<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] 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
ENERGEN CORPORATION
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(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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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):
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
<TABLE>
<S> <C>
(ENERGEN LOGO) ENERGEN CORPORATION
-----------------------------------------------------------
605 21st Street North
Birmingham, Alabama 35203-2707
(205) 326-2700
</TABLE>
December 21, 1999
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 Annual Meeting will
be held at the principal office of the Company in Birmingham, Alabama on
Wednesday, January 26, 2000, at 9:30 A.M., Central Standard Time.
Details of the matters to be presented at this meeting are given in the
Notice of the Annual Meeting and in the Proxy Statement that follow.
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.
Instead of submitting your vote with the enclosed paper Proxy, you may be able
to vote electronically via the Internet or by telephone. Please refer to the
enclosed Proxy for instructions on how to vote via the Internet or by telephone.
Submitting your proxy vote via the Internet or by telephone will not affect your
right to vote in person should you decide to attend the Annual Meeting.
We have enclosed a copy of the Company's Annual Report to Shareholders for
the year ended September 30, 1999.
Yours very truly,
/s/ Wm. Michael Warren, Jr
Chairman of the Board
<PAGE> 3
ENERGEN CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 26, 2000
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, 605 Richard Arrington, Jr. Blvd. North (also known as 21st Street
North), Birmingham, Alabama, on Wednesday, January 26, 2000, at 9:30 A.M.,
Central Standard Time, for the following purposes:
1. To elect three directors to serve for a three-year term expiring in
2003; and
2. To transact such other business as may properly come before the Annual
Meeting.
Shareholders of record at the close of business on December 8, 1999 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, 1999
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE.
<PAGE> 4
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF ENERGEN CORPORATION
JANUARY 26, 2000
------------------
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, 605 Richard
Arrington, Jr. Blvd. North (also known as 21st Street North), Birmingham,
Alabama, on Wednesday, January 26, 2000, at 9:30 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 initially be mailed to Shareholders of the Company on or around
December 21, 1999.
All properly completed proxies received by the Board of Directors of the
Company will be voted in accordance with the instructions appearing on such
proxies. 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. 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.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting the shareholders of the Company will consider and
take action on the following matter and on such other matters as may properly
come before the meeting:
ELECTION OF DIRECTORS
Directors of the Company are elected on a staggered basis, with 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 Annual Meeting of Shareholders to be held in 2003. 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.
<PAGE> 5
NOMINEES FOR ELECTION AS DIRECTORS
FOR THREE-YEAR TERMS TO EXPIRE IN 2003
<TABLE>
<CAPTION>
NAME AND YEAR FIRST BECAME DIRECTOR PRINCIPAL OCCUPATION AND OTHER INFORMATION
----------------------------------- ------------------------------------------
<S> <C>
REX J. LYSINGER...................... Mr. Lysinger, 62, retired as Chairman of the Board effective
Director since 1979 January 1, 1998. He had held that position since 1982. He
is also a director of SouthTrust Corporation; a director
of Associated Electric & Gas Insurance Services Limited, a
mutual insurance company serving the United States public
utility industry; a director of Resource Management
Service, Inc., a private timberland investment and
management company; President of the Public Affairs
Council of Alabama; and a member of the Board of Trustees
of Samford University in Birmingham, Alabama.
DR. JUDY M. MERRITT.................. Dr. Merritt, 56, is President of Jefferson State Community
Director since 1993 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, N.A.
DRAYTON NABERS, JR................... Mr. Nabers, 59, is Chairman of the Board, Chief Executive
Director since 1984 Officer and a director of Protective Life Corporation and
Chairman of the Board 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 Alabama National
Bancorporation.
