<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ENERGEN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
ENERGEN CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 24, 1996
To the Shareholders of
ENERGEN CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Energen Corporation will be held at the principal office of the
Company, 2101 Sixth Avenue North, Birmingham, Alabama, on Wednesday, January 24,
1996, at 10:00 A.M., Central Standard Time, for the following purposes:
1. To elect three directors to serve for a three-year term expiring in
1999;
2. To consider and take action on a proposal to amend the Energen
Corporation 1992 Directors Stock Plan, as more fully described in the
accompanying Proxy Statement; and
3. To transact such other business as may properly come before the Annual
Meeting.
Shareholders of record at the close of business on December 6, 1995 are
entitled to notice of and to vote upon all matters at the Annual Meeting. The
Annual Meeting may be adjourned from time to time without notice other than by
announcement at the meeting or any adjournments thereof, and any business for
which notice of the Annual Meeting is hereby given may be transacted at any such
adjournment.
By Order of the Board of Directors
DUDLEY C. REYNOLDS, Secretary
Birmingham, Alabama
December 21, 1995
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE.
<PAGE> 3
<TABLE>
<S> <C>
(ENERGEN LOGO) ENERGEN CORPORATION
--------------------------------------------
2101 Sixth Avenue North
Birmingham, Alabama 35203
(205) 326-2700
</TABLE>
December 21, 1995
To Our Shareholders:
It is our pleasure to extend to you a cordial invitation to attend the
Annual Meeting of Shareholders of Energen Corporation. The Meeting will be held
at the principal office of the Company in Birmingham on Wednesday, January 24,
1996, at 10:00 A.M., Central Standard Time.
Details of the matters to be presented at this meeting are given in the
foregoing Secretary's formal Notice of the Annual Meeting and in the Proxy
Statement that follows.
We hope that you will be able to attend this meeting so that we may have
the opportunity of meeting with you and discussing the affairs of the Company.
However, if you cannot attend, we would appreciate your signing and returning
the enclosed Proxy as soon as convenient so that your stock may be voted.
We have enclosed a copy of the Company's Annual Report to Shareholders for
the year ended September 30, 1995.
Yours very truly,
Rex J. Lysinger
----------------------------
Chairman of the Board and
Chief Executive Officer
<PAGE> 4
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF ENERGEN CORPORATION
JANUARY 24, 1996
------------------
This Proxy Statement is being furnished by the Board of Directors of
Energen Corporation, an Alabama corporation (the "Company"), in connection with
the solicitation of proxies for use at the Annual Meeting of Shareholders of the
Company to be held at the principal office of the Company, 2101 Sixth Avenue
North, Birmingham, Alabama, on Wednesday, January 24, 1996, at 10:00 A.M.,
Central Standard Time, and at any adjournment thereof (the "Annual Meeting"),
for the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders of the Company. It is contemplated that the Proxy Statement and
accompanying form of proxy will be mailed to Shareholders of the Company on or
around December 21, 1995.
In the absence of contrary instructions, the proxies received by the Board
of Directors will be voted FOR the election of all nominees for director of the
Company and FOR the proposal to amend the Energen Corporation 1992 Directors
Stock Plan. A Shareholder who has given a proxy may revoke it at any time prior
to its exercise by written notice of such revocation to the Secretary of the
Company, by executing and delivering to the Company a later dated proxy
reflecting contrary instructions, or by appearing at the Annual Meeting and
taking appropriate steps to vote in person. All proxies received by the Board of
Directors of the Company will be voted in accordance with the instructions
appearing on such proxy.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting the Shareholders of the Company will consider and
take action on the following matters and on such other matters as may properly
come before the meeting:
1. ELECTION OF DIRECTORS
Directors of the Company are elected on a staggered basis, with
approximately one-third of the directors being elected at each annual meeting
for three-year terms. Three directors are to be elected to serve for a term of
three years expiring at the 1999 Annual
<PAGE> 5
Meeting of Shareholders. The names of the nominees for director, as well as the
names of those directors continuing in office, are set forth in this Proxy
Statement. It is intended that the persons designated as proxies on the
accompanying form of proxy will vote such proxy, if not otherwise directed, FOR
the election of the three nominees listed below in this Proxy Statement.
NOMINEES FOR ELECTION AS DIRECTORS
FOR A THREE-YEAR TERM TO EXPIRE 1999
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- -------------------------- --------------------------------------------------
<S> <C>
J. Mason Davis, Jr........ Mr. Davis, 60, is a partner with the Birmingham,
Alabama law firm of Sirote & Permutt. He joined
the firm in 1984. Mr. Davis also serves as an
Adjunct Professor of Law at the University of
Alabama School of Law in Tuscaloosa, Alabama. He
is also Chairman of the Board of Directors of
Protective Industrial Insurance Company of
Alabama, Inc., based in Birmingham, Alabama.
Mr. Davis has served as a director of the Company
and Alabama Gas Corporation since September,
1992.
James S. M. French........ Mr. French, 55, is Chairman, President, Chief
Executive Officer, and a director of Dunn
Investment Company, the parent of a group of
companies in the construction industry and also
an investor in equity and income securities in
selected industries. Dunn was founded in 1878
and is headquartered in Birmingham. He joined
the firm in 1968 and became its President in
1974. He is also a director of Regions Financial
Corporation (formerly First Alabama Bancshares,
Inc.); Hilb, Rogal and Hamilton Company, a
network of insurance agencies; Stockham Valves
and Fittings, Inc.; and the subsidiaries of Dunn
Investment Company.
Mr. French has served as a director of the Company
since its formation in January, 1979 and has
served as a director of Alabama Gas Corporation
since April, 1978.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- -------------------------- --------------------------------------------------
<S> <C>
Wallace L. Luthy.......... Mr. Luthy, 62, retired effective December 31,
1995, as President and General Manager of Mobil
Natural Gas Inc., headquartered in Houston,
Texas. Mobil Natural Gas is a subsidiary of
Mobil Corporation and processes and markets
natural gas in the United States and Canada.
Upon his retirement, Mr. Luthy completed 40
years of service with Mobil.
Mr. Luthy has served as a director of the Company
and Alabama Gas Corporation since October, 1995.
</TABLE>
DIRECTORS WHOSE TERM EXPIRES IN 1997
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- -------------------------- --------------------------------------------------
<S> <C>
Rex J. Lysinger........... Mr. Lysinger, 58, is Chairman of the Board and
Chief Executive Officer of the Company and is a
director of each of the Company's subsidiaries.
He joined Alabama Gas Corporation in July, 1975
as a Vice President and was elected president in
1977. In 1981, Mr. Lysinger was named Chief
Executive Officer of the Company and its
subsidiaries and was named Chairman of the Board
effective October 1, 1982. He is also a director
of SouthTrust Bank of Alabama, N.A.; Associated
Electric & Gas Insurance Services Limited, a
mutual insurance company serving the United
States public utility industry; and a member of
the Board of Trustees of Samford University in
Birmingham, Alabama.
Mr. Lysinger has served as director of the Company
since its formation in January, 1979 and has
served as a director of Alabama Gas Corporation
since January, 1977.
Dr. Judy M. Merritt....... Dr. Merritt, 52, is President of Jefferson State
Community College located in Birmingham, Alabama.
