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EXHIBIT 10(c)
THIS EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT is made and
entered into as of the date set for below, by and between Energen Corporation,
an Alabama corporation (the "Company"), and the Executive identified below (the
"Executive").
Date: ,
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Executive:
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R E C I T A L S
The Executive has been employed by the Company and/or one or
more of its subsidiaries for a number of years, and as an employee has provided
capable executive leadership and management so as to enable the Company to
operate efficiently and effectively. The Company and the Executive desire to
enter into this Agreement to provide for payment to the Executive and the
Executives eligible spouse certain deferred compensation in the form of a
retirement supplement under certain circumstances.
NOW, THEREFORE, in consideration of the mutual promises of
the parties and the parties agree as follows:
ARTICLE 1 -- DEFINITIONS
1.1 Agreement: This document, including any attached schedules,
and any amendments to the same.
1.2 Birthday: An anniversary of the Executive's birth regardless
of whether the Executive survives to such anniversary.
1.3 Cause: Termination of employment by the Employer for "Cause"
shall mean termination based on any of the following:
(a) The willful and continued failure by the Executive to
substantially perform such Executive's duties with the Employer (other than any
such failure resulting from such Executive's incapacity due to physical or
mental illness) after a written demand for substantial performance is delivered
to the Executive specifically identifying the manner in which such Executive
has not substantially performed such Executive's duties;
(b) The engaging by the Executive in willful misconduct
which is demonstrably injurious to the Employer monetarily or otherwise; or
(c) The conviction of the Executive of a felony.
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1.4 Code: The Internal Revenue Code of 1986, as the same may
from time to time be amended.
1.5 Committee: The Officers Review Committee of the Board of
Directors of the Company or any person or persons appointed by the Board of
Directors to administer the Agreement.
1.6 Compensation: The sum of A plus B. For purposes of this
definition, A shall equal the average aggregate monthly basic pay from all
Employers for the 36 consecutive calendar months during which the Executive had
the highest average monthly basic pay out of the 60 calendar months immediately
preceding the Severance Date. For purposes of this definition, B shall equal C
divided by 12, where C equals the average of the Executive's three highest
annual cash incentive awards under the Energen Annual Incentive Compensation
Plan (or successor annual cash incentive plan) for the five Company fiscal
years immediately preceding the earlier of (i) the fiscal year during which the
Severance Date occurs or (ii) the fiscal year during which the Executive's 61st
birthday occurs. Compensation shall be calculated without reduction for any
amounts deferred by the Executive pursuant to the Energen Corporation 1997
Deferred Compensation Plan and without increase for any amounts distributed to
the Executive under said Deferred Compensation Plan.
1.7 Disability: Total and permanent disability which entitles the
Executive to a disability benefit under the disability program sponsored and/or
maintained by the Company or the Executive's Employer.
1.8 Eligibility Date: The earliest date on which the Executive
could be entitled to receive the Executive's "primary insurance amount" or any
portion thereof under the federal Social Security Act as amended and in effect
on the Severance Date assuming that the Executive survives to such date.
1.9 Employer: The Company and any and all subsidiaries of the
Company and their respective successors and assigns.
1.10 Lump Sum Election: An election made by the Executive pursuant
to Section 2.5 to receive a lump sum payment in lieu of the Supplemental
Retirement Benefit.
1.11 Normal Retirement Date: The first day of the month on or next
following the Executive's 60th Birthday; provided, however, if the Executive's
employment with an Employer continues beyond such date, the first day of the
month on or next following the date on which the Executive actually Retires
shall be Normal Retirement Date.
1.12 Present Value: The present value of a benefit or benefits
determined using (i) the mortality assumptions which would be utilized to
determine actuarial equivalent benefits under the Retirement Plan for a
participant retiring on the Severance Date and (ii) either the RIP Discount
Rate or the Section 280G Discount Rate, as specified below. The "RIP Discount
Rate" is the discount rate which would be utilized to determine actuarial
equivalent benefits under the Retirement Plan for a participant retiring on the
Severance Date. The "RIP Discount Rate" shall be used to determine Present
Value under this Plan if the Severance Date results from a termination of the
Executive's
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employment due to death, Disability or Retirement; provided, that the RIP
Discount Rate shall not be used in connection with a Retirement if its use will
result in a parachute payment for purposes of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"). The "Section 280G Discount Rate"
is the discount rate used to determine the present value of payments under
Section 280G of the Code (or a successor provision of the Code), which rate is
in effect at the date payment is to be made. The 280G Rate shall be used to
determine Present Value under this Plan in all instances in which the RIP
Discount Rate is not applicable. If there is no Section 280G Discount Rate,
then the RIP Discount Rate shall be used. In determining whether use of the RIP
Discount Rate will result in a parachute payment, the Committee may rely on the
advice of its tax and/or legal advisors and, upon the request of the Executive,
will at the Company's expense obtain an opinion as to such issue from a
nationally recognized firm of certified public accountants to be selected by
the Committee in its reasonable discretion (if it otherwise qualifies, the
Committee may select a firm that is then or has previously been engaged as the
Company's independent auditor).