</TABLE>
DIRECTORS WHOSE TERMS EXPIRE IN 2001
<TABLE>
<CAPTION>
NAME AND YEAR FIRST BECAME DIRECTOR PRINCIPAL OCCUPATION AND OTHER INFORMATION
----------------------------------- ------------------------------------------
<S> <C>
DR. STEPHEN D. BAN................... Dr. Ban, 59, is President and Chief Executive Officer of Gas
Director since 1992 Research Institute ("GRI"), a nonprofit 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
nonprofit 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 Board of Directors
of the United States Energy Association.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
NAME AND YEAR FIRST BECAME DIRECTOR PRINCIPAL OCCUPATION AND OTHER INFORMATION
----------------------------------- ------------------------------------------
<S> <C>
JULIAN W. BANTON..................... Mr. Banton, 59, is Chairman of the Board, President and
Director since 1997 Chief Executive Officer of SouthTrust Bank, N.A.,
headquartered in Birmingham, Alabama. He joined SouthTrust
in 1982, was named President in 1985 and in 1988 was named
to his current position. Prior to joining SouthTrust, Mr.
Banton was in charge of Corporate and International
Banking for Signet Bank in Richmond, Virginia. He is also
a director of SouthTrust Corporation; Brookwood Hospital;
Consumer Bankers Association; the Metropolitan Development
Board (Birmingham, Alabama); Birmingham Area Chamber of
Commerce; Inroads Development Program and the Alabama
School of Fine Arts. Mr. Banton is also a past director of
the Birmingham Branch of the Federal Reserve Bank of
Atlanta.
WM. MICHAEL WARREN, JR............... Mr. Warren, 52, is Chairman of the Board, President and
Director since 1986 Chief Executive Officer of the Company and is a director of
the Company and each of its 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, was
elected President and Chief Executive Officer of Alabama
Gas Corporation and Energen Resources Corporation in
September, 1995 and was elected Chief Executive Officer of
the Company in February, 1997. He is also a city director
of AmSouth Bank of Alabama and a member of the Board of
Trustees of Birmingham-Southern College.
</TABLE>
DIRECTORS WHOSE TERMS EXPIRE IN 2002
<TABLE>
<CAPTION>
NAME AND YEAR FIRST BECAME DIRECTOR PRINCIPAL OCCUPATION AND OTHER INFORMATION
----------------------------------- ------------------------------------------
<S> <C>
J. MASON DAVIS, JR................... Mr. Davis, 64, is a partner with the Birmingham, Alabama law
Director since 1992 firm of Sirote & Permutt, P.C. He joined that firm in
1984. Mr. Davis also served as an Adjunct Professor of Law
at the University of Alabama School of Law in Tuscaloosa,
Alabama from 1972 to 1997. He is also Chairman of the
Board of Directors of Protective Industrial Insurance
Company of Alabama, Inc., based in Birmingham, Alabama.
JAMES S. M. FRENCH................... Mr. French, 59, is Chairman, President, Chief Executive
Director since 1979 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; Hilb, Rogal
and Hamilton Company, a network of insurance agencies;
Protective Life Corporation; and the subsidiaries of Dunn
Investment Company.
WALLACE L. LUTHY..................... Mr. Luthy, 66, retired effective December 31, 1995, as
Director since 1995 President and General Manager of Mobil Natural Gas Inc.,
headquartered in Houston, Texas. Mobil Natural Gas was a
subsidiary of Mobil Corporation and processed and marketed
natural gas in the United States and Canada. Upon his
retirement, Mr. Luthy had completed 40 years of service
with Mobil.
</TABLE>
3
<PAGE> 7
Each of the directors of the Company also serves as a director of Alabama
Gas Corporation and Energen Resources Corporation, the Company's principal
subsidiaries. Mr. R. D. Cash, Chairman, President and Chief Executive Officer of
Questar Corporation, resigned from the Board of Directors of the Company
effective October 1, 1999. He had served as a director of the Company since
November, 1996.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company has established a standing Audit
Committee currently composed of three directors who are not officers of the
Company. The members of the Audit Committee are: J. Mason Davis, Jr. (Chair),
James S. M. French, and Julian W. Banton. R. D. Cash served on the Audit
Committee during the 1999 fiscal year. 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 1999 fiscal year the Audit
Committee held three meetings.