Dr. Merritt was named president in 1979 and with
the exception of a four year assignment at
Florida International University in Miami,
Florida from 1975 to 1979, has been associated
with Jefferson State and its predecessor since
1965. She is also a member of the Board of
Directors of SouthTrust Bank of Alabama, N.A.
</TABLE>
3
<PAGE> 7
DIRECTORS WHOSE TERM EXPIRES IN 1997 -- (CONTINUED)
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- -------------------------- --------------------------------------------------
<S> <C>
Dr. Merritt has served as a director of the
Company and Alabama Gas Corporation since June,
1993.
Drayton Nabers, Jr. ...... Mr. Nabers, 55, is Chairman of the Board,
President, Chief Executive Officer and a director
of Protective Life Corporation and President and
a director of Protective Life Insurance Company.
He joined Protective Life Insurance Company in
1979 as Senior Vice President, Operations, and
General Counsel and served in that capacity
until his election as President of Empire
General Life Insurance Company in 1980 and his
election as President and Chief Operating
Officer of Protective Life in August, 1982. He
became Chief Executive Officer of Protective
Life in 1992 and Chairman of the Board in 1994.
Mr. Nabers is also a member of the Board of
Directors of National Bank of Commerce of
Birmingham.
Mr. Nabers has served as a director of the Company
and Alabama Gas Corporation since October, 1984.
</TABLE>
DIRECTORS WHOSE TERM EXPIRES IN 1998
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- -------------------------- --------------------------------------------------
<S> <C>
Dr. Stephen D. Ban........ Dr. Ban, 55, is President and CEO of Gas Research
Institute (GRI), a not-for-profit cooperative
research organization of the natural gas
industry, headquartered in Chicago. He joined
GRI in 1981, was first elected president in
April, 1987, and has overall responsibility for
GRI's multifaceted research and development
program in gas technology development, including
research and development related to gas supply
and end-use technologies. In 1991, Dr. Ban was
elected a director of UGI Corporation, a
Pennsylvania gas and electric utility and
national marketer of propane. In 1994 he became
a director of CALSTART, Inc., a California
non-profit consortium dedicated to the
development of advanced transportation
technologies utilizing clean alternative fuels
and cooperative research and development. He is
also a member of the Natural Gas Council and the
Board of Directors of the United States Energy
Association.
</TABLE>
4
<PAGE> 8
DIRECTORS WHOSE TERM EXPIRES IN 1998 -- (CONTINUED)
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- -------------------------- --------------------------------------------------
<S> <C>
Dr. Ban has served as director of the Company and
Alabama Gas Corporation since January, 1992.
George S. Shirley......... Mr. Shirley, 68, is retired City Board Chairman of
AmSouth Bank of Tuskaloosa, Tuscaloosa, Alabama,
with which he was associated from 1960 to 1994.
Mr. Shirley is also past president of the
Alabama Bankers Association, a former director
of the Birmingham Branch of the Federal Reserve
Bank of Atlanta and a member of the Board of
Trustees of the University of Alabama.
Mr. Shirley has served as a director of the
Company and Alabama Gas Corporation since
September, 1981.
Wm. Michael Warren, Jr.... Mr. Warren, 48, is President and Chief Operating
Officer of the Company and is a director of the
Company and each of its subsidiaries. He is also
President and Chief Executive Officer of Alabama
Gas Corporation and Taurus Exploration, Inc.,
the principal subsidiaries of the Company, and
President and Chief Operating Officer of certain
other Company subsidiaries. He joined Alabama
Gas Corporation in 1983 as Vice-President and
General Counsel and was elected President of
Alabama Gas Corporation in 1984. He was elected
President and Chief Operating Officer of the
Company in February, 1991 and was elected
President and Chief Executive Officer of Alabama
Gas and Taurus in September, 1995. He is also a
city director of AmSouth Bank of Alabama and a
member of the Board of Trustees of
Birmingham-Southern College.
Mr. Warren has served as a director of the Company
since January, 1986, and has served as a
director of Alabama Gas Corporation since
October, 1984.
</TABLE>
Mr. Harris Saunders, Jr. and Mr. W. Robbins Taylor, who have served as
directors of the Company since January, 1980 and January, 1981, respectively,
will retire from service as Directors and will not stand for re-election at the
Annual Meeting. They will continue to serve as Directors until January 24, 1996.
5
<PAGE> 9
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company has established a standing Audit
Committee currently composed of four directors who are not officers of the
Company. The members of the Audit Committee are: James S.M. French (Chairman),
Stephen D. Ban, Judy M. Merritt and Harris Saunders, Jr. The duties of the Audit
Committee are (1) to recommend to the Board of Directors a firm of independent
public accountants to serve as auditors, (2) to meet with representatives of the
auditors to review the planned scope of their audit and to review the results of
their examination, (3) to meet with representatives of the auditors and
management to discuss matters regarding the Company's accounting policies,
practices and related financial reporting, and the adequacy of the accounting
system and related internal accounting controls to safeguard corporate assets
and provide a basis for preparing materially reliable financial information, and
(4) to report to the Board of Directors the results of such meetings with such
recommendations as the Audit Committee deems appropriate. During the 1995 fiscal
year the Audit Committee held three meetings.
The Board of Directors of the Company has established an Officers Review
Committee currently consisting of four directors who are not officers of the
Company. The members of this Committee are: George S. Shirley (Chairman), J.
Mason Davis, Jr., Drayton Nabers, Jr., and W. Robbins Taylor. The duties of the
Officers Review Committee are to study and make recommendations to the Board of
Directors with regard to executive succession and compensation paid to officers
of the Company and its subsidiaries. During the 1995 fiscal year, the Officers
Review Committee held four meetings.
The Board of Directors of the Company has established a Finance Committee
currently composed of four directors who are not officers of the Company. The
members of the Finance Committee are: Harris Saunders, Jr. (Chairman), J. Mason
Davis, Jr., George S. Shirley and W. Robbins Taylor. The duties of the Finance
Committee are to review financial policy related to such matters as capital
structure and the issuance of securities necessary to finance the activities of
the Company. During the 1995 fiscal year, the Finance Committee held one
meeting.
The Board of Directors of the Company has established a Governance and
Nominations Committee currently composed of four directors who are not officers
of the Company. The members of the Governance and Nominations Committee are:
Drayton Nabers, Jr. (Chairman), Stephen D. Ban, James S. M. French and Judy M.
Merritt. The duties of the Governance and Nominations Committee are to review
and advise the Board of Directors on general governance and structure issues and
to review and recommend to the Board the term and tenure of Directors, consider
future Board members and recommend nominations to the Board. During the 1995
fiscal year, the Governance and Nominations Committee held two meetings.
6
<PAGE> 10
During the 1995 fiscal year the Board of Directors of the Company met nine
times. All directors of the Company attended at least 75% of the meetings of the
Board of Directors and the committees of the Board of which they are members.
DIRECTORS' COMPENSATION
During the 1995 fiscal year, directors who are not officers were paid a
monthly retainer of $1,000. In addition, non-officer directors of the Company
and of its subsidiaries were paid a fee of $1,000 for each meeting attended,
including committee meetings.