1.13 Retire or Retirement: Termination of employment (for whatever
reason including death) from all Employers after attaining age 60.
1.14 Retirement Plan: The "Energen Corporation Retirement Income
Plan," as the same may be amended and in effect from time to time hereafter.
1.15 Retirement Plan Benefit: The monthly amount of retirement
benefit payable to the Executive from the Retirement Plan in the normal form,
with no election of an optional form of payment, calculated under the terms of
the Retirement Plan as in effect on the Severance Date and with the following
assumptions: (I) the Executive will accrue no Years of Service or partial Years
of Service under the Retirement Plan after the Severance Date; (ii) the first
payment to the Executive under the Retirement Plan will be made on the first
day of the month on or next following the later of the Executive's 60th
Birthday or the Severance Date; and (iii) the Executive will live to the
payment date described in the preceding clause (ii).
1.16 Service: The number of the Executive's completed months of
continuous employment with the Employer ending on the Executive's Severance
Date.
1.17 Service Factor: If the Executive has 180 or more months of
Service then the Service Factor shall equal one (l). At any time prior to the
time when the Executive has both earned a vested benefit under the Retirement
Plan and been continuously employed by an Employer for five years, the Service
Factor shall be 0. Except as otherwise provided in the foregoing sentences, the
Service Factor shall be a fraction, the numerator of which shall be the number
of the Executive's months of Service and the denominator of which shall be 180.
1.18 Severance Date: The earlier of (I) the first date on which
(for whatever reason) the Executive is no longer employed by an Employer, or
(ii) the date of termination of this Agreement pursuant to Article 3.
1.19 Social Security Benefit: The amount of the monthly benefit,
as estimated by the Committee in a consistent and uniform manner, which, under
the provisions of the federal Social
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Security Act as amended and in effect on the Severance Date, such Executive is,
or will be, entitled to receive as the Executive's "primary insurance amount"
or any portion thereof at the later of the Eligibility Date or the Normal
Retirement Date assuming (i) that the Executive has or will make appropriate
and timely application for such benefit, (ii) that no event has occurred or
will occur by reason of which the amount of such benefit has been or will be
delayed, suspended or forfeited in whole or in part, (iii) that if the
Severance Date occurs prior to the Executive's 60th Birthday, the Executive
will continue to receive, until the Executive's 60th Birthday, earnings at the
Compensation rate taxable as wages by the Social Security Act, and (iv) that,
after the later to occur of the Executive's 60th birthday or Normal Retirement
Date, the Executive will have no further earnings taxable as wages by the
Social Security Act.
1.20 Spouse: The spouse to whom the Executive was married at the
date of the Executive's death and throughout the twelve-month period preceding
the Executive's Severance Date.
1.21 Supplemental Retirement Benefit: The benefit described in
Section 2.2.
1.22 Supplemental Spouse's Retirement Benefit: The benefit
described in Section 2.3.
1.23 The masculine gender shall be deemed to include the feminine;
the feminine to include the masculine; the singular to include the plural; and
the plural to include the singular in each case where appropriate.
ARTICLE 2 -- BENEFITS
2.1 Eligibility. The Executive and Spouse, as applicable, shall
be entitled to the benefits described in Sections 2.2 and 2.3; provided, that
no benefits shall be paid under this Agreement if (I) the Executive's
employment by an Employer is terminated for Cause, or (ii) the Severance Date
occurs for any reason before the Executive has both earned a vested benefit
under the Retirement Plan and been continuously employed by an Employer for
five years.