The Board of Directors of the Company has established an Officers Review
Committee (the "ORC") currently composed of three directors who are not officers
of the Company. The members of the ORC are: Drayton Nabers, Jr. (Chair), Stephen
D. Ban, and Wallace L. Luthy. R. D. Cash served as a member of the ORC during
the 1999 fiscal year. The duties of the ORC 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. The ORC
also administers the Company's 1992 Long-Range Performance Share Plan, 1988
Stock Option Plan, 1997 Deferred Compensation Plan and 1997 Stock Incentive
Plan. During the 1999 fiscal year, the ORC held two meetings.
The Board of Directors of the Company has established a Finance Committee
currently composed of six directors who are not officers of the Company. The
members of the Finance Committee are: Wallace L. Luthy (Chair), Stephen D. Ban,
James S. M. French, Rex J. Lysinger, Judy M. Merritt, and Julian W. Banton. The
duties of the Finance Committee are to review financial policy, capital
structure, significant oil and gas property acquisitions and exploration
programs and the issuance of securities necessary to finance the activities of
the Company. The Finance Committee did not meet during the 1999 fiscal year.
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:
Judy M. Merritt (Chair), J. Mason Davis, Jr., Rex J. Lysinger, and Drayton
Nabers, Jr. 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. No formal
procedures whereby individual shareholders can submit recommendations of persons
to be considered for nomination as a director of the Company have been
instituted. However, the Governance and Nominations Committee would consider any
such recommendations made to it in writing on a timely basis. During the 1999
fiscal year, the Governance and Nominations Committee held one meeting.
During the 1999 fiscal year the Board of Directors of the Company met eight
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 1999 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. Effective October 1, 1999, the monthly retainer
for directors
4
<PAGE> 8
who are not officers was increased to $1,250, and effective October 27, 1999,
meeting fees for non-officer directors for meetings of the Board of Directors
were increased to $1,250 for each meeting attended. Committee meeting fees
remained at $1,000 per meeting attended.
The Energen Corporation 1992 Directors Stock Plan provides for an annual
grant and issuance of six hundred shares of Common Stock, following the last day
of each fiscal year 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 Directors Stock 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.
Under the Company's 1997 Deferred Compensation Plan, members of the Board
of Directors may elect to defer part or all of their director fees and annual
and/or elective grants under the Directors Stock Plan. The 1997 Deferred
Compensation Plan is discussed below in greater detail under the caption "1999
Compensation Committee Report -- 1997 Deferred Compensation Plan."
5
<PAGE> 9
SUMMARY OF SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS,
MANAGEMENT AND EMPLOYEE STOCK OWNERSHIP PLAN PARTICIPANTS
The following table shows the shares of Common Stock of the Company
("Common Stock") beneficially owned by (i) each person (including each "group"
as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) who is known by the Company to be the
beneficial owner of more than five percent (5%) of the Company's outstanding
Common Stock as of September 30, 1999, (ii) each director or nominee for
director, (iii) each executive officer of the Company named in the Summary
Compensation Table, and (iv) all directors and executive officers of the Company
(including certain executive officers of the Company's subsidiaries) as a group,
as of December 8, 1999. The table also shows the shares of Common Stock
beneficially owned by participants in the Energen Corporation Employee Savings
Plan as a group as of September 30, 1999. Except as noted below, each such
individual has sole voting power and sole investment power with respect to such
shares. The final column indicates Common Stock share equivalents held under the
Energen Corporation Deferred Compensation Plan as of September 30, 1999.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
SHARES OF CLASS SHARE EQUIVALENTS
NAME OF INDIVIDUAL BENEFICIALLY BENEFICIALLY UNDER
OR PERSONS IN GROUP OWNED(1) OWNED(2) DEFERRED PLAN(3)
------------------- ------------ ------------ -----------------
<S> <C> <C> <C>
Capital Guardian Trust Company North America..... 1,586,500 5.27% --
The Capital Group Companies Inc.