The Board of Directors, on November 27, 1991, adopted the Energen
Corporation 1992 Directors Stock Plan, which plan was approved by the
Shareholders on January 22, 1992. The plan provides for an annual grant and
issuance of two hundred shares of Common Stock, following the last day of the
fiscal year ended September 30, 1992 and each fiscal year thereafter so long as
the plan remains in effect, to each non-employee director who is serving as such
on the last day of the Company's fiscal year and who has served as such for at
least six months. The size of this annual grant is subject to adjustment in the
event of a stock dividend, stock split or similar transaction. The plan also
allows each non-employee director to elect to have any part or all of the fees
payable for services as a director of the Company and its subsidiaries paid in
shares of Common Stock.
The plan is administered by the Company's Board of Directors, whose members
are normally elected to three-year terms by the Shareholders. Although the plan
has no fixed duration, the Board of Directors or the Shareholders of the Company
may terminate the plan. The Board of Directors of the Company may also amend the
plan from time to time. However, Shareholder approval is required for any
amendment that materially increases the benefits accruing to participants in the
plan, materially increases the number of shares of Common Stock which may be
issued under the plan or materially modifies eligibility requirements. A
proposal to amend the plan is described more fully in Section 2 of the Proxy
Statement. The number of shares issued under this plan for fiscal year 1995 was
3,829.
Pursuant to the Director Fees Deferral Plan, members of the Board of
Directors who are not employees of the Company may elect to defer all or part of
their fees for services as a director. By written election delivered prior to
the end of a calendar year, a director may elect to defer the receipt of fees
payable in the following calendar year. Once made, the deferral election will
renew automatically from year to year unless revoked or changed by the filing of
a new election. The amount of any deferred fees are credited to an account on
the books of the Company on the date on which the fees would have first become
payable to the director. At the end of each calendar quarter until all deferred
amounts are distributed, the daily balance in a director's account will be
credited with interest based on the prime rate quoted at the beginning of the
quarter by AmSouth Bank of Alabama,
7
<PAGE> 11
Birmingham, Alabama. A director may not defer fees past age 75, but he may elect
to have fees paid in up to ten (10) annual installments beginning with age 75.
The amount deferred under this plan, including interest, during 1995 was
$21,266.
2. PROPOSAL TO AMEND THE ENERGEN CORPORATION
1992 DIRECTORS STOCK PLAN
The Board of Directors of the Company, pursuant to a resolution adopted on
November 22, 1995, adopted an amendment (the "Amendment") to the Energen
Corporation 1992 Directors Stock Plan (the "Directors Plan") for non-employee
directors of the Company and has directed submission thereof to the
Stockholders. The purpose of the Directors Plan is to enable the Company to pay
part of the compensation of its non-employee directors in shares of the
Company's Common Stock. The Directors Plan provides for annual grants of Common
Stock to each non-employee director and in addition allows each non-employee
director to elect to take all or a portion of such director's cash compensation
in the form of the Company's Common Stock. The proposed Amendment amends the
annual grant provisions of Section 3 of the Directors Plan.
The following summary of the principal features of the Directors Plan and
the proposed Amendment are in all respects subject to the specific provisions
contained in the Directors Plan and the Amendment, copies of which are set forth
as Appendices A and B, respectively, hereto.
SUMMARY OF DIRECTORS PLAN FEATURES
ELIGIBILITY. Only those members of the Company's Board of Directors who
are not officers or employees of the Company or its subsidiaries ("Non-Employee
Directors") are eligible to participate in the Directors Plan. There are
presently nine Non-Employee Directors on the Board of Directors. Two of such
Non-Employee Directors will retire from the Board during January, 1996.
ANNUAL GRANT. Each Non-Employee Director may elect to take any part or all
of the cash fees otherwise payable to such Non-Employee Director for his
services as a director of the Company and its subsidiaries in the form of Common
Stock. Such election and any subsequent change thereto must be in writing and
will become effective six months after delivery to the Company. Common Stock
issued in lieu of director fees will be issued following the end of each
calendar quarter and the number of shares will be based on a valuation equal to
the average of the closing sales price for the Common Stock on the last day of
each month in such calendar quarter; provided, that any fractional share shall
be rounded up to a whole share. Non-Employee Directors presently receive monthly
retainers of $1,000 and meeting fees of $1,000 for each Board or committee
meeting attended.
8
<PAGE> 12
AMENDMENT. Subject to certain timing and Stockholder approval requirements
set forth in the Directors Plan, the Directors Plan may be amended by the Board
of Directors.
TERM. The Directors Plan became effective upon its approval by the
Stockholders in January, 1992 and will remain in effect until terminated by
action of the Board of Directors or the Stockholders.
SUMMARY OF PROPOSED AMENDMENT
The proposed Amendment increases the size of the annual grant from 200
shares to 300 shares for each Non-Employee Director. The increase to 300 shares
takes effect with the grant payable following the close of the 1996 fiscal year.
In addition, a one-time grant of 100 shares per Non-Employee Director is payable
in February, 1996 to each Non-Employee Director serving as such on December 31,
1995. Thus, each Non-Employee Director who was entitled to a 200-share grant in
October, 1995 will be entitled to an additional 100 shares in February, 1996
including Messrs. Saunders and Taylor whose retirement from the Board of
Directors will be effective during January, 1996. Mr. Luthy, who was elected to
the Board of Directors in October, 1995, will also be eligible for the 100-share
grant to be paid in February, 1996. The Amendment is intended to allow the
Company to remain competitive in its compensation package for Non-Employee
Directors and to increase the percentage of that package which is paid in
Company stock.
The following table provides a summary estimate of the additional amounts
which will be allocated under the Plan if the proposed Amendment is adopted.
ADDITIONAL PLAN BENEFITS
<TABLE>
<CAPTION>
AMENDMENT TO ENERGEN CORPORATION
1992 DIRECTORS STOCK PLAN
----------------------------------------
NAME AND POSITION DOLLAR VALUE $(1) NUMBER OF UNITS(1)
- ------------------------------------------- ----------------- ------------------
<S> <C> <C>
Executive Group............................ -- --
Non-Executive Director Group
February, 1996........................ $20,700 900
Each October commencing
October, 1996(2).................... $18,400 800
Non-Executive Officer Employee Group....... -- --
</TABLE>
- ---------------
(1) Assumes nine directors eligible for February 1996 grant; eight directors
eligible for October, 1996 and subsequent grants; and a stock value of $23
per share.
(2) If the plan is amended as described herein, and assuming a stock value of
$23 per share and the current number of non-executive directors, the total
amounts awarded to the non-executive director group each October commencing
October, 1996, will be $55,200 and 2,400 shares.
9
<PAGE> 13
RECOMMENDATION
The vote of the holders of a majority of the outstanding shares of the
Company's Common Stock is necessary to approve adoption of the Amendment. The
Board of Directors recommends that Stockholders vote FOR the approval of the
Amendment.
It is intended that the persons designated as proxies on the accompanying
form of proxy will vote such proxy, if not otherwise directed, FOR the approval
of the Amendment.
