AMENDMENT NUMBER 1
TO THE
SOUTHWESTERN ENERGY COMPANY
SUPPLEMENTAL RETIREMENT PLAN
WHEREAS, the Southwestern Energy Company (the "Company") maintains the
Southwestern Energy Company Supplemental Retirement Plan (the "SERP"); and
WHEREAS, it is desirable to amend the SERP to provide an offset to benefits
payable to a participant or a participant's beneficiary under the SERP for any
benefits provided under any split-dollar life insurance agreement between such
participant and the Company and to change the timing of the benefit payments
under the SERP.
NOW, THEREFORE, effective February 1, 1996, the SERP is amended as follows:
ARTICLE III
UNFUNDED BENEFITS
1. Section B.1 is amended in its entirety to read as follows:
"The Actuarial Equivalent of a Participant's or
Beneficiary's Unfunded Benefit under the Plan shall be paid to
the Participant or Beneficiary in a single lump sum on the
later of (a) the first day of the month following the one-year
anniversary of the Participant's termination of employment
with the Company or (b) the date that benefit payments under
the Pension Plan to such Participant or Beneficiary commence;
provided, however, that a Participant may elect that the
Actuarial Equivalent of his (or, in the event of the
Participant's death, his Beneficiary's) Unfunded Benefit under
the Plan be paid in the form of an annuity, beginning at the
same time and in the same form as the Participant's or
Beneficiary's benefit under the Pension Plan is paid, by
filing a written election with the Committee, on a form
provided by the Committee, at least one year before such
Participant's termination of employment with the Company. No
election or revocation of an election shall be effective if it
is received by the Committee less than one year prior to the
Participant's termination of employment."
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2. A new Section D is added to read as follows:
"D. Offset for Certain Benefits Payable Under Split-Dollar
Life Insurance Agreements.
1. Offset Value.
Some of the Participants under this Plan own life
insurance policies (the "Policies") purchased on their behalf
by the Corporation. The exercise of ownership rights under
these Policies by each Participant is, however, subject to
certain conditions (set forth in a "Split-Dollar Insurance
Agreement" between the Participant and the Corporation,
pursuant to which the Corporation holds a security interest on
the Policy) and, if the Participant fails to meet the
conditions set forth in the Split-Dollar Life Insurance
Agreement, the Corporation may exercise its security interest
in the Policy and cause the Participant to lose certain
benefits under the Policy. In the event that a Participant
satisfies the condition specified in Section 4 or 5 of the
Split-Dollar Life Insurance Agreement, so that the Participant
or his or her beneficiary becomes entitled to exercise rights
free from the Corporation's security interest under one of
those sections, or the Corporation's security interest is
otherwise released, the value of those benefits shall
constitute an offset to the Participant's Unfunded Benefits
otherwise payable under this Plan. As the case may be, this
offset (the "Offset Value") shall be equal to the cash
surrender value of the Policy at the time the Participant
becomes entitled to exercise rights free from the Company's
security interest, or in the case of the Participant's death,
the death benefits payable to the beneficiary under the
Policy. The Actuarial Equivalent of the Offset Value shall be
compared to the Actuarial Equivalent of the Unfunded Benefits
payable under this Plan (the "Plan Value"), and the Plan Value
shall be reduced by the Actuarial Equivalent of the Offset
Value at the time and in the manner described in Section D.2
or Section D.3 of this Article III.
2. Manner and Calculation of Payment.
If, at the time the Participant terminates
employment, the Plan Value exceeds the Actuarial Equivalent of
the Offset Value, the excess of the Plan Value over the
Actuarial Equivalent of the Offset Value shall be paid to the
Participant or Beneficiary at the time and in the manner
provided under Section B.1 of this Article III; provided,
however, that if such excess is less than $10,000, such excess
shall be paid immediately to the Participant or Beneficiary in
a cash lump sum. For this purpose, the Plan Value shall be
calculated by assuming that the Participant or Beneficiary
receives or commences receiving benefits under this Plan and
the Pension Plan on the earliest date that such benefits
become payable.
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3. Payment of Certain Benefits.
If the policy described in Section D.1 of this
Article III insures the life of an individual other than the
Participant (the "Insured party"), and if such Insured Party
dies prior to the Participant's becoming eligible for benefits
under the Plan, and if the Participant or Beneficiary
subsequently becomes eligible for benefits hereunder, the Plan
Value (as defined in Section D.1 of this Article III) shall
then be offset by the Actuarial Equivalent of the amount equal
to the death benefit previously paid to the Participant or the
Participant's beneficiary pursuant to the Split-Dollar Life
Insurance Agreement divided by the Tax Adjustment Factor (as
defined below). Any remaining Plan Value shall thereupon be
paid to the Participant or Beneficiary in a cash lump sum.
4. Tax Adjustment Factor.
For purposes of this Section D of Article III, Tax
Adjustment Factor shall mean a number, determined by the
Committee, which is equal to one minus the sum of (a) the
highest marginal federal personal income tax rate then in
effect and (b) the effective highest marginal state income tax
rate in the state in which the Participant resides, net after
the effect of the deduction for such state income tax for
federal income tax purposes."
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its duly authorized officers this 1st day of February, 1996.
SOUTHWESTERN ENERGY COMPANY
By __________________________
Its__________________________
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