333 South Hope Street
Los Angeles, California 90071-1406
Stephen D. Ban................................... 9,165 * -0-
Julian W. Banton................................. 1,750 * 623
R.D. Cash(4)..................................... 5,004 * -0-
J. Mason Davis, Jr............................... 7,393 * 2,859
James S. M. French............................... 22,200 * -0-
Geoffrey C. Ketcham.............................. 68,137 * 6,195
Wallace L. Luthy................................. 55,100 * 400
Rex J. Lysinger.................................. 125,264 * 598
James T. McManus................................. 72,542 * 9,709
Judy M. Merritt.................................. 4,110 * -0-
Drayton Nabers, Jr............................... 24,056 * 2,082
Dudley C. Reynolds............................... 50,053 * 1,742
Wm. Michael Warren, Jr........................... 194,340 * 36,168
Gary C. Youngblood............................... 76,258 * -0-
All directors and executive officers (16
persons)....................................... 764,832 2.54% 69,904
Energen Corporation Employee Savings Plan(5)..... 3,098,038 10.29% --
</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. The shares of Common Stock do not include shares acquired through
dividend reinvestment subsequent to September 30, 1999. Dunn Investment
Company, of which Mr. French is President, Chief Executive Officer and a
director, owns 120,000 shares of Common Stock, which shares are not included
in the totals noted above. The shares of Common Stock shown above for
Messrs. Warren, Ketcham, Youngblood, McManus, Reynolds and the executive
officers of the Company include shares which are held for their respective
accounts under the Energen Corporation Employee Savings Plan as of September
30, 1999, described in note 5 below. Messrs. Warren, Ketcham, Youngblood,
McManus, Reynolds, Lysinger and all directors and executive officers as a
group hold presently exercisable options to acquire 92,900, 33,814, 27,914,
53,914, 13,332, 54,200 and 300,338 shares of Common Stock, respectively,
which amounts are included in the above table.
6
<PAGE> 10
(2) The percentage of Common Stock beneficially owned does not include shares of
Common Stock credited to Company Stock Accounts under the Energen
Corporation Deferred Compensation Plan.
(3) Represents shares of Common Stock credited to Company Stock Accounts under
the Energen Corporation Deferred Compensation Plan as of September 30, 1999.
The value of Company Stock Accounts tracks the performance of the Common
Stock, with reinvestment of accrued dividends. The Company Stock Accounts
have no voting rights.
(4) Mr. Cash resigned as a director of the Company effective October 1, 1999.
(5) 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.
Except for the Company's Employee Savings Plan and Capital Guardian Trust
Company North America, the Company is not aware of any person or group which
beneficially owns more than 5% of the Company's Common Stock.
1999 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 and
its shareholders, customers, and 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 shareholders 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.
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.
7
<PAGE> 11
ANNUAL INCENTIVES. Executives are eligible each year for cash incentive
awards. In the case of certain executives, including those listed in the Summary
Compensation Table, the awards are based upon attaining preestablished earnings
per share growth targets. In the case of other executives, the awards are based
on such earnings per share growth targets, as well as other corporate
performance criteria and individual performance criteria. Assuming applicable
objectives are met, the incentive award is based upon a percentage of the salary
earned by the participant during the performance year.
LONG-TERM INCENTIVE COMPENSATION. The Company has in place its 1992
Long-Range Performance Share Plan, 1997 Stock Incentive Plan and 1988 Stock
Option Plan. The present policy of the ORC is to use the Performance Share Plan
as the primary vehicle to deliver long-term incentives supplemented in certain
circumstances by the 1997 Stock Incentive Plan. Options for substantially all
shares reserved for issuance under the 1988 Stock Option Plan have previously
been granted and the ORC does not expect to make further grants under this plan.