10
<PAGE> 14
SUMMARY OF SECURITY OWNERSHIP OF MANAGEMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN PARTICIPANTS
The following table shows the shares of Common Stock of the Company
("Common Stock") beneficially owned by each nominee for director or director, by
each executive officer of the Company named in the Summary Compensation Table,
and by all directors and executive officers of the Company (including certain
executive officers of the Company's subsidiaries) as a group and by participants
in the Energen Corporation Employee Savings Plan as a group, as of December 6,
1995. Except as noted below, each such individual has sole voting power and sole
investment power with respect to such shares.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL NUMBER OF PERCENT
OR PERSONS IN GROUP SHARES(1) OF CLASS
--------------------------------------------- --------- --------
<S> <C> <C>
Stephen D. Ban............................... 2,776 *
J. Mason Davis, Jr........................... 1,778 *
James S. M. French........................... 9,800 *
Wallace L. Luthy............................. 1,000 *
Rex J. Lysinger.............................. 94,583 *
Geoffrey C. Ketcham.......................... 13,723 *
Judy M. Merritt.............................. 511 *
Drayton Nabers, Jr........................... 8,602 *
Dudley C. Reynolds........................... 12,180 *
Harris Saunders, Jr.......................... 19,631 *
George S. Shirley............................ 2,781 *
W. Robbins Taylor............................ 3,585 *
Wm. Michael Warren, Jr....................... 66,393 *
Gary C. Youngblood........................... 18,866 *
All directors and executive officers (15
persons)................................... 276,188 2.5 %
Energen Corporation Employee Savings
Plan(2).................................... 1,223,199 11.14%
</TABLE>
- ------------
* Less than one percent.
(1) The shares of Common Stock shown above include shares owned by wives and
children of directors as to which shares the directors disclaim any
interest. Dunn Investment Company, of which Mr. French is President, Chief
Executive Officer and a director, owns 60,000 shares of Common Stock and
the Profit Sharing Trust of Standard/Taylor Industries, Inc., of which Mr.
Taylor is President and Chairman of the Board, owns 5,000 shares of Common
Stock, which shares are not included in the totals noted above. The shares
of Common Stock shown above for Messrs. Lysinger, Warren, Ketcham,
Reynolds, Youngblood and the executive officers of the Company include
shares which are held for their respective accounts under the Energen
11
<PAGE> 15
Corporation Employee Savings Plan and the Restricted Stock Incentive Plan,
described in the Executive Compensation section. Messrs. Lysinger, Warren,
Ketcham, Reynolds, Youngblood and all executive officers as a group hold
presently exercisable options to acquire 51,958, 29,048, 2,950, 1,250,
1,850, and 95,656 shares of Common Stock, respectively, which amounts are
included in the above table.
(2) The Energen Corporation Employee Savings Plan is a qualified voluntary
contributory retirement plan, with an employee stock ownership feature. The
Vanguard Group, Inc. serves as trustee for the Plan and must vote the
shares held by the plan in accordance with individual participant
instructions. Both current and retired employees of the Company are
participants in the Plan.
1995 COMPENSATION COMMITTEE REPORT
The Officers Review Committee (ORC) of the Board of Directors is comprised
entirely of outside Directors. The ORC is responsible for overseeing and
administering the Company's executive compensation program.
COMPENSATION POLICY
The executive compensation program of the Company is reviewed annually by
the ORC and is designed to serve the interests of the Company and its
shareholders by aligning executive compensation with shareholder objectives and
to encourage and reward management initiatives that will benefit the Company
itself, its shareholders, its customers, and its employees over the long term.
Specifically, the executive compensation program seeks to:
(i) implement compensation practices which allow the Company to
attract and retain highly qualified executives and maintain a competitive
position in the executive marketplace with employers of comparable size and
in similar lines of business;
(ii) enhance the compensation potential of executives who are in the
best position to contribute to the development and success of the Company
by providing the flexibility to compensate for individual contributions to
superior corporate performance as measured by specific objectives compared
against a peer group; and
(iii) directly align the interests of executives with the long-term
interests of stockholders through compensation opportunities in the form of
integrated short- and long-term incentive plans the payouts of which are
predominantly in the form of Common Stock.
These objectives are met through a program comprised of salary annual cash
incentive awards, and long-term stock and performance share opportunities which
are dependent on meeting or exceeding carefully defined corporate, subsidiary
and individual objectives.
12
<PAGE> 16
SALARY. As a matter of policy, the ORC administers annual salary levels
relative to the competitive marketplace as determined through the use of
available compensation surveys. Each year the ORC reviews the issue of
competitive pay and adjusts salary structures accordingly with the midpoint of
each pay range approximating the average of the market. The ORC then considers
salary adjustments for the Company's executive officers, including those named
in the Summary Compensation Table. Salary adjustments are designed to reflect
consideration of the performance of each executive over the prior compensation
period, recognition of individual contributions to overall Company performance,
internal comparability considerations, as appropriate, and the executive's
placement in the salary range.
ANNUAL INCENTIVES. Executives are eligible each year for cash incentive
awards based upon attaining financial and non-financial objectives relative to
pre-established performance targets. Incentive awards, if made, are based upon
the successful attainment of objective corporate performance criteria (expressed
in terms of such criteria as return on equity, net income, market yield,
customer service, productivity, finding costs and reserve additions) and, where
appropriate, subsidiary performance, as well as defined individual performance
criteria. Assuming corporate, subsidiary and individual objectives are met, the
incentive award is based upon a percentage of the salary earned by the
participant during the performance year. Distributions are made in cash provided
that certain officers may elect, subject to approval of the ORC, to receive part
or all of an award in the form of options issued under the Company's Stock
Option Plan.
LONG-TERM INCENTIVE COMPENSATION. Currently the Company has in place a
Performance Share Plan and a Stock Option Plan. By its terms, the Company's
Restricted Stock Incentive Plan terminated on January 31, 1994, subject to
outstanding award agreements. The Performance Share Plan and Stock Option Plan
may be used separately or in combination with one another at the discretion of
the ORC. As a matter of policy, however, the ORC is now using the Performance
Share Plan as the primary vehicle to deliver long-term incentives. The purpose
of the Performance Share Plan and the Stock Option Plan is to provide executive
and key employees an opportunity to participate in the long-term economic growth
and performance of the Company.
1992 LONG-RANGE PERFORMANCE SHARE PLAN. An award of Performance Shares
entitles a participant to be paid the equivalent of one share of Common Stock
for each Performance Share awarded to a participant if the ORC has determined
that all conditions of payment, which are known as performance condition
guidelines, have been satisfied at the end of the four-year period that
commences on the first day of the fiscal year in which an award is granted (the
"Award Period") or at the end of a one, two, or three-year period within the
Award Period (the "Interim Period"). The ORC may, in its discretion, alter or
13
<PAGE> 17
amend performance condition guidelines prior to granting any new awards and may
pay a participant in cash, shares of Common Stock or a combination of both.
According to the performance condition guidelines that have been adopted by
the ORC and are currently in effect under the plan, payment of an award will be
based on the Company's percentile ranking among a comparison group of forty
companies as measured for the applicable Award or Interim Period. The payout
percentage for one-half of the award will be based on the Company's percentile
ranking with respect to total shareholder return, which is based on dividends
paid and changes in the market price of a company's common stock over a period
of time. The payout percentage for the other one-half of the award will be based
on the Company's percentile ranking with respect to Average ROE, which is based
on a company's average annual reported income or loss before extraordinary items
over average shareholders' equity. Subject to the discretion of the ORC to
adjust for extenuating circumstances, the payout percentage measured separately
for each one-half of the award will be 100% if the Company ranks at or above the
75th percentile, 50% at the 50th percentile and 0% below the 50th percentile
with interpolation between the 50th and 75th percentiles.
