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PROSPECTUS
FILED PURSUANT TO
RULE 424(b)(3)
FILE NO. 33-48504
April 29, 1997
ENERGEN CORPORATION
1992 LONG-RANGE PERFORMANCE SHARE PLAN
This document constitutes part of a prospectus covering securities
that have been registered under the Securities Act of 1933.
Shares of the common stock, par value $.01 per share, of Energen
Corporation ("Energen Common Stock"), issuable pursuant to the 1992 Long-Range
Performance Share Plan (the "Plan") are hereby offered to certain employees of
Energen Corporation ("Energen") and its subsidiaries.
Neither the delivery of this Prospectus nor any sales hereunder shall
under any circumstances create any implication that there has been no change in
the affairs of Energen or the Plan since the date hereof or that the
information contained here is correct as of any time subsequent to the date
hereof.
THE PLAN
The following highlights of the Plan are intended only as a summary of
its more important provisions and are not complete. Accordingly, each employee
is urged to study the text of the Plan document, copies of which are available
from Energen. Participants may obtain additional information about the Plan
and its administrators by contacting Energen at 2101 Sixth Avenue North,
Birmingham, Alabama 35203, telephone (205)326-2700.
GENERAL NATURE AND PURPOSES OF THE PLAN
The purpose of the Plan is to further the long-term growth in
profitability of Energen by offering long-term incentives in addition to
current compensation to those key executives who will be largely responsible
for such growth. Specifically, participants in the Plan will be persons
(including officers and directors) who are employed by Energen on a full-time
salaried basis and who, on the basis of such person's opportunity to influence
Energen's long-term profitability, are selected by the Officers Review
Committee of Energen's Board of Directors (the "Committee"), or in some cases,
Energen's chief executive officer, to receive an award ("Award") of equivalent
shares of Energen Common Stock ("Performance Shares"). Committee members are
not eligible to participate in the Plan. In accordance with the terms of the
Plan, no more than 500,000 Performance Shares may be awarded, and as payment
for such Performance Shares, Energen has authorized 350,000 shares of Energen
Common Stock for issuance under the Plan.
The Plan is administered by the Committee, which has exclusive authority to
select who may participate in the Plan, to determine the Award to be made to
each participant, and to determine the conditions upon which the Award may
become payable to the participant. The expenses of administering the Plan are
to be borne by Energen. Only the Committee may make awards to any employee who
is an "officer" within the meaning of Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any Energen employee
who has an officer title. The Committee may delegate to Energen's chief
executive officer the authority to make Awards to Energen employees who are not
officers after authorizing an aggregate number of Performance Shares to be
awarded to all such employees. The Committee has the power to administer
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and interpret the Plan and to adopt rules and regulations concerning the Plan.
The Committee's interpretation and construction of the Plan is conclusive and
binding on Energen and the Plan's participants.
An Award of Performance Shares, which must be in writing and must set
forth the terms and conditions upon which payment will be made to the
participant, entitles a participant to be paid the equivalent of one share of
Energen Common Stock for each Performance Share awarded to a participant if the
Committee has determined that all conditions to payment have been satisfied at
the end of a 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").
According to the performance condition guidelines that have been adopted by the
Committee and are currently in effect under the Plan, payment of an Award will
be based on Energen's percentile ranking among a comparison group of forty
companies.
A participant will become entitled to payment of one-half of an Award
at the end of a Award Period or at the end of an Interim Period if Energen
ranks in the seventy-fifth percentile or better 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. A participant will
become entitled to payment of the other one-half of an Award if Energen ranks
in the seventy-fifth percentile or better 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. A participant will
become entitled to payment of fifty percent of each one-half payment if Energen
ranks at the fiftieth percentile in Total Shareholder Return and Average ROE.
A ranking between the fiftieth and seventy-fifth percentiles for Total
Shareholder Return and Average ROE will entitle a participant to a properly
interpolated payment of fifty to one hundred percent of each one-half of an
Award. A participant will not be entitled to payment on either one-half of an
Award if Energen ranks below the fiftieth percentile with respect to Total
Shareholder Return and Average ROE.
The Committee may, in its discretion, alter or amend these performance
condition guidelines prior to granting any new Awards and may pay a participant
in cash, shares of Energen Common Stock or a combination of both. The amount
of cash paid to a participant will be based on a twenty-day average of closing
prices for shares of Energen Common Stock or the value determined by Energen's
Board of Directors if no such prices are available. Performance Shares paid at
the close of an Interim Period will reduce the number of Performance Shares to
be paid at the close of an Award Period. A participant will not have to repay
any Performance Shares awarded on the close of an Interim Period if conditions
for payment at the close of an Award Period have not been satisfied. The Plan
is unfunded, and any benefits under the Plan will be paid from Energen's
general assets.
