SOUTHWESTERN ENERGY COMPANY
SUPPLEMENTAL RETIREMENT PLAN
Adopted as of
May 31, 1989
Amended and Restated as of
December 15, 1993
TABLE OF CONTENTS
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ARTICLE I Definitions....................................... 1
A. Actuarial Equivalent...................... 1
B. Beneficiary............................... 1
C. Board of Directors........................ 1
D. Change in Control......................... 2
E. Committee................................. 3
F. Corporation............................... 4
G. ERISA..................................... 4
H. Funded Benefit............................ 4
I. Funded Benefit Account.................... 4
J. IRC....................................... 4
K. Participant............................... 4
L. Pension Plan.............................. 4
M. Plan...................................... 4
N. Qualified Beneficiary Designation......... 4
O. Secular Trust............................. 5
P. Surviving Spouse.......................... 5
Q. Tax Liability............................. 6
R. Unfunded Benefit.......................... 6
ARTICLE II Effective Date.................................... 6
ARTICLE III Unfunded Benefits................................. 7
A. Determination of Unfunded
Benefits.................................. 7
(i)
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B. Form and Timing of
Unfunded Benefit Payments................. 7
C. Offset for Funded Benefit................. 8
ARTICLE IV Funded Benefits................................... 9
A. Discretionary Contribution................ 9
B. Distributions from the Funded
Benefit Account........................... 9
1. Early Distributions.................. 9
(a) Distributions of
Distributable Net
Income.......................... 9
(b) Tax Compensation
Distributions................... 9
2. Determination of Funded
Benefit.............................. 10
3. Form and Timing of Funded
Benefit.............................. 10
C. Vesting................................... 10
D. Beneficiaries............................. 10
ARTICLE V Plan Administration............................... 11
A. The Committee............................ 11
B. Powers, Duties, Etc. of the
Committee................................ 12
ARTICLE VI Miscellaneous.................................... 13
A. Amendment................................ 13
B. Termination.............................. 13
C. Funding.................................. 14
1. Unfunded Benefits.................. 16
2. Funded Benefits.................... 16
D. Benefits Not Assignable.................. 17
(ii)
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E. Plan Not a Contract of
Employment................................ 17
F. Benefits Payable to Minors,
Incompetents and Others................... 18
G. Payment of Participant's
Expenses.................................. 19
H. Construction.............................. 19
(iii)
ARTICLE I
DEFINITIONS
A. ACTUARIAL EQUIVALENT: The determination of
one benefit as actuarially equivalent to another using the
actuarial assumptions used for such purpose under the
Pension Plan, provided, however, that after a Change in
Control such assumptions may not be changed without the
written consent of the Participant affected by the change.
B. BENEFICIARY: With respect to a Participant's
Unfunded Benefit, any person entitled to receive any payment
of benefits due under the Pension Plan after a Participant's
death, whether pursuant to a Participant's designation or
otherwise, whose benefit payments have been reduced under
the Pension Plan as a result of (1) the compensation
limitation from time to time in effect under IRC Section
401(a)(17) or (2) the limitations imposed pursuant to IRC
Section 415. With respect to a Participant's Funded
Benefit, any Beneficiary named pursuant to a Qualified
Beneficiary Designation in accordance with Section D of
Article IV.
C. BOARD OF DIRECTORS: The Board of Directors of
the Corporation, and any persons empowered by the
Corporation's certificate of incorporation, the
Corporation's by-laws or resolution of the Board of
Directors of the Corporation, to exercise the powers of the
Board of Directors of the Corporation with respect to the
Plan.