1988 STOCK OPTION PLAN. The Stock Option Plan provides for the grant of
incentive stock options, non-qualified stock options, stock appreciation rights
and dividend equivalents or a combination thereof to officers and key employees,
all as determined by the ORC. If an option includes stock appreciation rights
("SARs"), then the optionee may elect to cancel all or any portion of the option
then subject to exercise, in which event the Company's obligation in respect of
such option may be discharged by payment of an amount in cash equal to the
excess, if any, of the fair market value of the shares of Common Stock subject
to such cancellation over the option exercise price for such shares. If the
exercised option includes dividend equivalents, the optionee will in addition to
the shares of Common Stock purchased upon exercise receive additional
consideration in an amount equal to the amount of cash dividends which would
have been paid on such shares had they been issued and outstanding during the
period commencing with the option grant date and ending on the option exercise
date, plus an amount equal to the interest that such dividends would have earned
from the respective dividend payment dates if deposited in an account bearing
interest compounded quarterly at the announced prime rate of AmSouth Bank of
Alabama in effect on the first day of the respective quarter.
OPERATING SUMMARY
As demonstrated in each of the plan descriptions provided, compensation in
all its forms is linked directly to objective performance criteria of both the
Company, subsidiaries where applicable, and the individual executive's
performance. By doing so, the ORC has created an environment which encourages
long-term decisions which will benefit the
14
<PAGE> 18
Company, its shareholders, customers, and employees and at the same time allow
those executives, managers, and other key employees within the Company to share
in the success of those decisions and actions.
ISSUES INFLUENCING COMPENSATION DECISIONS DURING THE REPORTING YEAR (OCTOBER 1,
1994 TO SEPTEMBER 30, 1995)
Energen enjoyed a very successful year October 1, 1994 through September
30, 1995. Earnings of $19.3 million were achieved from current year operations
equal to $1.77 per share. Energen was able to increase its cash dividend 3.6% to
$1.16. These successes were made possible by similar successes in major
corporate subsidiaries. Energen's actual performance against a comparison group
of peer companies was at the 78th percentile for the year. As such, the ORC
funded the incentive program and increased salaries as appropriate. Awards under
the Long-Range Performance Share Plan were made in accordance with plan
guidelines.
Actual CEO compensation action taken included adjusting base salary to
$343,394 reflecting both market competitive salary levels and actual individual
performance during the 1994-95 performance year. An incentive award payable
$150,000 in cash together with the grant of 7,000 stock options with dividend
equivalents was earned for the 1994-95 reporting year reflecting the performance
of the Company, its subsidiaries and of the incumbent himself in achieving the
financial and business results of the Company. Performance share awards were
made using the same multiples as in the previous year as set forth in the ORC's
Policy Statement supporting the Plan. Awards are a function of an executive's
position in the Company. Actual payout is totally dependent on obtaining
performance levels in accordance with previously described guidelines.
The Officers Review Committee: George S. Shirley, Chairman
J. Mason Davis, Jr.
Drayton Nabers, Jr.
W. Robbins Taylor
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Davis, a member of the Officers Review and Finance Committees, is a
partner in the law firm of Sirote & Permutt in Birmingham, Alabama, which
provides certain legal services to the Company. The Company's payments for such
legal services to Sirote & Permutt during fiscal year 1995 totaled approximately
$87,600 in fees and expenses. In the opinion of management, all such fees paid
to the firm were reasonable and were the same as those which would have been
charged by an unaffiliated third party for comparable services.
15
<PAGE> 19
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid in
fiscal year 1995 and the two prior fiscal years to the Company's Chief Executive
Officer and the Company's four other most highly compensated executive officers:
TABLE 1
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
AWARDS PAYOUTS
------------------------ ---------
ANNUAL COMPENSATION
-------------------------------------- RESTRICTED LONG-TERM
NAME AND INCENTIVE OTHER STOCK STOCK INCENTIVE ALL OTHER
PRINCIPAL SALARY COMPENSATION ANNUAL AWARD(S) OPTIONS/SAR PAYOUTS COMPENSATION
POSITION YEAR ($) ($) COMPENSATION ($)(1) (#) ($) ($)(2)
- -------------- ------- -------- ------------ ------------ ---------- ----------- --------- ------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- -------------- ------- -------- ------------ ------------ ---------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lysinger, Rex J. -- Chairman, and Chief Executive Officer
9/30/95 $343,394 $150,000 7,000 $186,073 $ 12,934
9/30/94 $328,083 $195,000 7,000 $ 12,436
9/30/93 $328,916 $172,000 -- -- -- -- $ 18,048
Warren, Jr., Wm. Michael -- President and Chief Operating Officer
9/30/95 $264,273 $110,000 3,000 $111,219 $ 9,870
9/30/94 $252,916 $150,000 3,500 $ 11,532
9/30/93 $246,333 $115,000 -- -- -- -- $ 12,578
Ketcham, Geoffrey C. -- Executive Vice President, Chief Financial Officer and Treasurer
9/30/95 $179,099 $ 85,700 $ 68,108 $ 9,339
9/30/94 $172,333 $113,400 $ 10,117
9/30/93 $177,500 $ 83,000 -- -- -- -- $ 9,357
Youngblood, Gary C. -- Executive Vice President and Chief Operating Officer of Alabama Gas Corporation
9/30/95 $138,231 $ 54,200 -- -- -- $ 35,989 $ 8,905
9/30/94 $124,583 $ 65,800 -- -- -- -- $ 8,097
9/30/93 $117,416 $ 37,300 -- -- -- -- $ 7,433
Reynolds, Dudley C. -- General Counsel and Secretary
9/30/95 $137,933 $ 48,900 $ 38,046 $ 7,211
9/30/94 $128,999 $ 66,000 $ 6,450
9/30/93 $126,666 $ 42,000 -- -- -- -- $ 6,166
</TABLE>
- ---------------
Note: Salaries for the fiscal year ended 9/30/93 reflected a thirteen (13) month
payroll due to a one-time change in pay periods for that year from the
first day of the month following service to the last day of the month of
service.
16
<PAGE> 20
NOTES TO TABLE 1
(1) If applicable, column (f) represents the fair market value as of the date of
award of shares of restricted Common Stock granted pursuant to the
Restricted Stock Incentive Plan of Energen Corporation ("RSIP") adopted by
the Board of Directors on October 20, 1983 and approved by the Shareholders
on January 19, 1984. By its terms, the Plan terminated on January 1, 1994,
subject to outstanding award agreements and no new awards were made in
fiscal 1994.
As of September 30, 1995, the following individuals had restricted stock
grants which have not yet been released:
<TABLE>
<CAPTION>
AGGREGATE SHARES DOLLAR VALUE
TO BE RELEASED BASED ON 09/30/95
(SUBJECT TO PERFORMANCE CLOSING PRICE
NAME ACHIEVEMENT) ($21.75)
------------------------------ ----------------------- -----------------
<S> <C> <C>
Lysinger, Rex J............... 0 0
Warren, Jr. Wm. Michael....... 2,240 $48,720
Ketcham, Geoffrey C........... 1,492 $32,451
Reynolds, Dudley C............ 1,373 $29,863
Youngblood, Gary C............ 688 $14,964
</TABLE>
The executives are entitled to the payment of dividends as they are declared
and paid and shares will vest under the plan over a six year period
beginning with the completion of three years from date of grant provided
specific defined corporate, subsidiary, and individual performance levels
are achieved. In addition to the above terms, the restricted stock
generally becomes immediately vested upon a change of control event.
