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EXHIBIT 10(d)
ADDENDUM TO
EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT
THIS ADDENDUM TO THE Executive Retirement Supplement Agreement is made
and entered into as of the date set forth below, by and between Energen
Corporation, an Alabama corporation (the "Company") and the employee of the
Company identified below (the "Executive").
Date: May 15, 2000
Executive: SAMPLE EMPLOYEE
WHEREAS, the Executive and the Company have entered into an Executive
Retirement Supplement Agreement, dated as of October 27, 1999 (the "SERP
Agreement");
WHEREAS, the SERP Agreement provides, in part, for an adjustment in
determining the Executive's benefits based upon an offset for certain amounts
provided the Executive under a split dollar life insurance or other agreement;
and
WHEREAS, the parties hereto desire to provide for the determination of
such offset;
NOW, THEREFORE, this Addendum to the SERP Agreement is hereby made and
shall be effective upon the effective date of the Split Dollar Insurance
Agreement.
(Note: Article and Exhibit Numbering is sequential to that of
the SERP Agreement)
ARTICLE 5 - ADDENDUM DEFINITIONS
In addition to the definitions and defined terms of the SERP Agreement, the
following definitions shall apply to this Addendum:
"ACTUARIALLY EQUIVALENT" means a benefit having the same value as the
amount it replaces, computed on the basis of the definition of Present Value
contained in Section 1.12 of the SERP Agreement.
"ELECTIONS I, II AND III" are as described in Article 7 paragraph c.
The "EXECUTIVE'S DEATH BENEFIT" is the life insurance death benefit
pursuant to section 4(b)(2) of the Split Dollar Insurance Agreement which is
paid to the Executive's beneficiary upon his death.
The "EXECUTIVE'S POLICY INTEREST" is the Executive's interest in the
policy's cash surrender value as defined in section 4(b)(1) of the Split Dollar
Insurance Agreement. The
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foregoing notwithstanding, if the Split Dollar Insurance Agreement terminates as
a result of the Executive's death, then the Executive's Policy Interest shall
equal the Executive's Death Benefit.
"POLICY SPLIT DATE" is the date that the Split Dollar Insurance
Agreement terminates.
"SERP BENEFIT COMMENCEMENT DATE" means the first date that a benefit
payment is made under the SERP Agreement.
The "SPLIT DOLLAR INSURANCE AGREEMENT" is that agreement dated May 15,
2000 by and between the Company and the Executive pursuant to the Energen
Corporation Officer Split Dollar Life Insurance Plan.
ARTICLE 6 - CALCULATION OF OFFSET
Section 2.2 of Article 2 of the SERP Agreement shall be applied and
interpreted as set forth in this Article 6. The Offset may result in a
Supplemental Retirement benefit of $-0-, and may further result in a
Supplemental Spouse's Retirement Benefit (as provided in Section 2.3 of the SERP
Agreement) of $-0-. In no event shall the Offset reduce the Supplemental
Retirement Benefit or the Supplemental Spouse's Retirement Benefit below $-0-:
(a) Policy Split prior to or contemporaneous with Benefit
Commencement. If the Policy Split Date occurs prior to or
contemporaneous with the SERP Benefit Commencement Date, then
the Offset shall be determined at the SERP Benefit
Commencement Date. If Election I applies, then the Offset
shall equal a monthly amount payable to the Executive in the
normal form (with no election of an optional form of payment)
provided under the Retirement Plan that is Actuarially
Equivalent to the Executive's Policy Interest at the Policy
Split Date. If Election II or III applies, then the Offset
shall be a lump sum amount that is equal to the Executive's
Policy Interest at the Policy Split Date.
(b) Policy Split subsequent to Benefit Commencement with Election
I or II. If the Policy Split Date occurs subsequent to the
SERP Benefit Commencement Date and Election I or II applies,
then the Offset will be determined at the Policy Split Date.
If Election I applies, then the Offset shall be $0 until the
Policy Split Date and on and after the Policy Split date shall
equal a monthly amount payable to the Executive in the normal
form (with no election of an optional form of payment)
provided under the Retirement Plan that is Actuarially
Equivalent to the Executive's Policy Interest at the Policy
Split Date. If Election II applies, then the Offset shall be a
lump sum amount that is equal to the Executive's Policy
Interest at the Policy Split Date.
(c) Policy Split subsequent to Benefit Commencement with Election
III. If the Policy Split Date occurs subsequent to the SERP
Benefit Commencement Date and Election III applies, then the
Offset will be determined at the SERP Benefit Commencement
Date. The Offset shall be a lump sum amount that is equal to
the Executive's Policy Interest at the SERP Benefit
Commencement Date.