2.2 Supplemental Retirement Benefit. Subject to the other
provisions of this Agreement, commencing on the Executive's Normal Retirement
Date the Executive shall be entitled to receive a Supplemental Retirement
Benefit, which shall be payable monthly during the Executive's life with the
last payment being the payment made or due for the month in which the Executive
dies. No benefit shall be payable under this Section 2.2 if the Executive dies
on or before the Normal Retirement Date.
The Supplemental Retirement Benefit shall be an amount equal
to "X" minus "Y" where "X" equals the product of "A" multiplied by the Service
Factor and "Y" equals the "Offset". With respect to Supplemental Retirement
Benefit payments made for periods commencing prior to the Eligibility Date, "A"
shall equal the amount by which 60% of Compensation exceeds the Retirement Plan
Benefit. With respect to Supplemental Retirement Benefit payments made for
periods commencing on or after the Eligibility Date, "A" shall equal the amount
by which 60% of Compensation exceeds the sum of the Retirement Plan Benefit
plus the Social Security Benefit. The
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"Offset" shall equal zero ($0) unless Executive has entered into a written
split dollar life insurance or other agreement which expressly references this
agreement and specifies an "Offset" to the Supplemental Retirement Benefit, in
which event the "Offset" shall be as specified in such other agreement.
If the Executive terminates employment due to Disability, (I)
the period that the Executive receives disability benefits from a disability
program sponsored or maintained by an Employer shall be treated as Service, and
(ii) the Supplemental Retirement Benefit shall not commence, and the Executive
shall not be deemed to have had a Severance Date, while the Executive is
receiving disability benefits payable from a disability program sponsored or
maintained by an Employer. For purposes of this Section 2.2, reclassification
under the Retirement Plan from Disability Retirement to Retirement shall
constitute cessation of disability benefits.
2.3 Supplemental Spouse's Retirement Benefit.
(a) Subject to the other provisions of this Agreement,
following the Executive's death the surviving Spouse shall be entitled to a
Supplemental Spouse's Retirement Benefit, which shall be payable monthly
commencing on the later of (i) the first day of the month following the month
of the Executive's death or (ii) the first day of the month of the Executive's
55th Birthday, and continuing until the Spouse's death. The Supplemental
Spouse's Retirement Benefit shall be an amount equal to 50% of the monthly
Supplemental Retirement Benefit which the Executive would have been entitled to
receive had death not occurred (based on Service through the Severance Date and
adjusting on the Eligibility Date); provided that if the Executive's death
occurs after the Severance Date, for each of the first three months following
the Executive's death the Supplemental Spouse's Retirement Benefit shall be
100% of such amount.
(b) If the Executive shall die while a Lump Sum Election
is in effect and while the Executive is still employed by the Employer, the
surviving Spouse shall receive in lieu of the benefit described in Section
2.3(a) above, a lump sum payment equal to one-half of the Present Value of the
Supplemental Retirement Benefit which the Executive would have been entitled to
receive based on Service through the Severance Date if the Executive had
survived to the Normal Retirement Date. Such benefit shall be paid as promptly
as practicable after the Executive's death and, in all events, within
forty-five (45) days after the Executive's death. For purposes of this Section
2.3(b), the determination of whether a Spouse has survived the Executive shall
be made in accordance with the provisions of Section 43-8-43 of the Code of
Alabama of 1975, as the same may from time to time be amended (as of the date
of this Agreement, Section 43-8-43 generally treats a person as having
predeceased a decedent unless the person survives the decedent by five days).
(c) If the Executive shall die after the Severance Date,
while a Lump Sum Election is in effect, and prior to receipt of the lump sum
payment, the lump sum benefit shall be payable to the Executive's estate and no
Supplemental Spouse's Retirement Benefit shall be payable to the surviving
Spouse, if any.
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(d) If the Executive dies after payment of a lump sum
pursuant to Section 2.5, no Supplemental Spouse's Retirement Benefit shall be
payable to the Executive's surviving Spouse, if any.
(e) No benefit shall be payable following the Executive's
death except as provided in this Section 2.3.
2.4 Spouse's Age. If a Spouse who is entitled to a benefit under
this Article 2 is more than ten (10) years younger than the Executive, any
benefit payable to the Spouse under Section 2.3(a) (but not 2.3(b)) shall be
reduced by 1/20 for each full year of age difference more than ten (10).