An Award of Performance Shares does not entitle a participant to
receive dividends on shares of Energen Common Stock or to vote shares of
Energen Common Stock which are subject to the Award. Only when the Committee
decides that the conditions for payment of the Award have been satisfied and
the participant actually receives shares of Energen Common Stock as payment
will a participant be entitled to such rights.
If the Committee determines that conditions for payment in full of an
Award at the close of an Award Period have not been met, no payment will be
made on an Award of Performance Shares. Any Performance Shares that are
awarded under the Plan and that are not payable upon expiration or termination
of an applicable Award Period will again be available for award under the Plan.
A participant will forfeit any unpaid portion of his Award if his employment
with Energen terminates for any reason other than a "Qualified Termination."
For purposes of the Plan, a "Qualified Termination" means termination of a
Participant's employment with Energen or its Subsidiary which is (i) an
involuntary termination by Energen or its subsidiaries other than for "Cause;"
(ii) expressly agreed in writing by the participant and Energen to constitute a
Qualified Termination for purposes of the Plan; (iii) a result of the death,
disability (as defined in the Plan) or retirement (as defined in the Plan) of
the participant; or (iv) a voluntary termination by the participant for "Good
Reason." The term "Good Reason" means, with respect to an Award and a
participant, the occurrence subsequent to the grant of such Award of (A) a
reduction in the participant's aggregate rate of monthly base pay or (B) the
termination or materially adverse modification of the Energen Annual Incentive
Compensation Plan without substitution of new short-term incentives providing
comparable compensation opportunities for the participant. Examples of
circumstances that constitute "Cause" and that will result in a participant
forfeiting such portion of his Award include Energen terminating a
participant's employment because the participant willfully and continuously
failed, after written demand and not as a result of any disability, to perform
his duties, the participant engaged in misconduct that was injurious to Energen
or the participant was convicted of a felony. The outstanding Awards of a
participant whose employment with Energen terminates as a result of a Qualified
Termination will remain in full force and effect, and at risk, for the
remainder of the Award period.
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A "Change in Control" of Energen is deemed to have occurred if an
individual or group acquires beneficial ownership of 25% or more of the
outstanding shares of Energen Common Stock, the individuals who constitute
Energen's current Board of Directors (the "Continuing Directors") cease to be a
majority (unless their successors were elected or nominated for election by a
majority of the Continuing Directors), a merger or other form of consolidation
results in the Continuing Directors ceasing to be a majority or in the
acquisition by an individual or group of 25% or more of the voting power of the
surviving entity, or Energen sells all or substantially all of its assets or
adopts a plan of liquidation or dissolution. Upon a Change in Control, all
outstanding Awards will be determined and paid in accordance with such
procedures as may be established by the Committee from time to time and all
such Awards will be paid in cash.
A participant's entitlement, if any, to pay out of Awards subsequent
to his termination of employment, including termination by Energen or its
Subsidiaries other than for Cause or filing a change in control, will continue
so long as the participant provides reasonable consultant services for three
years following termination of his employment in accordance with the provisions
of the Plan and does not, for a period of twelve months following termination
of his employment engage in any of the following competitive activities: (i)
solicit in competition with Alabama Gas Corporation ("Alagasco") any person or
entity which was a customer of Alagasco on the date of termination of
employment; (ii) offer to acquire any local gas distribution system located in
the State of Alabama; (iii) offer to acquire any coalbed methane interest in
the State of Alabama; or (iv) disclose any confidential information of Energen,
except in accordance with the provisions of the Plan.
The Board of Directors of Energen may terminate the Plan at any time,
and if not sooner terminated, the Plan will terminate when all the Performance
Shares awarded under the Plan have been paid. No termination will adversely
affect any right or obligation concerning a previously granted Award. No Award
may be granted after September 30, 2001.
Energen's Board of Directors may amend or suspend the Plan at any
time. However, no amendment or suspension can adversely affect any previously
granted Award, nor, may the Board of Directors amend or suspend any provision
relating to a Change in Control once a Change in Control has occurred.
RESALE RESTRICTIONS AND OTHER RESTRICTIONS ON TRANSFER
Persons who are "affiliates" of Energen within the meaning of
applicable federal securities laws and regulations (for example control persons
and certain officers and directors, including certain officers of Energen's
subsidiaries) may only sell Energen Common Stock pursuant to Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), or by complying with
the registration requirements of the Securities Act. All such persons should
consult Energen counsel concerning their status as affiliates and the
applicability of Rule 144 before selling any Energen Common Stock.
The interest of any person in the Plan is not assignable either
voluntarily or by operation of law, and any assignment will render an Award
void. Amounts payable under the Plan are transferable only by will or by the
laws of descent and distribution.