(2) The amounts shown represent contributions made by the Company to its defined
contributions Plans on behalf of each executive officer.
17
<PAGE> 21
TABLE 2
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SARS AT FY-END OPTIONS/SARS AT FY-END
ON EXERCISE VALUE REALIZED (#)(2) (#)(3)
NAME (#) ($)(1) (d) (e)
------- ----------- -------------- --------------------------- ---------------------------
YEAR (a) (b) (c) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------- ------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995 Lysinger -- -- 44,958 0 $ 162,529 $ 0
1995 Warren -- -- 26,048 0 $ 91,196 $ 0
1995 Ketcham -- -- 2,950 0 $ 14,750 $ 0
1995 Reynolds -- -- 1,250 0 $ 6,250 $ 0
1995 Youngblood -- -- 1,850 0 $ 9,250 $ 0
</TABLE>
- ---------------
(1) Market value of underlying securities at time of exercise minus the exercise
price.
(2) In addition, on November 22, 1995, the Board granted Messrs. Lysinger and
Warren stock options for 7000 and 3000 shares, respectively, in partial
payment of their incentive awards for the 1994-95 performance year. These
options are immediately exercisable and have an exercise price of $22.125
per share.
(3) Market value of underlying securities at year-end market price (September
30, 1995) of $21.75 per share minus the exercise price.
TABLE 3
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
NUMBER OF SHARES OTHER PERIOD ------------------------------
UNITS OR UNTIL MAXIMUM
OTHER RIGHTS MATURATION OR THRESHOLD TARGET ($ OR
NAME (#) PAYOUT ($ OR #) ($ OR #) #)
--------------- ---------------- --------------- --------- -------- -------
YEAR (a) (b) (c) (d) (e) (f)
- --------------- --------------- ---------------- --------------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
1995 Lysinger 11,400 10/94 to 10/98 2,850 N/A 11,400
1995 Warren 6,800 10/94 to 10/98 1,700 N/A 6,800
1995 Ketcham 3,900 10/94 to 10/98 975 N/A 3,900
1995 Reynolds 1,250 10/94 to 10/98 313 N/A 1,250
1995 Youngblood 1,850 10/94 to 10/98 463 N/A 1,850
</TABLE>
NOTES TO TABLE 3
An award of Performance Shares entitles a participant to be paid the
equivalent of one share of Common Stock for each Performance Share awarded to a
participant if the Officer Review Committee (ORC) has determined that all
conditions of payment, which are known as performance condition guidelines, have
been satisfied at the end of the four-year period that commences on the first
day of the fiscal year in which an award is granted (the "Award Period") or, if
applicable, at the end of a one, two, or three-year period within the
18
<PAGE> 22
Award Period (the "Interim Period"). The ORC may, in its discretion, alter or
amend performance condition guidelines prior to granting any new awards and may
pay a participant in cash, shares of Common Stock or a combination of both.
According to the performance condition guidelines that have been adopted by
the ORC and are currently in effect under the plan, payment of an award will be
based on the Company's percentile ranking among a comparison group of forty
companies as measured for the applicable Award or Interim Period. The payout
percentage for one-half of the award will be based on the Company's percentile
ranking with respect to Total Shareholder Return, which is based on dividends
paid and changes in the market price of a company's common stock over a period
of time. The payout percentage for the other one-half of the award will be based
on the Company's percentile ranking with respect to Average ROE, which is based
on a company's average annual reported income or loss before extraordinary items
over average shareholders' equity.
Subject to the discretion of the ORC to adjust for extenuating
circumstances, the payout percentage measured separately for each one-half of
the award will be 100% if the Company ranks at or above the 75th percentile, 50%
at the 50th percentile and 0% below the 50th percentile with interpolation
between the 50th and 75th percentiles. Since the payout percentage is calculated
separately for each one-half of the award, if the Company ranks at the 50th
percentile for one performance condition but ranks below the 50th percentile for
the other performance condition, then the payout amount will be 50% of one-half
of the award or 25% of the total award (the "threshold" payout). See column d.
If the Company ranks at the 75th percentile with respect to each performance
condition, then the payout amount will be 100% of each one-half of the award or
100% of the total award (the "maximum payout"). See column f.
A participant will forfeit any unpaid portion of the award if employment
with the Company terminates for any reason other than death, permanent and total
disability, the Company's divestiture of a business segment or reduction in work
force size, or the participant's retirement on or after the participant's early
retirement date determined under the Energen Corporation Retirement Income Plan.
A participant whose employment with the Company terminates as a result of death,
permanent and total disability, the Company's divestiture of a business segment
or reduction in work force size, or retirement as described above, will be paid
as promptly as possible a prorata portion of the award based on conditions
existing at the time of termination and as determined by the ORC. Upon a change
in control of the Company, all outstanding awards will be paid as soon as
practical after the date of such change of control and any performance
conditions will be measured as of the last day of the most recently ended fiscal
quarter.
19
<PAGE> 23
RETIREMENT INCOME PLAN
Officers of the Company are covered by the Energen Corporation Retirement
Income Plan, a defined benefit plan covering substantially all employees of the
Company. The amount of contributions made by the Company to the plan is not
reflected in the Compensation Table, since the amount of the contribution with
respect to a specified person is not and cannot readily be separately or
individually calculated by the regular actuaries for the plan.
Benefits under the plan are based on years of service at retirement and on
"Final Earnings," the average base compensation for the highest sixty
consecutive months out of the final 120 months of employment. (This compensation
consists only of base salary and excludes remuneration in the form of
contributions to other benefit plans or any other form of compensation such as
any compensation received under the Annual Incentive Compensation Plan or
Restricted Stock Incentive Plan.) Normal or delayed retirement benefits are
payable upon retirement on the first day of any month following attainment of
age 65 and continuing for life, subject to an annual cost-of-living increase of
up to three percent.
The Company has entered into retirement supplement agreements (Supplemental
Agreements) with certain officers. Generally, each such agreement provides that
the employee will receive, upon normal retirement (which under the Supplemental
Agreement is defined as retirement on the first day of any month following
attainment of age 60), a supplemental retirement benefit equal to the difference
between 60% of the employee's compensation determined as of the employee's
normal retirement date and the employee's normal retirement benefit (including
social security benefit). For purposes of the Supplemental Agreements
compensation is determined based on a formula taking into account the average of
the highest 36 months of base salary during the five years prior to retirement
plus the average of the three highest annual incentive awards for the five full
fiscal years preceding the earlier of retirement or the officer's 61st birthday.