2.5 Payment Elections.
(a) By checking the appropriate box on the
signature page of this Agreement, the Executive may elect to receive, in lieu
of the Supplemental Retirement Benefit to which the Executive will otherwise
become entitled under Section 2.2 hereof, a lump sum payment that is the
Present Value, as of the date payment is made, of such Supplemental Retirement
Benefit. Such payment shall be made as promptly as practicable after the
Executive's Severance Date and, in all events, within forty-five (45) days
after such Severance Date.
(b) By executing and filing with the Company a
form substantially identical to Exhibit I hereof, or such other form as the
Company may prescribe or approve, the Executive may revoke an election made
pursuant to paragraph (a) above or may make any election which could be made
pursuant to such paragraph, but any such election or revocation of an election
shall not become effective if the Executive's Severance Date occurs within one
year from the date such revocation or election is made.
2.6 Leave of Absence. In the event the Executive is granted a
leave of absence, the Executive's employment shall be deemed to continue and
shall be treated as Service, during the period of such leave of absence unless
specifically determined to the contrary by the Committee.
ARTICLE 3 -- AMENDMENT OR TERMINATION OF AGREEMENT
3.1 Subject to Section 3.2 below, the Company reserves the right
to terminate this Agreement at any time by action of its Board of Directors or
the Committee, and the continuance of this Agreement is not guaranteed to the
Executive.
3.2 No termination of this Agreement shall operate to reduce,
cancel or void the Company's obligation to pay benefits provided for under this
Agreement and accrued prior to the Severance Date.
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3.3 This Agreement may be amended by written instrument executed
by the Executive and by an officer of the Company thereunto duly authorized by
the Board of Directors of the Company.
ARTICLE 4 -- MISCELLANEOUS
4.1 This Agreement shall under no circumstances be deemed to have
any effect upon the terms or conditions of employment of the Executive. The
establishment and maintenance of this Agreement shall not be construed as
creating or modifying any contract between an Employer and the Executive nor is
it in lieu of any other benefits. This Agreement shall under no circumstances
be deemed to constitute a contract of insurance.
4.2 This Agreement shall not give the Executive the right to be
retained in the employ of an Employer or any right or interest hereunder other
than as specifically provided herein.
4.3 Benefits under this Agreement shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge or
encumbrance by the Executive or the Spouse and any attempt to so transfer or
encumber the benefits shall be null and void. Benefits under this Agreement
shall not be subject to or liable for the debts, contracts, liabilities,
engagements or torts of the Executive or of the Spouse nor may the same be
subject to attachment or seizure by any creditor of the Executive or the
Executive's spouse under any circumstances.
4.4 In the event of the Executive's Retirement, Disability or
death, the Executive or the Executive's Spouse, as the case may be, should
notify the Committee promptly, and the Committee will then provide a Claimant's
statement form for completion which should be returned to the Committee
together with evidence of Disability or with an official death certificate, if
applicable. In the event that any claim hereunder is denied, the Committee will
provide adequate notice in writing to the Executive or Spouse, setting forth
the specific reasons for such denial and, in addition, the Committee will
afford a reasonable opportunity for a full and fair review of those reasons.
4.5 This agreement constitutes a complete amendment and
restatement and fully supersedes that certain Executive Retirement Supplement
Agreement between the parties dated _________, 19____.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Executive has hereunto set
his/her hand and seal all as of the day and year first above written.
ENERGEN CORPORATION
By:
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Its: Chairman, President and Chief Executive Officer
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EXECUTIVE
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ELECTION
[ ] I hereby elect to have my benefit paid as provided in Section
2.2 of this Agreement.
[ ] Pursuant to Section 2.5 of this Agreement, I hereby elect to
have my benefit paid in a lump sum.
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EXHIBIT I
ELECTION
PURSUANT TO
EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT
I hereby revoke any and all elections heretofore made by me
pursuant to the terms of that certain Executive Retirement Supplement Agreement
entered into by and between Energen Corporation and myself dated as of,
________________________________, and elect to have my benefit
[ ] paid as provided in Section 2.2 of such Agreement.
[ ] paid in a lump sum pursuant to Section 2.5 of such
Agreement.
I understand that the foregoing election (and revocation, if
applicable), will not become effective if my Severance Date occurs within
one-year from the date of acceptance indicated below.
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EXECUTIVE
Accepted by:
ENERGEN CORPORATION
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By:
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Its:
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Date:
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