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(d) Examples. The following examples are for discussion purposes only
and do not reflect actual or expected results or actuarial
calculations, nor do they reflect adjustments as of the
Eligibility Date for social security benefits.
Example d1: Policy Split Date Contemporaneous with SERP Benefit
Commencement. Assume that
(i) the Executive terminates employment at age 60;
(ii) depending on the applicable Election, the Executive's
SERP Agreement benefit is payable as a $550,000 lump
sum at the Severance Date or a $4,000 per month
annuity commencing at age 60;
(iii) the Executive's Split Dollar Insurance Agreement
terminates at the Severance Date;
(iv) the Executive's Policy Interest at the Policy Split
Date (which in this example is the same as the
Severance Date) is $500,000 and
(v) the monthly amount payable for the life of the
executive commencing at age 60 that is Actuarially
Equivalent to $500,000 is $3,600.
If Election I applies, then the Offset is $3,600 per month leaving a
Supplemental Retirement Benefit of $400 ($4,000 -$3,600) per month
commencing at age 60. If Election II or III applies, then the Offset is
$500,000 with the Executive receiving a SERP Agreement lump sum of
$50,000 ($550,000 - $500,000) within 45 days of the Severance Date.
Example d2: Policy Split Date Prior to SERP Benefit Commencement.
Assume that
(i) the Executive terminates employment at age 58;
(ii) depending on the applicable Election, the Executive's
SERP Agreement benefit is payable as a $500,000 lump
sum at the Severance Date or a $4,300 per month
annuity commencing at age 60;
(iii) the Executive's Split Dollar Insurance Agreement
terminates at the Severance Date (in this example,
age 58);
(iv) the Executive's Policy Interest at the Policy Split
Date (which in this example is the same as the
Severance Date) is $425,000 and
(v) the monthly amount payable for the life of the
Executive commencing at age 60 that is Actuarially
Equivalent to $425,000 is $3,200.
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If Election I applies, then the Offset is $3,200 per month leaving a
Supplemental Retirement Benefit of $1,100 ($4,300 -$3,200) per month
commencing at age 60. If Election II or III applies, then the Offset is
$425,000 with the Executive receiving a SERP Agreement lump sum of
$75,000 ($500,000 - $425,000) within 45 days of the Severance Date.
Example d3: Policy Split Date Subsequent to Benefit Commencement.
Assume that
(i) the Executive terminates employment at age 58;
(ii) depending on the applicable Election, the Executive's
SERP Agreement benefit is payable as a $500,000 lump
sum at the Severance Date or a $4,300 per month
annuity commencing at age 60 or $4,300 per month from
age 60 to age 65 plus a lump sum of $515,000 at age
65;
(iii) the Executive's Split Dollar Insurance Agreement does
not terminate until age 65 (based on Energen's
election to delay termination in accordance with the
Split Dollar Insurance Agreement);
(iv) the Executive's Policy Interest at the Severance Date
is $425,000 and at the Policy Split Date (in this
example, age 65) is $600,000 and
(v) the monthly amount payable for the life of the
executive commencing at age 65 that is Actuarially
Equivalent to $600,000 is $5,000.
If Election I applies, then from age 60 to age 65 the Executive will
receive a Supplemental Retirement Benefit of $4,300 per month which
will reduce to $0 per month at age 65 since the $5,000 per month Offset
exceeds the $4,300 per month Supplemental Retirement Benefit. If
Election II applies, then from age 60 to age 65 the Executive will
receive a Supplemental Retirement Benefit of $4,300 per month at which
time the $600,000 Offset will exceed the age 65 lump sum of $515,000
resulting in no further payment to the Executive under the SERP
Agreement. If Election III applies, then the Offset is $425,000 with
the Executive receiving a SERP Agreement lump sum of $75,000 ($500,000
- $425,000) within 45 days of the Severance Date
Example d4: Executive Death Prior to Benefit Commencement. Assume that
(i) while actively employed, the Executive dies at age 50
and is survived by his spouse (the Split Dollar
Insurance Agreement terminates upon the Executive's
Death);
(ii) the Executive's Death Benefit is $1,400,000;
(iii) the Executive's SERP Agreement benefit that the
Executive would have received had his death not
occurred (determined as of his date of death and
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depending on the applicable Election) is a lump sum
of $200,000 or $1,300 per month commencing at age 55;
and
(iv) that $9,700 per month commencing at age 55 is the
Actuarial Equivalent of $1,400,000. Regardless of the
Election the Spouse's benefit under the SERP
Agreement is generally 50% of the benefit that the
Executive would have received.