The following table presents estimated annual benefits payable from both
the plan and the supplemental agreements upon normal or delayed retirement to
persons in specified compensation and years-of-service classifications. Benefits
payable to an employee under the plan are subject to limits imposed by Section
415 of the Internal Revenue Code. As of September 30, 1995, no employees of the
Company would have been entitled to payments
20
<PAGE> 24
for benefits in excess of the Section 415 limits. The amounts shown are subject
to deduction for applicable Social Security benefits at age 62.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40
- ------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$125,000........... $ 61,875 $ 82,500 $ 82,500 $ 82,500 $ 82,500 $ 82,500
$150,000........... $ 74,250 $ 99,000 $ 99,000 $ 99,000 $ 99,000 $ 99,000
$175,000........... $ 86,625 $115,500 $115,500 $115,500 $115,500 $115,500
$200,000........... $ 99,000 $132,000 $132,000 $132,000 $132,000 $132,000
$225,000........... $111,375 $148,500 $148,500 $148,500 $148,500 $148,500
$250,000........... $123,750 $165,000 $165,000 $165,000 $165,000 $165,000
$300,000........... $148,500 $198,000 $198,000 $198,000 $198,000 $198,000
$400,000........... $198,000 $264,000 $264,000 $264,000 $264,000 $264,000
$450,000........... $222,750 $297,000 $297,000 $297,000 $297,000 $297,000
$500,000........... $247,500 $330,000 $330,000 $330,000 $330,000 $330,000
</TABLE>
The amount of base compensation and the years of service credited under the
plan for individuals shown in the Compensation Table are as follows: Mr.
Lysinger, $342,000, 20 years; Mr. Warren, $264,000, 12 years; Mr. Ketcham,
$179,000, 14 years; Mr. Reynolds $138,000, 15 years; and Mr. Youngblood
$138,000, 26 years.
SEVERANCE COMPENSATION AGREEMENTS
The Company has entered into severance compensation agreements with Messrs.
Lysinger, Warren and Ketcham. Generally, each such agreement provides that if
within thirty-six months following a change-in-control of the Company, the
employee's employment is terminated by the employee for good reason or by the
Company other than for cause, disability, retirement or death, then the Company
shall make a lump sum payment to the employee equal to 200% of the employee's
annual base salary in effect immediately prior to the change-in-control, plus
200% of the employee's average additional cash compensation for the two fiscal
years immediately prior to the fiscal year during which the change-in-control
occurs. The agreement also provides for the continuance of certain insurance and
other employee benefits for a period of twenty-four months following any such
termination of employment. For purposes of the agreements, (i) the term "cause"
generally means dereliction of duty, misconduct injurious to the Company, or
conviction of a felony, and (ii) the term "good reason" generally means a
reduction in the position, duties, responsibilities, status or benefits of the
employee's job.
21
<PAGE> 25
PERFORMANCE GRAPH
ENERGEN CORPORATION -- COMPARISON OF FIVE-YEAR
CUMULATIVE SHAREHOLDER RETURNS
[GRAPH]
<TABLE>
<CAPTION>
40 COMPANY
MEASUREMENT PERIOD ENERGEN COR- PEER GROUP
(FISCAL YEAR COVERED) PORATION S&P 500 INDEX INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 106 131 101
1992 112 146 110
1993 161 165 140
1994 154 171 117
1995 157 221 133
</TABLE>
Note: Total shareholder return includes reinvested dividends.
The forty companies in the peer group index noted above are as follows:
Nor-Am Energy Corporation (formerly Arkla, Inc.), Atlanta Gas Light Company,
Atmos Energy Corporation, Bay State Gas Company, Brooklyn Union Gas, Cascade
Natural Gas Corp., Colonial Gas Company, Connecticut Energy Corporation,
Connecticut Natural Gas Corp., Consolidated Natural Gas Company, Eastern
Enterprises, Enserch Corporation, Equitable Resources, Inc., Indiana Energy,
Inc., KN Energy Inc., Laclede Gas Company, MCN Corporation, National Fuel Gas
Company, New Jersey Resources Corp., Nicor Inc., North Carolina Natural Gas
Corp., Northwest Natural Gas Company, NUI Corporation, Oneok Inc., Pacific
Enterprises, Pennsylvania Enterprises, Inc., Peoples Energy Corporation,
Piedmont Natural Gas Co., Inc., Providence Energy Corporation, Public Service of
North Carolina Inc. Questar Corporation, South Jersey Industries, Inc.,
Southeastern Michigan Gas Enterprises, Inc., Southwest Gas Corporation,
Southwestern Energy Company, UGI Corporation, United Cities Gas Company,
Washington Energy Company, Washington Gas Light Company and Wicor, Inc.
22
<PAGE> 26
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand examined the financial statements of the
Company for the fiscal year ended September 30, 1995, and the Board of Directors
intends to continue the services of this firm for the fiscal year ending
September 30, 1996. A representative of Coopers & Lybrand will be present at the
Annual Meeting and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of Shareholders intended for inclusion in next year's proxy
statement must be received by the Company no later than August 23, 1996.
GENERAL INFORMATION
Shareholders of record at the close of business on December 6, 1995 are
entitled to vote upon all matters at the Annual Meeting. As of the close of
business on December 6, 1995 there were outstanding 10,978,695 shares of Common
Stock, each share of which is entitled to one vote on all matters to be
considered at the Annual Meeting.
Pursuant to Section 10-2B-2.25 of the Code of Alabama 1975, as amended, and
the Company's bylaws, a majority of the Common Stock shares entitled to vote,
represented in person or by proxy, will constitute a quorum at a meeting of the
Shareholders. Section 10-2B-7.28 of the Code of Alabama 1975, as amended,
requires that each of the nominees to be elected to the Board of Directors,
receive the affirmative vote of the majority of the votes cast by the holders of
shares of Common Stock represented at the Annual Meeting as part of the quorum.
Section 10-2B-7.25 of the Code of Alabama 1975, as amended, requires, for the
approval of the proposed amendment for the Directors Plan, the affirmative vote
of the holders of a majority of the outstanding shares of the Company's common
stock casting votes for or against approval of the proposed amendment to the
Directors Plan at a meeting of shareholders at which a quorum is present. In
neither the case of the election of directors nor consideration of the proposed
amendment to the Directors Plan does the vote include shares which abstain from
voting on a matter or which are not voted on such matter by a nominee because
such nominee is not permitted to exercise discretionary voting authority and the
nominee has not received voting instructions from the beneficial owner of such
shares. Generally, brokers who act as nominees will be permitted to exercise
discretionary voting authority where they have received no instructions in
uncontested elections for directors where the brokers have complied with Rule
451 concerning the delivery of proxy materials to beneficial owners of the
Company's Common Stock held by such brokers.
23
<PAGE> 27
In case any person named herein for election as a director is not available
when the election occurs, proxies in the accompanying form may be voted for a
substitute as well as for the other persons named herein.
So far as the Board of Directors of the Company now knows, no business
other than that referred to above will be acted upon at the Annual Meeting. The
persons named in the Board of Directors' proxy may, in the absence of
instruction to the contrary, vote upon all matters presented for action at the
Annual Meeting according to their best judgment.
The costs of soliciting proxies on behalf of the Board of Directors will be
borne by the Company. In addition to the use of the mails, proxies may be
solicited by personal interview or by telephone and telegraph. Brokerage houses
and other custodians and fiduciaries will be requested to forward at the
Company's expense soliciting materials to the beneficial owners of stock held of
record by them. The Company has also engaged Georgeson & Co. of New York to
assist in the solicitation of proxies of brokers and financial institutions and
their nominees. This firm will be paid a fee of $7,000, including out-of-pocket
expenses.
ENERGEN CORPORATION
/s/ Rex J. Lysinger
---------------------------
Chairman of the Board
and Chief Executive Officer
Birmingham, Alabama
December 21, 1995
24
<PAGE> 28
APPENDIX A
ENERGEN CORPORATION
1992 DIRECTORS STOCK PLAN
1. PURPOSE
This Energen Corporation 1992 Directors Stock Plan (the "Plan") is hereby
established by Energen Corporation (the "Company"). The purpose of the Plan is
to enable the Company to pay part of the compensation of its non-employee
directors in shares of the Company's common stock ("Stock"). The Plan provides
annual grants of Stock to non-employee directors and in addition permits such
directors to elect to take all or part of their cash compensation in the form of
Stock.
