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EXHIBIT 10(n)
OFFICER SPLIT DOLLAR TAX MATTERS AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of
the date set forth below, by and between ENERGEN CORPORATION, an Alabama
corporation ("Energen"), and the party identified below as the "Participant".
Date: May 15, 2000
Participant: SAMPLE EMPLOYEE
W I T N E S S E T H:
WHEREAS, the Participant and Energen have entered into a Split
Dollar Insurance Agreement dated May 15, 2000 Dollar Agreement") under the
Energen Corporation Officer Split Dollar Life Insurance Plan; and
WHEREAS, the parties desire to set forth their understanding
with respect to certain tax matters related to the Split Dollar Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, Energen and Executive hereby agree as
follows:
Section 1. Definitions. Terms defined in the Split
Dollar Agreement shall have the same meanings for purposes of this Agreement. In
addition, the following words and terms shall have the following meanings for
purposes of this Agreement.
(a) "Cut-Off Date" means the earlier of (i) the date of
termination of the Split Dollar Agreement or (ii) the date specified by Energen
as the Cut-Off Date pursuant to Section 7.
(b) "Income Tax Liability" means federal, state and local
employment and income tax liability, attributable to the Split Dollar Agreement,
excepting Premium Tax Liability.
(c) "Interest Liability" means any interest and/or
penalty liability attributable to failure to timely report and/or pay Income Tax
Liability and/or such interest and/or penalty liability. The foregoing
notwithstanding, Interest Liability does not include any amounts accruing
subsequent to the thirtieth day following a final non-appealable determination
that such Income Tax Liability exists.
(d) "Policy Split Value" means the Participant's interest
in the Policy's cash surrender value upon termination of the Split Dollar
Agreement.
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(e) "Premium Tax Liability" means tax on the value of the
economic benefit attributable to the life insurance protection provided to the
Participant under the Split Dollar Agreement.
(f) "Professional Fees" means all legal, accounting and
other professional fees and expenses which Participant may reasonably incur (i)
as a result of any contest (regardless of the outcome thereof) by Energen,
Participant or others of the validity or enforceability of, or liability under,
any provision of this Agreement (including as a result of any contest by
Participant about the amount of any payment pursuant to this Agreement) or (ii)
as a result of any contest by a taxing authority of Participant's tax treatment
of the Split Dollar Agreement to the extent such tax treatment is consistent
with Section 2(a).
(g) "Tax Basis" means the aggregate income upon which
federal Income Tax Liability has been incurred by the Participant for tax
periods ending before the Cut-Off Date.
(h) "Tax Liability" means Income Tax Liability and/or
Interest Liability.
(i) "Taxes" mean all federal, state, and local,
employment and income taxes payable or withheld with respect to Premium Tax
Reimbursements, Interest Reimbursements, Value Reimbursements and/or
Professional Fee Reimbursements (as defined in Sections 3, 4, 5 and 6). For
purposes of determining the amount of applicable Taxes the Participant shall be
deemed to pay:
(i) federal income taxes at the highest
applicable marginal rate of federal income
taxation for the calendar year in which the
applicable Reimbursement is to be made, and
(ii) any applicable state and local income taxes
at the highest applicable marginal rate of
taxation for the calendar year in which the
applicable Reimbursement is to be made, net
of the reduction in federal income taxes
which could be obtained from the deduction
of such state or local taxes if paid in such
year.
Section 2. Tax Position.
(a) The parties anticipate that the Participant
will have no Tax Liability for tax periods ending before the Cut-Off Date.
(b) The foregoing notwithstanding, neither party
makes any warranty or representation whatsoever to the other with respect to the
tax consequences that may flow from the Split Dollar Agreement or with respect
to what positions the parties may take on their respective tax returns.
Section 3. Premium Tax Reimbursement. In the event that
the Participant incurs Premium Tax Liability for tax periods ending before the
Cut-Off Date, then Energen shall promptly make a payment to the Participant (the
"Premium Tax Reimbursement") in the amount sufficient to
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result in the net amount of the Premium Tax Reimbursement retained by the
Participant after deduction of applicable Taxes being equal to the Premium Tax
Liability.
Section 4. Interest Reimbursement. In the event that
the Participant incurs Interest Liability for tax periods ending before the
Cut-Off Date, then Energen shall promptly make a payment to the Participant (the
"Interest Reimbursement") in the amount sufficient to result in the net amount
of the Interest Reimbursement retained by the Participant after deduction of
applicable Taxes being equal to the Interest Liability.
Section 5. Value Reimbursement. In the event that the
Policy Split Value is less than the Tax Basis, then Energen shall promptly make
a payment to the Participant (the "Value Reimbursement") in the amount
sufficient to result in the net amount of the Value Reimbursement retained by
the Participant after deduction of applicable Taxes being equal to the amount by
which the Tax Basis exceeds the Policy Split Value. Upon such payment, the
"Executive's Policy Interest" under the Addendum to Executive Retirement
Supplement Agreement shall be increased to include the amount by which the Tax
Basis exceeds the Policy Split Value.
Section 6. Professional Fee Reimbursement. In the event
that the Participant incurs Professional Fees, Energen shall promptly make a
payment (the "Professional Fee Reimbursement") to the Participant in the amount
sufficient to result in the net amount retained by the Participant after
deduction of applicable Taxes being equal to the Professional Fees.
Section 7. Cut-Off Date. By written notice delivered to the
Participant, Energen may specify any date subsequent to the date of the notice
as the Cut-Off date.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
PARTICIPANT ENERGEN CORPORATION
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SAMPLE EMPLOYEE Vice President - Human Resources
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