The purpose of each of these plans is to provide executives 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 in value 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
conditions, 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, under certain circumstances, 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 amend performance conditions prior to granting any
new awards and may pay a participant in cash or a combination of cash and shares
of Common Stock.
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 with respect to total shareholder
return among a comparison group of companies as measured for the applicable
award or interim period. Subject to the discretion of the ORC to adjust for
extenuating circumstances, the payout percentage 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.
1997 STOCK INCENTIVE PLAN. The 1997 Stock Incentive Plan provides for the
grant of incentive stock options and non-qualified stock options with stock
appreciation rights and dividend equivalents, and for the grant of restricted
stock or a combination thereof to officers and key employees all as determined
by the ORC. If an option includes stock appreciation rights, 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 in effect on the first day
of the respective quarter.
1988 STOCK OPTION PLAN. The 1988 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. As noted above, options previously have
been granted with respect to substantially all shares available for issuance
under the 1988 Plan. 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
8
<PAGE> 12
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 in effect on the first day of the respective quarter.
1997 DEFERRED COMPENSATION PLAN. Under the Company's 1997 Deferred
Compensation Plan, officers may elect to defer part or all of any one or more of
the following items of compensation to the extent such item of compensation is
applicable to the officer: (a) base salary; (b) annual incentive compensation
plan awards; (c) grants under the 1988 Stock Option Plan; (d) awards under the
1997 Stock Incentive Plan; and (e) awards under the 1992 Long-Range Performance
Share Plan. Amounts deferred by a participant under the Deferred Compensation
Plan are credited to one of two separate accounts maintained for a participant,
a Company stock account or an investment account. The value of a participant's
Company stock account tracks the performance of the Company Common Stock,
including reinvestment of dividends. At distribution, the participant's Company
stock account is payable in the form of shares of Company Common Stock. The
value of a participant's investment account tracks the performance of certain
Frank Russell Trust Company mutual funds. At distribution, the participant's
investment account is payable in cash. The Company has established a trust with
Frank Russell Trust Company and has funded the trust, and presently plans to
continue funding the trust, in a manner that generally tracks participants'
accounts under the Deferred Compensation Plan. Although there is generally no
requirement that the trust be so funded or invested, if a change in control of
the Company occurs, the trust must be funded in an amount equal to the aggregate
value of the participants' accounts at the time of the change of control. While
intended for payment of benefits under the Deferred Compensation Plan, the trust
assets remain subject to the claims of the Company's creditors.
OPERATING SUMMARY
As demonstrated in the plan descriptions provided, compensation is linked
directly to objective performance criteria of 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 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,
1998 TO SEPTEMBER 30, 1999)
Energen completed another successful year on September 30, 1999. Earnings
of $41.4 million were achieved from current year operations equal to $1.38 per
diluted share, reflecting a 12.2% growth rate over the prior fiscal year
earnings of $1.23 per diluted share. Energen was able to increase its cash
dividend 3.2% to $0.645 and had a total shareholder return of 10.5%. These
successes were made possible by similar successes in major corporate
subsidiaries. The ORC considered these and other factors in funding the
incentive program, adjusting salaries, and approving payouts under the
Long-Range Performance Share Plan and 1997 Stock Incentive Plan. Specifically,
the ORC considered Energen's total shareholder return and earnings results for
the fiscal year and evaluated the Company's return on equity performance against
the peer group using comparable accounting methods.
