensation Committee considered a number of competing criteria, such as stock options versus shares, performance versus time-based vesting, operational performance versus growth objectives, overlapping versus front end loaded multi-year cycles, relative versus absolute performance measures, and symmetrical versus asymmetrical payout above and below the performance median.  The Compensation Committee also discussed and evaluated the merits of specific performance measures, including total shareholder return (“TSR”), earnings per share, ROTC and net income, the relationship among the selected measures in the program formula and the multiple of target to be established for each performance level.  Other relevant factors considered included the composition of the peer group, the optimum number of participants, the period for calculating initial and ending stock price and the effect of death or disability of a participant prior to

33

vesting.  In particular, the Compensation Committee wrestled with the need to fix objectives that would continue to provide a meaningful measure of performance over a four-year period and would be flexible enough to provide appropriate rewards despite the potential for significant unusual events for the company (e.g., an acquisition), for peers (e.g., unusually poor performance at commencement of the period) or for the market in general (e.g., Hurricane Katrina).

In order to more fully examine the range of possible plan outcomes under various economic circumstances, the Compensation Committee subjected the proposed performance matrix to a systematic sensitivity analysis using 11 years of financial and stock performance data for the Long-Term Peer Group normalized to market data for chief executive officer total direct compensation.  In order to validate the range of potential outcomes under the program as designed, a number of actual and hypothetical scenarios were modeled, and results for the proposed program under each set of circumstances were compared with outcomes using traditional 10-year stock options and, separately, using the 2003 performance-based stock program design (which excluded the ROTC modifier).  The Compensation Committee approved the program design after concluding that interaction of the plan elements yielded compensation that was appropriate and not excessive and that the proposed use of share units with a cap on the multiple of target would result in less volatility and in outcomes better aligned with the business results than would comparable (uncapped) stock option awards, and even represented a slight improvement in alignment with strategic objectives versus the TSR-only performance-based stock approach.

The Compensation Committee approved the following performance measures for the 2005 EPIP:

·                                          The company’s TSR at the end of a four-year period (January 1, 2005 to December 31, 2008) against that of the Long-Term Peer Group; and

·                                          The company’s average absolute ROTC over the same four-year period.

The payout opportunity under the 2005 EPIP formula ranges from:

·                                          no payout if Equitable Resources is one of the lowest-ranking four companies in the peer group as to TSR and has average absolute ROTC of less than 9%, or if TSR performance places the company among the 13 lowest-ranked companies and average absolute ROTC is below 8%; to

·                                          target payout if the company is the median performer in the Long-Term Peer Group as to TSR and has average absolute ROTC of between 8% and 9%; to

·                                          two and one-half times the target award if the company is one of the four highest-ranking companies in the Long-Term Peer Group as to TSR and has average absolute ROTC that is at least 10%.

Median ROTC performance for plan purposes was set above actual peer median performance because the Committee decided that target ROTC should exceed that of the company’s competitors, as well as the company’s cost of capital.

If earned, the share units are expected to be paid in a combination of cash and shares in the discretion of the Compensation Committee.  No further awards can be made under the program.

Under the 2005 EPIP, target awards were developed for each named executive officer for the four-year program at the 50th percentile of the applicable comparator group.  In considering the target awards to be granted to the named executive officers, the Compensation Committee evaluated whether other components of the executive’s target total direction compensation were below the 50th percentile of the applicable comparator.

Average absolute ROTC is calculated by dividing the sum of each quarter’s ROTC (as defined under Annual Incentives above) by the number of whole completed quarters in the performance period.

34

TSR for the company and each company in the Long-Term Peer Group is calculated as follows:

·                                A “Beginning Point” of one share of such company’s stock with a value equal to the average closing stock price as reported in The Wall Street Journal for the ten (10) business day period prior to and including the date of the Committee’s approval of the 2005 EPIP.

·                                Dividends paid from the beginning of the performance period are cumulatively added to the Beginning Point as additional shares of such company’s stock. The closing price on the last business day of the month in which the record date for the dividend occurs is used as the basis for determining the number of shares to be added. The resulting total number of shares accumulated during the performance period will be referred to as the Total Shares Held at Ending Point.

·                                Except as provided in the following two sentences, an “Ending Point” is Total Shares Held at Ending Point for each company times the average closing stock price as reported in The Wall Street Journal for the last ten (10) business days of the performance period for each company. In the event of a change of control as then defined in the 1999 LTIP, the Ending Point is the Total Shares Held at Ending Point times the average of the closing price as reported in The Wall Street Journal for the ten (10) business days preceding the closing of the change of control transaction. The 2005 EPIP also establishes guidelines for the treatment of Long-Term Peer Group members that engage in significant transactions during the performance period (see “Peer Groups Define Competitive Levels of Performance” above).

·                                TSR is expressed as a percentage and is calculated by dividing the Ending Point by the Beginning Point and then subtracting 1 from the result.

