Form 3\Window
Exhibit 99.4
SEVERANCE
COMPENSATION 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 Executive identified below
("the Executive").
Date:
,
Executive:
Factor:
[ 150, 200, 300]%
W I T N E S S
E T H :
WHEREAS, Executive is an effective and valuable employee of
Energen and/or one or more of its subsidiaries;
WHEREAS, Executive desires certain assurances with respect to
any change in control of Energen;
WHEREAS, Energen recognizes that the uncertainties involved in a
potential or actual change in control of Energen could result in
the distraction or departure of management personnel such as
Executive to the detriment of Energen and its shareholders; and
WHEREAS, Energen desires to lessen the personal and economic
pressure which a potential or actual change in control may impose
on Executive and thereby facilitate Executive's ability to bargain
successfully for the best interests of Energen's shareholders in
the event of such a change in control;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, Energen and Executive hereby agree as
follows:
Section 1. Definitions . As used in this Agreement the
following words and terms shall have the following meanings:
(a)
" Applicable Period " means the period commencing with the
first to occur of (i) the earliest date that a Change in Control
occurs or (ii) Energen shareholder approval of a transaction which
upon consummation will constitute a Change in Control, and ending
on the first to occur of (iii) the last day of the thirty-sixth
calendar month following the calendar month during which such
Change in Control occurred or (iv) a determination by the Energen
Board of Directors that such Change in Control will not be
consummated. Anything in this Agreement to the contrary
notwithstanding, if a Change in Control occurs, and if the Date of
Termination with respect to Executive's employment with Energen
occurs prior to the date on which the Change in Control occurs, and
if it is reasonably demonstrated by Executive that such termination
of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect the Change in Control
or (ii) otherwise arose in connection with or in anticipation of
the Change in Control, then for all purposes of this Agreement the
"Applicable Period" shall be deemed to have commenced on the date
immediately preceding the Date of Termination.
(b)
" Cause " Termination of employment by Employer for "Cause"
shall mean termination based on any of the following:
(1)
The willful and continued failure by the Executive to substantially
perform Executive's duties with Employer (other than any such
failure resulting from Executive's incapacity due to physical or
mental illness) after a written demand for substantial performance
is delivered to Executive specifically identifying the manner in
which Executive has not substantially performed Executive's
duties;
(2)
The engaging by Executive in willful misconduct which is
demonstrably injurious to Employer monetarily or otherwise; or
(3)
The conviction of Executive of a felony.
(c)
" Change in Control " means the occurrence of any one or
more of the following:
(1)
The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule
13(d)-3 promulgated under the Exchange Act) of 25% or more of
either (i) the then outstanding shares of common stock of Energen
(the "Outstanding Common Stock") or (ii) the combined voting power
of the then outstanding voting securities of Energen entitled to
vote generally in the election of directors (the "Outstanding
Voting Securities"); provided, however, that for purposes of this
subsection (1) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by Energen or any
corporation controlled by Energen shall not constitute a Change in
Control;
(2)
Individuals who, as of October 1, 1999, constitute the Board of
Directors of Energen (the
"Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of Energen
(the "Board of Directors"); provided, however that any individual
becoming a director subsequent to such date whose election, or
nomination for election by Energen's shareholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors;
(3)
Consummation of a reorganization, merger or consolidation, or sale
or other disposition of all or substantially all of the assets, of
Energen (a "Business Combination"), in each case, unless, following
such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 75% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns Energen or all or substantially
all of Energen's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Outstanding Common Stock and Outstanding Voting Securities, as the
case may be, (ii) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or
related trust) of Energen or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
25% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board of Directors, providing
for such Business Combination;
(4)
Any transaction or series of transactions which is expressly
designated by resolution of the Board of Directors to constitute a
Change in Control for purposes of this Agreement.
(d)
" Code " means the Internal Revenue Code of 1986, as the
same may be from time to time amended.