D. CHANGE IN CONTROL: Any of the following:
(1) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act"), an "Acquiring Person") becomes
the "beneficial owner" (as such term is defined in Rule
13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Corporation representing
20% or more of the combined voting power of the
Corporation's then outstanding securities, excluding any
employee benefit plan sponsored or maintained by the
Corporation (or any trustee of such plan acting as trustee);
(2) the Corporation's stockholders approve an
agreement to merge or consolidate the Corporation with
another corporation (other than a corporation 50% or more of
which is controlled by, or is under common control with, the
Corporation);
(3) any individual who is nominated by the
Board for election to the Board of Directors of the
Corporation on any date fails to be so elected as a direct
or indirect result of any proxy fight or contested election
for positions on the Board;
(4) a Change in Control of the Corporation of
a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act occurs; or
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(5) a majority of the Board of Directors of
the Corporation determines in its sole and absolute
discretion that there has been a Change in Control of the
Corporation or that there will be a Change in Control of the
Corporation upon the occurrence of certain specified events
and such events occur.
Notwithstanding Paragraphs (1) through (4) of this
Section D, a Change in Control shall not occur by reason of
any event which would otherwise constitute a Change in
Control if, immediately after the occurrence of such event,
individuals who are Acquiring Persons and who were employees
of the Corporation immediately prior to the occurrence of
such event own, on a fully diluted basis, securities of the
Corporation representing (a) 5% or more of the combined
voting power of the Corporation's then outstanding equity
securities or (b) 5% or more of the value of the
Corporation's then outstanding equity securities.
E. COMMITTEE: Before a Change in Control, the
term "Committee" means the Committee appointed to assist the
Plan Administrator in administration of the Pension Plan
pursuant to Article X thereof. On or after a Change in
Control, the term "Committee" shall mean the Committee (as
defined in the preceding sentence) as it existed immediately
prior to such Change in Control, or such persons as shall be
designated by the members of such Committee to be their
successors.
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F. CORPORATION: Southwestern Energy Company or
any successor thereto.
G. ERISA: The Employee Retirement Income
Security Act of 1974, as amended.
H. FUNDED BENEFIT: The benefit payable to a
Participant pursuant to Article IV hereof.
I. FUNDED BENEFIT ACCOUNT: A separate account in
the Secular Trust reflecting the Corporation's contributions
pursuant to Article IV on behalf of each Participant,
adjusted to reflect any income, losses with respect thereto,
and any distributions therefrom.
J. IRC: The Internal Revenue Code of 1986, as
amended.
K. PARTICIPANT: Any participant in the Pension
Plan whose benefit payments under the Pension Plan have been
reduced as a result of (1) the compensation limitation from
time to time in effect under IRC Section 401(a)(17) or (2)
the limitations imposed pursuant to IRC Section 415.
L. PENSION PLAN: The Southwestern Energy Company
Pension Plan, as it may be amended.
M. PLAN: The Southwestern Energy Company
Supplemental Retirement Plan, as it may be amended.
N. QUALIFIED BENEFICIARY DESIGNATION: An
election by a Participant prior to his death to name a
Beneficiary with respect to his Funded Benefit Account:
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(1) if it is established to the satisfaction of
the Committee that the Participant does not have a
Surviving Spouse; or
(2) that is consented to by the Participant's Sur-
viving Spouse, unless the Surviving Spouse is the sole
Beneficiary. Such consent is irrevocable and must be
witnessed by a Plan representative or acknowledged by a
notary public, and must indicate the effect of the
election. If the Surviving Spouse is legally
incompetent to give consent, the Surviving Spouse's
legal guardian may give consent. In the case of a
benefit payable after death, the consent may be made
after the Participant's death.
O. SECULAR TRUST: A trust described in Section
C.2 of Article VI, which shall be the funding vehicle for
Participants' Funded Benefits.
P. SURVIVING SPOUSE: Except to the extent
otherwise provided in a qualified domestic relations order,
the person married to a Participant on the date of the
Participant's death. The spouse of a Participant shall not
be considered a Surviving Spouse if, at the time that the
spouse's status as a Surviving Spouse would be determined,
it is established to the satisfaction of the Committee that
(a) the spouse cannot be located; (b) the Participant is
legally separated; or (c) the Participant has been abandoned
by the Participant's spouse (as determined under applicable
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local law) and the Participant has an order issued by a
court of competent jurisdiction to such effect.