If Election I applies, then the Supplemental Retirement Benefit is
$1,300 per month and the Offset is $9,700 thus the Supplemental
Spouse's Retirement Benefit is -$0-. If Election II or III applies,
then the Executive's lump sum is $200,000 and the Offset is $1,400,000,
thus the Spouse's lump sum is -$0-.
ARTICLE 7 - SERP BENEFIT PAYMENT ELECTION
a. The provisions of this Article 7 supersede and replace Section
2.5 of the SERP Agreement and any payment elections previously made pursuant to
Section 2.5 or other provisions of the SERP Agreement. The Executive has
selected and benefits under the SERP Agreement will be paid in accordance with
the SERP Benefit payment election marked below. Such payment election shall be
effective immediately. Elections II and III shall each constitute "Lump Sum
Elections" for purposes of the SERP Agreement including, without limitation,
Section 2.3 of the SERP Agreement. Payment of the lump sum portion of Election
II and payment of the lump sum pursuant to Election III shall each constitute
"payment of a lump sum pursuant to Section 2.5" for purposes of Section 2.3(d)
of the SERP Agreement.
b. By executing and filing with the Company a form substantially
identical to Exhibit II hereof, or such other form as the Company may prescribe
or approve, the Executive may revoke an election made in paragraph (c) below 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.
c. The Executive has selected the payment election marked below:
MARK ONE
[ ] I. Full Annuity: The Supplemental Retirement Benefit
shall be payable in monthly installments as described
in Section 2.2 of the SERP Agreement.
[ ] II. Combination Annuity/Lump Sum: Until the date that the
Split Dollar Insurance Agreement is terminated, the
Supplemental Retirement Benefit shall be payable in
monthly installments as described in Section 2.2 of
the SERP Agreement. Upon termination of the Split
Dollar Insurance Agreement, in lieu of receiving the
remaining Supplemental Retirement Benefit, the
Executive shall be paid a lump sum that is the
Present Value, as of the date payment is made, of the
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remaining Supplemental Retirement Benefit. Such lump
sum payment shall be made as promptly as practical,
and in all events within 45 days, after the later of
the Executive's Severance Date or the date of
termination of the Split Dollar Insurance Agreement.
[ ] III. Lump Sum. In lieu of receiving the Supplemental
Retirement Benefit, the Executive shall be paid a
lump sum that is the Present Value, as of the date
payment is made, of the Supplemental Retirement
Benefit. Such payment shall be made as promptly as
practical after the Executive's Severance Date and,
in all events, within 45 days after such Severance
Date.
ENERGEN CORPORATION
By:
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W. David Self
Its: Vice President - Human Resources
EXECUTIVE
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SAMPLE EMPLOYEE
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EXHIBIT II
ELECTION
PURSUANT TO
ADDENDUM 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, dated as of
______________________, and/or the ADDENDUM TO EXECUTIVE RETIREMENT SUPPLEMENT
AGREEMENT, dated as of ______________________, entered into by and between
Energen Corporation and ___________________, and elect to have my benefit paid
as follows:
MARK ONE
[ ] I. Full Annuity: The Supplemental Retirement Benefit shall be
payable in monthly installments as described in Section 2.2 of the
SERP Agreement.
[ ] II. Combination Annuity/Lump Sum: Until the date that the Split
Dollar Insurance Agreement is terminated, the Supplemental Retirement
Benefit shall be payable in monthly installments as described in
Section 2.2 of the SERP Agreement. Upon termination of the Split Dollar
Insurance Agreement, in lieu of receiving the remaining Supplemental
Retirement Benefit, the Executive shall be paid a lump sum that is the
Present Value, as of the date payment is made, of the remaining
Supplemental Retirement Benefit. Such lump sum payment shall be made as
promptly as practical, and in all events within 45 days, after the
later of the Executive's Severance Date or the date of termination of
the Split Dollar Insurance Agreement.
[ ] III. Lump Sum. In lieu of receiving the Supplemental Retirement
Benefit, the Executive shall be paid a lump sum that is the Present
Value, as of the date payment is made, of the Supplemental Retirement
Benefit. Such payment shall be made as promptly as practical after the
Executive's Severance Date and, in all events, within 45 days after
such Severance Date.
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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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Participant
Accepted by:
ENERGEN CORPORATION
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By:
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Its:
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Date:
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