2. ELIGIBILITY
Each member of the Board of Directors of the Company (the "Board") who is
not an officer or Employee of the Company or any of its subsidiaries (a
"Non-Employee Director") shall be eligible for participation in the Plan.
3. ANNUAL GRANTS
As soon as reasonably practicable following the fiscal year ended September
30, 1992 and each fiscal year thereafter so long as this Plan remains in effect,
200 shares (adjusted as described below) of Stock shall be granted and issued to
each Non-Employee Director who is serving as such on the last day of such year
and has held such position for at least six months. If the Company shall at any
time issue any shares of Stock (i) in subdivision of outstanding shares of
Stock, by reclassification or otherwise, or (ii) for a stock dividend, the size
of the 200 share installment shall be increased proportionately; and in like
manner, reduced proportionately in case of any combination of shares of Stock.
4. ELECTIVE GRANTS
Each Non-Employee Director may elect to have any part or all of the fees
payable to such Non-Employee Director for services as a director of the Company
and its subsidiaries paid in the form of Stock. Such election shall be delivered
to the Company in writing specifying the portion of fees to be paid in Stock.
Any such election shall remain in effect and irrevocable until the effective
date of a subsequent written election changing or terminating the prior
election. The effective date of any election, including without limitation an
election to change or terminate a prior election, shall be six months from the
date of delivery to the Company. Stock issued in lieu of director fees shall be
issued as soon as reasonably practicable following the end of each calendar
quarter and the number of
A-1
<PAGE> 29
shares will be based on a valuation equal to the average of the closing sales
prices for the Stock as published in The Wall Street Journal report of the New
York Stock Exchange, Inc. -- Composite Transactions for the last trading day of
each month in such calendar quarter, provided that any fractional share shall be
rounded up to a whole share.
5. STOCK ISSUANCE
Non-Employee Directors shall not be deemed for any purpose to be, or have
any rights as, stockholders of the Company with respect to any Stock issued
under this Plan except if, as and when shares are issued and then only from the
date of the certificates therefor.
6. AMENDMENT AND DISCONTINUANCES
The Board of Directors may from time to time amend the Plan; provided,
however, that no amendment may without stockholder approval materially increase
the benefits accruing to participants under the Plan, materially increase the
number of shares of Common Stock which may be issued under the Plan, or
materially modify the requirements as to eligibility for participation in the
Plan, and further provided, that the Plan shall not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code, the Employee Retirement income Act, or the rules thereunder.
7. COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS
No certificate for shares distributable pursuant to the Plan shall be
issued and delivered unless the issuance of such certificate complies with all
applicable legal requirements, including, without limitation, compliance with
the provisions of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the requirements of the exchanges on which
Stock may, at the time, be listed.
8. TERM OF THE PLAN
The Plan is subject to and shall only become effective upon approval of the
Plan by the stockholders of the Company at the Annual Meeting of Stockholders to
be held January 22, 1992. Once effective this Plan shall remain in effect until
terminated by action of the Board or the stockholders of the Company.
A-2
<PAGE> 30
APPENDIX B
PROPOSED AMENDED SECTION 3
OF
ENERGEN CORPORATION
1992 DIRECTORS STOCK PLAN
Section 3 of the Energen Corporation 1992 Directors Stock Plan is hereby
amended to read in its entirety as follows:
ANNUAL GRANTS
As soon as reasonably practicable following the fiscal year ended September
30, 1992 and each fiscal year thereafter so long as this Plan remains in effect,
an annual award of Stock (adjusted as described below) shall be granted and
issued to each Non-Employee Director who is serving as such on the last day of
such year and has held such position for at least six months. The annual award
payable at the conclusion of fiscal years ended September 30, 1992-1995 shall be
200 shares. The annual award payable with respect to fiscal years ended
September 30, 1996 and thereafter, shall be 300 shares. If the Company shall at
any time issue any shares of Stock (i) in subdivision of outstanding shares of
Stock, by reclassification or otherwise, or (ii) for a stock dividend, the size
of future annual awards shall be increased proportionately; and in like manner,
reduced proportionately in case of any combination of shares of Stock. In
addition to the foregoing annual awards, a supplemental award of 100 shares
shall be made during February, 1996 to each individual who was serving as a
Non-Employee Director on December 31, 1995, regardless of length of service.
B-1
<PAGE> 31
ENERGEN
2101 Sixth Avenue North
Birmingham, Alabama 35203
(205) 326-2700
- ---------------------------------------------------
ENERGEN CORPORATION
NOTICE OF THE ANNUAL
MEETING OF SHAREHOLDERS
JANUARY 25, 1995
AND
PROXY STATEMENT
- ---------------------------------------------------
IMPORTANT
-- Please sign and return your proxy in the enclosed envelope
-- In this way you will be represented at the meeting
-- If you attend the meeting you may, if you wish, withdraw your proxy and
vote in person
- ---------------------------------------------------
<PAGE> 32
APPENDIX C
PROXY -- ENERGEN CORPORATION
PROXY FOR COMMON SHAREHOLDERS FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 24, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ENERGEN CORPORATION
The undersigned, revoking all proxies heretofore given with respect to the
shares represented hereby, hereby appoints REX J. LYSINGER and DUDLEY C.
REYNOLDS, or either of them acting in the absence of the other, with full power
of substitution, proxies to represent the undersigned at the Annual Meeting of
Shareholders of Energen Corporation, to be held on January 24, 1996 at 10:00
a.m., Central Standard Time, at the principal office of the Company in
Birmingham, Alabama, and at any adjournments thereof, respecting the shares of
Common Stock which the undersigned would be entitled to vote if then personally
present, as follows:
This proxy should be mailed in the enclosed addressed envelope (no postage
required if mailed in the United States). To assure the necessary representation
at the Meeting, please date and sign this proxy and mail it to the Company
promptly. Please mail your proxy to the Company even though you plan to attend
the Meeting. If you vote in person at the Meeting, your Proxy will not be used.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
ENERGEN CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [/]
[ ]
<TABLE>
<CAPTION>
FOR all VOTE
nominees listed WITHHELD
(except as from all
indicated below) nominees FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS: [ ] [ ] 2. Amendment to the Energen Corporation [ ] [ ] [ ]
Nominees--For three year term ending 1999: 1992 Directors Stock Plan as described
J. Mason Davis, Jr., James S.M. French and in the Proxy Statement of the Company
Wallace L. Luthy. dated December 21, 1995.
(To withhold authority to vote for any 3. In their discretion, to vote upon Such other matters as may
individual nominee, write that nominee's properly come before the Meeting. All as more fully set
name in the space provided below.) forth in the Proxy Statement received by the undersigned.
(THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC
_____________________________________________ INDICATION ABOVE. IN THE ABSENCE OF SUCH INDICATION, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AND
FOR THE APPROVAL OF THE AMENDMENT TO THE DIRECTORS STOCK
PLAN.)
DATED_________________________________________, 19__
SIGNED______________________________________________
____________________________________________________
(Please sign exactly as name appears below.)
</TABLE>