OWNERSHIP REPORTS AND SHORT-SWING PROFIT LIABILITY
Section 16(a) of the Exchange Act requires all directors, certain
officers and beneficial owners of more than ten percent of any class of
Energen's equity securities, including shares of Energen Common Stock issued
pursuant the Plan and derivative securities (such as stock options or warrants
issued by Energen or written by third parties), to report to the Securities and
Exchange Commission (the "Commission") all changes in their ownership of any of
Energen's equity securities. Initial statements of beneficial ownership must
be reported on Form 3. Subject to certain exceptions, for which no reporting
is required, acquisitions and dispositions of shares of Energen Common Stock
and other equity securities of Energen by such persons, or insiders, must be
reported to the Commission on Form 4, or, if not earlier reported on Form 4,on
Form 5 at the time Form 5 is required to be filed with respect to the fiscal
year in which the transaction occurred.
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Any profit realized by an insider on any acquisition and disposition,
or any disposition and then acquisition, of shares of Energen Common Stock or
derivative securities occurring within a six-month period is recoverable by
Energen (or a stockholder suing on behalf of Energen) under Section 16(b) of
the Exchange Act. However, the Commission has exempted certain transactions
with employee benefit plans from the requirements of Section 16(b) of the
Exchange Act. For example, shares of Energen Common Stock that are issued as
payment for an Award of Performance Shares are acquired in a transaction
directly with the issuer of such securities and the issuance of such shares
will be exempt from the short-swing profit recovery provisions of Section 16(b)
of the Exchange Act. However, depending on the conditions upon which an Award
of Performance Shares is made, an Award and any subsequent payment of an Award
may still be subject to the reporting requirements of Section 16(a) of the
Exchange Act. All insiders should consult Energen counsel concerning their
reporting and short-swing profit obligations under Section 16 of the Exchange
Act upon the grant of an Award of Performance Shares and the payment of shares
of Energen Common Stock for such Award, and prior to the disposition of any
such shares of Energen Common Stock.
FEDERAL INCOME TAX CONSEQUENCES
Since Energen believes that the Plan is not subject to any provisions
of the Employee Retirement Income Security Act of 1974, as amended, the Plan is
not qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended. As Awards of Performance Shares will normally be subject to a
substantial risk of forfeiture until a participant becomes entitled to payment
on such Performance Shares, a participant generally will not be required to
include an Award of Performance Shares in the participant's gross income.
However, participants in the Plan generally must include in their gross income
the amount of cash or the fair market value of the shares of Energen Common
Stock, which will also be the basis of such shares, to be paid to the
participant as payment on the participant's Performance Shares at the close of
an Interim Period or an Award Period. Energen generally is entitled to a
deduction at the same time and in the same amount as a participant realizes
ordinary income but only if Energen deducts and withholds from the participant
upon such amount in accordance with Section 3402 of the Code and so long as the
compensation is reasonable. The foregoing brief summary of the tax effects on
participants in the Plan is very general in nature and may be subject to a
number of exceptions. Participants are urged to consult with their individual
tax advisors regarding the effect of the granting of, and the payment upon,
Awards under the Plan because tax treatment may vary depending upon an
individual's circumstances.
ELECTION TO DEFER AWARDS UNDER PLAN
Participants in the Plan can elect to defer receipt of part or all of
any Award under the Plan pursuant to the Energen Corporation 1997 Deferred
Compensation Plan (the "Deferred Compensation Plan"). Information on the
Deferred Compensation Plan is available, without charge, to participants of the
Plan upon written or oral request to Energen Corporation, Secretary, 2101 Sixth
Avenue North, Birmingham, Alabama 35203 (Telephone No.: 205-326-2700).
ADDITIONAL INFORMATION
Energen has filed a registration statement on Form S-8 (the
"Registration Statement") under the Securities Act with the Commission relating
to the shares of Energen Common Stock offered hereby. The documents
incorporated by reference in Item 3 of Part II of the Registration Statement
(not including exhibits to the information that is incorporated by reference
unless such exhibits are specifically incorporated by reference into the
information that the Registration Statement incorporates) are incorporated by
reference into this Prospectus. Copies of such documents, which generally
consist of Energen's latest annual report on Form 10-K filed with the
Commission, all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the date of such annual report, the latest prospectus, if
any, filed with the Commission in connection with a registration statement
containing audited financial statements of Energen for the latest fiscal year
for which such statements have been filed, and a description of the Energen
Common Stock are available, without charge, to participants upon written or
oral request to Energen Corporation, Secretary, 2101 Sixth Avenue North,
Birmingham, Alabama 35203 (Telephone number: 205-326-2700). In addition,
copies of the documents then containing the information required to be
delivered to eligible participants in the Plan pursuant to Part I of the
Registration Statement, Energen's most recent annual report to shareholders and
all reports, proxy statements and other communications distributed generally to
Energen's security holders
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are available, without charge, to participants upon written or oral request to
Energen Corporation, Secretary, 2101 Sixth Avenue North, Birmingham, Alabama
35203 (Telephone number: 205-326-2700).
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