Notwithstanding clauses (b) and (c) above, a person shall be
considered a Surviving Spouse to the extent required under a
qualified domestic relations order.
Q. TAX LIABILITY: The amount determined by the
Committee to be the estimated federal, state and local
income taxes payable by a Participant in respect of
Participant's Funded Benefit Account, assuming that the
Participant is subject to the marginal federal income tax
rate applicable to the highest income level and the maximum
applicable marginal state and local income tax rate (based
on the Participant's state and city of residence as shown on
the records of the Corporation and the state and city in
which he works, but without otherwise taking into account
the Participant's individual circumstances).
R. UNFUNDED BENEFIT: The benefit payable to a
Participant or Beneficiary pursuant to Article III of the
Plan.
ARTICLE II
EFFECTIVE DATE
The Plan shall be effective with respect to
Participants or Beneficiaries whose benefit payments under
the Pension Plan commence or will commence on or after July
1, 1989.
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ARTICLE III
UNFUNDED BENEFITS
A. DETERMINATION OF UNFUNDED BENEFITS
A Participant's or Beneficiary's Unfunded Benefit
under the Plan (prior to the offset described in Section C
of this Article) shall be determined as the excess, if any,
of:
(1) the benefits to which such Participant or
Beneficiary would have been entitled under the Pension
Plan: (a) without regard to (i) the compensation
limitation from time to time in effect under IRC
Section 401(a)(17); and (ii) the limitations imposed
pursuant to IRC Section 415; and (b) assuming that any
Participant was employed by the Corporation at the time
of a Change in Control, such Participant had credit for
all purposes under the Pension Plan for three
additional years of service; over
(2) the benefits to which such Participant or
Beneficiary actually is entitled from time to time
under the Pension Plan.
B. FORM AND TIMING OF UNFUNDED BENEFIT PAYMENTS
1. A Participant's or Beneficiary's Unfunded
Benefit under the Plan shall be paid to the Participant or
Beneficiary in a single lump sum at the same time as
benefits to such Participant or Beneficiary under the
Pension Plan commence, unless the Committee directs that the
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Actuarial Equivalent of the Participant's or Beneficiary's
benefits under the Plan shall be paid at a different time
and in a different form.
2. Any payments hereunder shall be subject to any
applicable income tax withholding requirements.
C. OFFSET FOR FUNDED BENEFIT
The Unfunded Benefit, expressed as a lump sum,
payable to a Participant or Beneficiary shall be reduced by
the sum of (a) the value of the Participant's Funded Benefit
Account as of the date the Participant's Unfunded Benefit is
required to be paid pursuant to Section B of this Article,
(b) the aggregate amount of withholding taxes paid by the
Corporation, as a result of the federal, state and local
income taxes payable by the Participant in respect of the
Company's contributions to the Participant's Funded Benefit
Account, (c) the aggregate amount of payments by the
Corporation, distributions from the Participant's Funded
Benefit Account or amounts withheld by the trustee of the
Secular Trust, in each case in respect of federal, state or
local income taxes payable in respect of the Participant's
Funded Benefit Account and (d) the aggregate amount of any
other distributions from the Participant's Funded Benefit
Account prior to the date as of which the Participant's
Unfunded Benefit becomes payable.
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ARTICLE IV
FUNDED BENEFITS
A. DISCRETIONARY CONTRIBUTION
The Corporation may, but shall not be required to,
make such contributions to the Secular Trust on behalf of
such Participants as it shall determine from time to time in
its sole discretion. Each contribution to the Secular Trust
on behalf of a Participant shall be allocated to and held in
the Participant's Funded Benefit Account.
B. DISTRIBUTIONS FROM THE FUNDED BENEFIT ACCOUNT
1. EARLY DISTRIBUTIONS
(a) DISTRIBUTIONS OF DISTRIBUTABLE NET INCOME
Each Participant shall receive a distribution from
such Participant's Funded Benefit Account of the the income
of such Funded Benefit Account, including net realized
capital gains, annually and, in addition, shall receive a
distribution of such other amount from the Participant's
Funded Benefit Account as may be necessary to reduce the
taxable income of such Funded Benefit Account for each
taxable year, to the extent possible, to zero.