Wm. Michael Warren, Jr. was elected Chief Executive Officer in February,
1997 and became Chairman of the Board effective January 1, 1998. As reported in
last year's Proxy Statement, Mr. Warren's base salary was adjusted to $335,000
in March, 1997 and such salary remained in effect at that level for thirty-two
months. Mr. Warren's base salary was adjusted to $380,000 effective November 1,
1999, reflecting efforts to meet market levels. The compensation philosophy for
the Chief Executive Officer position will continue to place a greater percentage
of the total compensation package "at risk" through the annual cash incentive
plan and through the Company's stock performance by awards of stock options,
restricted stock and performance shares. Mr. Warren's incentive award of
$255,600 payable in cash was earned for the 1998-99 reporting year, reflecting
the performance of the Company, its subsidiaries, and the incumbent himself in
achieving the
9
<PAGE> 13
financial and business results of the Company. Restricted stock was granted in
accordance with plan provisions and the stated compensation philosophy.
Performance share awards were made based on a percentage of salary with the
applicable percentage being a function of an executive's position with the
Company. Actual payout is dependent on obtaining performance levels in
accordance with previously described guidelines.
The Officers Review Committee: Drayton Nabers, Jr., Chair
Stephen D. Ban
Wallace L. Luthy
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid in
fiscal year 1999 and the two prior fiscal years to the Company's Chief Executive
Officer and the Company's four other most highly compensated executive officers:
TABLE 1
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- ---------------------------- ---------
RESTRICTED LONG-TERM
NAME AND INCENTIVE OTHER STOCK STOCK INCENTIVE ALL OTHER
PRINCIPAL SALARY COMPENSATION ANNUAL AWARD(S) OPTIONS/SARS(1) PAYOUTS COMPENSATION
POSITION YEAR ($) ($) COMPENSATION ($) (#) ($) ($)(2)
- - - - - - - - - - - - - - - - - ----------------------- ------- -------- ------------ ------------ ---------- --------------- --------- ------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
- - - - - - - - - - - - - - - - - ----------------------- ------- -------- -------- -------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Warren, Jr., Wm. Michael -- Chairman, President and Chief Executive Officer
9/30/99 335,000 255,600 5,500 296,912 20,643
9/30/98 335,000 247,600 60,000 248,937 22,166
9/30/97 316,833 180,000 56,000 216,482 14,793
Ketcham, Geoffrey C. -- Executive Vice President, Chief Financial Officer and Treasurer
9/30/99 218,500 139,500 7,500 163,517 14,153
9/30/98 201,250 125,000 40,000 142,772 13,161
9/30/97 191,817 96,000 124,011 11,556
Youngblood, Gary C. -- President and Chief Operating Officer of Alabama Gas Corporation
9/30/99 212,917 136,300 7,500 124,007 17,354
9/30/98 189,167 120,000 40,000 82,366 11,467
9/30/97 166,667 85,000 67,740 10,385
McManus, James T. -- President and Chief Operating Officer of Energen Resources Corporation
9/30/99 207,500 133,100 7,500 104,447 11,025
9/30/98 179,167 150,000 40,000 65,169 10,212
9/30/97 152,416 110,000 50,000 54,837 9,053
Reynolds, Dudley C. -- General Counsel and Secretary
9/30/99 170,755 109,000 124,007 10,618
9/30/98 164,417 102,000 20,000 82,366 9,749
9/30/97 157,500 75,000 69,890 9,270
</TABLE>
NOTES TO TABLE 1
(1) Stock options have been adjusted to reflect the two-for-one split of the
Company's Common Stock effected on March 2, 1998.
(2) The amounts shown represent contributions made by the Company to its defined
contribution plans on behalf of each executive officer.