The 2005 EPIP is accounted for as a variable plan in accordance with generally accepted accounting principles. Compensation cost for the 2005 EPIP is recognized over the four-year performance period based on anticipated stock price and expected level of performance at the end of the performance period, and is therefore deducted from the financial results prior to calculation of the performance measures used to determine the awards. Accordingly, the program is self-funding because performance objectives must be overachieved to compensate for the performance expense. The company tracks the potential payout of the 2005 EPIP each quarter for accrual purposes. The actual payout will depend on the company’s actual performance through, and the stock price on, the last day of the four-year performance period, December 31, 2008.

·      Special Equity Grants

From time to time, special equity grants are approved by the Compensation Committee in the form of time-based restricted stock awards. Special grants are typically considered (1) in connection with promotion where more stock exposure is desired; (2) to recognize extraordinary achievement; (3) in lieu of cash for annual incentive payments (where an employee has not met the stock ownership guidelines); or (4) when the survey data demonstrates a significant deviation from market total direct compensation for the applicable comparator group. Grants are made on the date the Compensation Committee takes action. Compensation expense for special grants is recorded over the applicable vesting period in accordance with generally accepted accounting principles.

In 2007, the Compensation Committee made a special equity grant of time-based restricted shares to Mr. Gerber (4,770 shares). In 2008, the Compensation Committee made special equity grants of time-based restricted shares to Messrs. Gerber (3,950 shares) and Porges (1,980 shares). These awards were made in

35

recognition of the company’s financial performance and implementation and execution of the company’s growth plan, in addition to the Compensation Committee’s desire to retain Messrs. Gerber and Porges. These awards vest three years after the grant date, contingent upon continued employment with the company on such date, subject to partial vesting in the event of death, disability or early involuntary termination without cause. During the vesting period, dividends on the restricted shares are paid in the form of additional shares and the recipients have the ability to vote the shares.

·      Health and Welfare Benefits

Named executive officers receive the same health and welfare benefits offered to other Equitable employees including medical, prescription drug, dental, vision, short- and long-term disability, flexible spending accounts, holiday pay, and an employee assistance program. The same contribution amounts, percentages and plan design provisions are applicable to all employees.

·      Retirement Programs

The named executive officers participate in the same defined contribution 401(k) plan as other non-represented employees at Equitable. Under the plan, the company automatically contributes an amount equal to 6% of each participant’s base salary to an individual investment account for the employee, subject to applicable tax regulations. In addition, the company matches a participant’s elective contribution by contributing to the participant’s individual investment account an amount equal to 50% of each dollar contributed by the employee, subject to a maximum company contribution of 3% of the employee’s base salary and to applicable tax regulations. Because the company does not match annual incentive compensation the defined contribution plan is below the 50th percentile of each comparator group.

Once contributions for highly-compensated employees (including the named executive officers) reach the maximum level permitted under the 401(k) plan or by regulation, both company and employee contributions can be continued on an after-tax basis through the purchase by the employee of a retirement annuity product of Fidelity Investments Life Insurance Co. This program contains no vesting requirements.

The company currently has no supplemental executive retirement plan (SERP) covering or deferred compensation obligations to any employee, including executive officers. No executive officer participates in a defined benefit retirement plan with the company.

·      Perquisites

In 2007 the Compensation Committee conducted a thorough review of executive perquisites in comparison with competitive information provided by Towers Perrin. Consistent with its philosophy of pay for performance, the company provides modest perquisites to its executives that, in number and value, are below median competitive levels for the applicable comparator group. Perquisites that are provided to each named executive officer include the following: car allowance, country and dining club memberships, executive physical, financial planning, parking, life insurance and accidental death and disability insurance (both of which exceed the level of insurance provided to other employees) and limited spousal travel as described below.

The company conducts a substantial amount of its operations in remote parts of Virginia, Kentucky and West Virginia. In order to effectively implement the company’s growth strategy and facilitate communication between onsite employees and management, all of the company’s employees have increased their travel schedule. Because of the limited number of flights from the Pittsburgh International Airport to the smaller airports within close proximity to the company’s operations, in 2007 the Company entered into an agreement to charter planes to facilitate business travel. In connection with that decision,

36

management recommended, and the Compensation Committee approved, allowing spouses to accompany executives on business travel subject to approval by the Chief Executive Officer. Otherwise, personal and entertainment usage of the aircraft at company expense is prohibited.

Mr. O’Brien’s permanent residence is in Andover, Massachusetts. In 2007, Mr. O’Brien commuted via commercial aircraft to Pittsburgh, Pennsylvania and, periodically, other locations in fulfilling his role as President of the Equitable Supply segment. The Compensation Committee approved a reimbursement of approximately $59,000 for Mr. O’Brien’s 2007 commuting and living expenses, which includes a tax gross-up.

The company does not own or lease condominiums or townhouses, watercraft, or executive dining facilities for the named executive officers. The company does not employ chauffeurs, personal security guards, chefs or house staff for any officer. See footnote (8) to the “All Other Compensation” column in the Summary Compensation Table for a discussion and breakdown of the perquisites provided to the named executive officers in 2007.