(b) TAX COMPENSATION DISTRIBUTIONS
Within 30 days after the end of each calendar year,
each Participant or Beneficiary shall receive a distribution
from the Participant's Funded Benefit Account equal to the
lesser of (i) the value of the Participant's Funded Benefit
Account or (ii) the excess, if any, of (A)
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the Tax Liability in respect of the Participant's Funded
Benefit Account for such calendar year (taking into account
any withholding taxes paid in respect of such Tax
Liability), over (B) the amount distributed pursuant to
Paragraph 1(a) of this Section B after reduction for any
applicable federal, state or local income taxes payable with
respect thereto.
2. DETERMINATION OF FUNDED BENEFIT
A Participant's Funded Benefit under the Plan shall
be determined as the value of the Participant's Funded
Benefit Account on the date benefits to such Participant
under the Pension Plan commence.
3. FORM AND TIMING OF FUNDED BENEFIT
A Participant's Funded Benefit under the Plan shall
be paid to the Participant in a single lump sum within 30
days after benefits to such Participant under the Pension
Plan commence.
C. VESTING
A Participant shall at all times be fully vested in
the value of his Funded Benefit Account.
D. BENEFICIARIES
Pursuant to a Qualified Beneficiary Designation, a
Participant may designate one or more Beneficiaries to re-
ceive any part or all of the Funded Benefit payable to him
under the Plan that has not been paid to him prior to his
death. Any consent by a Surviving Spouse or waiver of
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spousal consent shall be effective only with respect to such
Surviving Spouse. To the extent a Participant fails to make
such a designation or a designated Beneficiary does not
survive the Participant and there is no successor or
alternate Beneficiary or the designation is otherwise
ineffective, any amounts due after the Participant's death
shall be paid to his Surviving Spouse, or if there is no
Surviving Spouse, to the legal representative of his estate.
No Surviving Spouse or other Beneficiary shall have any
right to a Participant's Funded Benefits under the Plan
unless he shall survive the Participant.
Any designation of a Beneficiary must be filed with
the Committee in order to be effective. Any designation of
a Beneficiary may be revoked at any time prior to the date
of the Participant's death by filing a later designation
pursuant to a Qualified Beneficiary Designation or an
instrument of revocation with the Committee.
ARTICLE V
PLAN ADMINISTRATION
A. THE COMMITTEE
1. The Plan shall be administered by the
Committee.
2. The members of the Committee shall not receive
compensation with respect to their services for the
Committee.
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3. The Committee shall act by a majority of its
members at the time in office and such action may be taken
either by a vote at a meeting or in writing without a
meeting. The Committee may authorize any person to execute
any document or documents on its behalf, and any interested
person, upon receipt of notice of such authorization
directed to it, may thereafter accept and rely upon any
document executed by such authorized person until the
Committee shall deliver to such interested person a
revocation of such authorization.
4. A member of the Committee who also is a
Participant shall be disqualified from voting or acting upon
any matter relating specifically to the Participant.
B. POWER, DUTIES, ETC. OF THE COMMITTEE
1. The Committee shall have the power to construe
the Plan and to determine all questions of fact that may
arise thereunder, and any such construction or determination
shall be conclusively binding upon all persons interested in
the Plan.
2. Subject to the terms of the Plan, the
Committee may establish rules and procedures satisfactory to
it for the administration of the Plan and the transaction of
its business.
3. All payments of benefits or expenses of the
Plan shall be made by the Corporation at the direction of
the Committee.
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4. The Committee shall be the "named fiduciary" of
the Funded Benefit portion of the Plan, with full power to
manage and control Plan assets.
5. The Committee shall have all the rights,
powers, duties and obligations granted or imposed upon it
elsewhere in the Plan.