10
<PAGE> 14
TABLE 2
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- - - - - - - - - - - - - - - - - ----------------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS/
UNDERLYING SARS EXERCISE
OPTIONS/ GRANTED TO OR GRANT DATE
SARS GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME (#) FISCAL YEAR ($/SH) DATE ($)(1)
(A) (B) (C) (D) (E) (F)
- - - - - - - - - - - - - - - - - --------------------------------- ------------ -------------- ----------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Warren -- -- -- -- --
Ketcham 1,250(2) 1.58% 18.25 10/27/08 6,779
1,250(3) 1.58% 18.25 10/27/08 6,779
5,000(4) 6.33% 18.25 10/27/08 27,115
Youngblood 1,250(2) 1.58% 18.25 10/27/08 6,779
1,250(3) 1.58% 18.25 10/27/08 6,779
5,000(4) 6.33% 18.25 10/27/08 27,115
McManus 1,250(2) 1.58% 18.25 10/27/08 6,779
1,250(3) 1.58% 18.25 10/27/08 6,779
5,000(4) 6.33% 18.25 10/27/08 27,115
Reynolds -- -- -- -- --
</TABLE>
NOTES TO TABLE 2
(1) Reflects Black-Scholes valuation of $5.42 per share. For purposes of this
valuation, the following assumptions were used: dividend yield of 3.30%,
expected volatility of 29.794%, risk-free interest rate of 6.11% and a
seven-year time of exercise.
(2) Date of exercisability is 10/28/99.
(3) Date of exercisability is 10/28/00.
(4) Date of exercisability is 10/28/01.
TABLE 3
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT FY-END OPTIONS/SARS AT FY-END
ACQUIRED (#) ($)(2)
ON EXERCISE VALUE REALIZED --------------------------- ---------------------------
NAME (#) ($)(1) (D) (E)
--------------------- ----------- -------------- --------------------------- ---------------------------
(A) (B) (C) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Warren -- -- 108,096 66,000 832,221 216,500
Ketcham -- -- 19,232 34,168 96,727 68,336
Youngblood -- -- 17,032 34,168 70,602 68,336
McManus 17,200 186,200 39,332 58,168 163,164 194,336
Reynolds -- -- 9,166 13,334 43,020 26,668
</TABLE>
NOTES TO TABLE 3
(1) Market value of underlying securities at time of exercise minus the exercise
price.
(2) Market value of underlying securities at year-end market price (September
30, 1999) of $20.25 per share minus the exercise price.
11
<PAGE> 15
TABLE 4
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF SHARES, OR OTHER NON-STOCK PRICE-BASED PLANS
UNITS OR PERIOD UNTIL ------------------------------
OTHER RIGHTS MATURATION OR THRESHOLD TARGET MAXIMUM
NAME (#) PAYOUT (#) (#) (#)
- - - - - - - - - - - - - - - - - ----------------------- ----------------- ------------------ --------- -------- -------
(A) (B) (C) (D) (E) (F)
- - - - - - - - - - - - - - - - - ----------------------- ----------------- ------------------ --------- -------- -------
<S> <C> <C> <C> <C> <C>
Warren 26,800 10/1/98 to 9/30/02 13,400 N/A 26,800
Ketcham 7,950 10/1/98 to 9/30/02 3,975 N/A 7,950
Youngblood 7,790 10/1/98 to 9/30/02 3,895 N/A 7,790
McManus 7,580 10/1/98 to 9/30/02 3,790 N/A 7,580
Reynolds 6,210 10/1/98 to 9/30/02 3,105 N/A 6,210
</TABLE>
The 1992 Long-Range Performance Share Plan, under which the grants listed
in Table 4 above were made, is described more fully under the caption "1999
Compensation Committee Report -- 1992 Long-Range Performance Share Plan" of the
Proxy Statement above.
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 Summary 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
annual or long-term incentives.) 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. 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, 1999, no employees of the Company would have been entitled to payments for
benefits in excess of the Section 415 limits.
The Company has entered into retirement supplement agreements
("Supplemental Agreements") with certain officers, including each of the persons
named in the Summary Compensation Table. 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. The
amounts shown are subject to deduction for applicable Social Security benefits
at age 62.