(e)
" Compensation " means an amount equal to the sum of (A)
plus (B), where (A) is the Executive's annualized base salary in
effect immediately prior to the Measurement Event, and (B) is the
highest annual bonus awarded Executive by Employer pursuant to the
Energen Annual Incentive Compensation Plan (or any successor annual
cash incentive plan) with respect to the three (3) fiscal years
immediately preceding the fiscal year in which the Measurement
Event occurs. Compensation shall be calculated without reduction
for any amounts deferred by the Executive pursuant to the Energen
Corporation 1997 Deferred Compensation Plan.
(f)
" Date of Termination " means the date that a termination of
Executive's employment with Employer is first effective.
(g)
" Disability " means the total and permanent disability that
entitles Executive to a disability benefit under a disability
program sponsored and/or maintained by Energen.
(h)
" Employer" means Energen and its Subsidiaries.
(i)
" Exchange Act " means the Securities Exchange Act of 1934,
as amended.
(j)
" Good Reason " means the occurrence during an Applicable
Period of any of the following events without Executive's prior
written consent:
(1)
The assignment to Executive by Employer of duties inconsistent with
Executive's position, authority, duties, responsibilities and
status with Employer immediately prior to the Measurement Event, or
a change in Executive's titles or offices as in effect immediately
prior to the Measurement Event, or any removal of Executive from or
any failure to reelect Executive to any of such positions, if such
assignment, change, or removal results in a diminution in
Executive's position, authority, duties, responsibilities or status
with Employer immediately prior to the Measurement Event or any
other action by Employer that results in such a diminution in
Executive's position, authority, duties, responsibilities or
status,
(2)
A reduction in Executive's aggregate rate of monthly base pay from
the Employer;
(3)
The termination or material adverse modification of the Energen
Annual Incentive Compensation Plan or the Energen Corporation 1992
Long-Range Performance Share Plan (or any other short or long-term
incentive compensation plan in effect immediately prior to the
Measurement Event) without substitution of new short or long-term
incentives providing comparable compensation opportunities for
Executive.
(4)
A failure by Employer to use its best efforts to provide Executive
with either the same fringe benefits (including retirement benefits
and paid vacations) as were provided to Executive immediately prior
to the Measurement Event or a package of fringe benefits that,
though one or more of such benefits may vary from those in effect
immediately prior to the Measurement Event, is substantially
comparable in all material respects to the fringe benefits (taken
as a whole) in effect prior to the Measurement Event;
(5)
Executive's relocation by Employer to any place more than 25 miles
from the location at which Executive performed the substantial
portion of Executive's duties prior to the Measurement Event,
except for required travel by Executive on Employer's business to
an extent substantially consistent with Executive's business travel
obligations immediately prior to such Measurement Event;
(6)
Any material breach by Energen of any provision of this Agreement
or any other agreement between Energen and Executive which breach
continues for a period of thirty days following delivery by
Executive to Energen of written notice of such breach.
(k)
" Independent Auditor " means the firm of certified public
accountants that at the time of the Change in Control had been most
recently engaged by Energen to render an opinion on Energen's
consolidated financial statements, or any other firm of certified
public accountants mutually agreeable to Energen and Executive.
(l)
" Measurement Event" means (i) the Change in Control if the
Date of Termination is on or after the date of the Change in
Control or (ii) commencement of the Applicable Period if the Date
of Termination is prior to the date of the Change in Control.
(m) "
Notice of Termination " has the meaning set forth in
Section 2(a) of this Agreement.
(n)
" Qualified Termination " shall mean
(1)
during a Window Period, any termination (including retirement) of
Executive's employment, other than for Cause, death or Disability,
and
(2)
during the Applicable Period but not during a Window Period,
(i)
a termination by Employer of Executive's employment other than for
Cause,
(ii)
a termination of Executive's employment which Executive and Energen
agree in writing will constitute a Qualified Termination for
purposes of this Agreement, or
(iii) a
voluntary termination of Executive's employment by Executive for
Good Reason.
(o)
" Subsidiary " means any corporation, the majority of the
outstanding voting stock of which is owned directly or indirectly,
by Energen.
(p)
" Window Period " shall mean the 30-day period immediately
following the first anniversary of a Change in Control.
Section 2.
Notice of Termination . During any