6. The Committee may designate other persons to
carry out the responsibilities of the Committee provided for
hereunder.
7. To the extent permitted under applicable law,
the Committee shall not be subject to and shall be
indemnified by the Corporation for any liabilities arising
from any action or omission respecting the Plan.
ARTICLE VI
MISCELLANEOUS
A. AMENDMENT
The Board of Directors shall have the right at any
time to amend the Plan in whole or in part, effective
retroactively, or otherwise, provided, however, that no
amendment shall decrease the amount that would be payable to
a Participant or Beneficiary hereunder determined as if the
Participant terminated employment with the Corporation
immediately prior to such amendment.
B. TERMINATION
The Board of Directors reserves the right to
terminate the Plan, provided, however, that such termination
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shall not decrease the amount payable to a Participant or
Beneficiary hereunder determined as if the Participant had
terminated employment with the Corporation immediately prior
to such amendment. All other provisions of the Plan shall
remain in effect unless otherwise amended.
C. FUNDING
1. UNFUNDED BENEFITS
The Unfunded Benefits payable under the Plan shall be
unfunded. Unfunded Benefits under the Plan shall be paid
from the general assets of the Corporation. The Corporation
may establish a trust pursuant to a trust agreement and make
contributions thereto for the purpose of assisting the
Corporation in meeting its obligations in respect of
Unfunded Benefits payable under the Plan. Any such trust
agreement shall contain procedures to the following effect:
(a) In the event of the insolvency of the
Corporation, the trust fund will be available to pay the
claims of any creditor of the Corporation to whom a
distribution may be made in accordance with state and
federal bankruptcy laws. The Corporation shall be deemed to
be "insolvent" if the Corporation is subject to a pending
proceeding as a debtor under the federal Bankruptcy Code (or
any successor federal statute) or any state bankruptcy code.
In the event the Corporation becomes insolvent, the Board
of Directors and chief executive officer of the Corporation
shall notify the trustee of that event as soon as
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practicable. Upon receipt of such notice, or if the trustee
receives other written allegation of the Corporation's
insolvency, the trustee shall cease making payments of
benefits from the trust fund, shall hold the trust fund for
the benefit of the Corporation's creditors, and shall take
such steps that are necessary to determine within 30 days
whether the Corporation is insolvent. In the case of the
trustee's actual knowledge of or other determination of the
Corporation's insolvency, the trustee will deliver assets of
the trust fund to satisfy claims of the Corporation's
creditors as directed by a court of competent jurisdiction;
(b) The trustee shall resume payment of benefits
under the trust agreement only after the trustee has
determined that the Corporation is not insolvent (or is no
longer insolvent, if the trustee had previously determined
the Corporation to be insolvent) or upon receipt of an order
of a court of competent jurisdiction requiring such payment.
If the trustee discontinues payment of benefits pursuant to
Paragraph 1 of this Section and subsequently resumes such
payment, the first payment on account of a Participant
following such discontinuance shall include an aggregate
amount equal to the difference between the payments which
would have been made on account of such Participant under
the trust agreement and the aggregate payments actually made
on account of such Participant by the Corporation during any
such period of discontinuance, plus interest on such amount
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at a rate equivalent to the net rate of return earned by the
trust fund during the period of such discontinuance.
2. FUNDED BENEFITS
(a) The Corporation shall establish the Secular Trust
pursuant to a trust agreement and make such contributions
thereto from time to time for the purpose of providing
Funded Benefits as it shall determine in its sole
discretion. The Secular Trust shall be irrevocable. The
Secular Trust shall provide for the distributions to
Participants described in Article IV hereof. Such
distributions shall be allocated first to the income of the
Secular Trust and then to principal.
(b) Notwithstanding anything in the Plan to the
contrary, at no time shall any part of the assets of the
Secular Trust be used for, or diverted to, purposes other
than for the exclusive benefit of Participants or their
Beneficiaries, and for defraying the reasonable costs of
administering the Plan, except that, if and to the extent
permitted by applicable law, a contribution which was made
by a mistake in fact or was conditioned upon the
deductibility of the contribution under IRC 404 shall be
returned to the Corporation within one year after the
payment of the contribution or the disallowance of the
deduction, to the extent disallowed, as the case may be.
(c) The trustee of the Secular Trust shall be subject
to the direction of the Committee or an investment manager
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selected by the Committee, and shall have no discretion with
respect to the management and control of the assets of the
Secular Trust, except to the extent that the trust agreement
provides that the trustee shall have the power to manage and
control the assets of the Secular Trust.
D. BENEFITS NOT ASSIGNABLE
Benefits provided under the Plan may not be
anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy,
execution or other legal or equitable process other than
pursuant to the laws of descent and distribution; provided,
however, that amounts in respect of a Participant's Funded
Benefit shall be paid pursuant to a qualified domestic
relations order within the meaning of Section 206(d) of
ERISA, under procedures established by the Committee. In
the event any amount of a Participant's Funded Benefit is
payable pursuant to a qualified domestic relations order,
payments to a Participant in respect of his Funded Benefit
shall be adjusted accordingly. A Participant's or
Beneficiary's Unfunded Benefit shall not increase as a
result of the payment of part or all of a Participant's
Funded Benefit pursuant to a qualified domestic relations
order.
E. PLAN NOT A CONTRACT OF EMPLOYMENT
The Plan is not a contract of employment, and the
terms of employment of any employee shall not be affected in
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any way by the Plan or related instruments except as
specifically provided in the Plan or such related
instruments. The establishment of the Plan shall not be
construed as conferring any legal rights upon any employee
for a continuation of employment, nor shall it interfere
with the right of the Corporation or an Affiliate (as
defined in the Pension Plan) to discharge any employee and
to treat him without regard to the effect which such
treatment might have upon him as a Participant. Each
Participant and all persons who may have or claim any right
by reason of his participation shall be bound by the terms
of the Plan and all agreements entered into pursuant
thereto.
F. BENEFITS PAYABLE TO MINORS, INCOMPETENTS AND OTHERS
In the event any benefit is payable to a minor or
an incompetent or to a person otherwise under a legal
disability, or who, in the sole discretion of the Committee,
is by reason of advanced age, illness or other physical or
mental incapacity incapable of handling and disposing of his
property, or otherwise is in such position or condition that
the Committee believes that such person could not utilize
the benefit for his support or welfare, the Committee shall
have discretion to apply the whole or any part of such
benefit directly to the care, comfort, maintenance, support,
education or use of such person, or pay the whole or any
part of such benefit to the parent of such person, the
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guardian, committee, conservator or other legal
representative, wherever appointed, of such person, the
person with whom such person is residing, or to any other
person having the care and control of such person. The
receipt of any such person to whom any such payment on
behalf of any Participant or Beneficiary is made shall be
sufficient discharge therefor.
G. PAYMENT OF PARTICIPANT'S EXPENSES
The Company shall pay to a Participant all legal
fees and expenses incurred by the Participant in seeking to
enforce any right or benefit provided to the Participant
under the Plan, as and when such expenses become due.
H. CONSTRUCTION
1. The portion of the Plan respecting Unfunded
Benefits is intended to qualify as a plan maintained
primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated
employees as referred to in Section 201(2) of ERISA, and its
terms shall be interpreted accordingly. The portion of the
Plan respecting Funded Benefits is intended to comply with
the applicable provisions of ERISA and its terms shall be
interpreted accordingly. Otherwise, the laws of the State
of Arkansas shall control the interpretation and performance
of the terms of the Plan.
2. If any provision of the Plan, or the
application of any such provision to any person or
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circumstances, shall be invalid under any federal or state
law, neither the application of such provision to persons or
circumstances other than those as to which such provision is
invalid nor any other provisions of the Plan shall be
affected thereby.
3. The headings and subheadings in the Plan have
been inserted for convenience of reference only, and are to
be ignored in any construction of the provisions thereof.
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