12
<PAGE> 16
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------
COMPENSATION 15 20 25 30 35 40
------------ -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$150,000........................... $90,000 $90,000 $90,000 $90,000 $90,000 $90,000
$175,000........................... $105,000 $105,000 $105,000 $105,000 $105,000 $105,000
$200,000........................... $120,000 $120,000 $120,000 $120,000 $120,000 $120,000
$225,000........................... $135,000 $135,000 $135,000 $135,000 $135,000 $135,000
$250,000........................... $150,000 $150,000 $150,000 $150,000 $150,000 $150,000
$300,000........................... $180,000 $180,000 $180,000 $180,000 $180,000 $180,000
$400,000........................... $240,000 $240,000 $240,000 $240,000 $240,000 $240,000
$450,000........................... $270,000 $270,000 $270,000 $270,000 $270,000 $270,000
$500,000........................... $300,000 $300,000 $300,000 $300,000 $300,000 $300,000
$600,000........................... $360,000 $360,000 $360,000 $360,000 $360,000 $360,000
</TABLE>
The amount of base compensation and the years of service credited under the
plan for individuals shown in the Summary Compensation Table are as follows: Mr.
Warren, $380,000, 16 years; Mr. Ketcham, $240,000, 18 years; Mr. Youngblood
$240,000, 30 years; Mr. McManus $240,000, 14 years and Mr. Reynolds $180,000, 19
years.
SEVERANCE COMPENSATION AGREEMENTS
The Company has entered into severance compensation agreements with Messrs.
Warren, Ketcham, Youngblood, McManus and Reynolds, as well as twenty-one other
officers not named in the Summary Compensation Table. Generally, each such
agreement provides that if, within thirty-six months following a change in
control of the Company (as defined in the agreements), the employee's employment
is terminated in a qualified termination, then the Company shall make a lump sum
payment to the employee equal to a percentage of the employee's annual base
salary in effect immediately prior to the change in control, plus that
percentage of the employee's highest additional cash compensation for the three
fiscal years immediately prior to the fiscal year during which the change in
control occurs. Under certain circumstances, the payment may be applicable to a
termination which occurs during the period leading up to a change in control.
For purposes of establishing the applicable percentage of an employee's annual
salary and additional cash compensation, the Company has established a four-tier
structure in which tier-one employees receive 300% of such compensation,
tier-two employees receive 200% of such compensation, tier-three employees
receive 150% of such compensation and tier-four employees receive 100% of such
compensation. For purposes of severance compensation calculations, Messrs.
Warren, Ketcham, McManus, Youngblood and Reynolds are considered tier-one
employees, and the remainder of the employees with whom the Company has entered
into severance compensation agreements are considered tier-two, tier-three or
tier-four employees. The agreements also provide (i) the continuance of certain
insurance and other employee benefits for a period of twenty-four months
following any such termination of employment and (ii) that if the executive
receives payments that would be subject to the tax imposed by Section 4999 of
the Internal Revenue Code, the executive shall be entitled to receive an
additional payment in an amount necessary to put the executive in the same
after-tax position as if such tax had not been imposed. For purposes of the
agreements, (i) the term "qualified termination" means a termination by the
Company other than for cause, by the employee for good reason or by written
agreement to such effect between the employee and the Company, (ii) the term
"cause" generally means failure to substantially perform duties, misconduct
injurious to the Company or conviction of a felony, and (iii) the term "good
reason" generally means a reduction in the position, duties, responsibilities,
status or benefits of the employee's job. For purposes of tier-one, tier-two or
tier-three employee agreements, the term "qualified termination" also includes
any voluntary termination by the executive during the thirty-day period
immediately following the first anniversary of a change in control.
13
<PAGE> 17
PERFORMANCE GRAPH(1)
ENERGEN CORPORATION -- COMPARISON OF FIVE-YEAR
CUMULATIVE SHAREHOLDER RETURNS
<TABLE>
<CAPTION>
S&P 500 INDEX ENERGEN PEER GROUP(2)
------------- ------- -------------
<S> <C> <C> <C>
1994 100 100 100
1995 130 102 111
1996 156 118 139
1997 219 182 164
1998 239 201 166
1999 306 223 177
</TABLE>
NOTES TO PERFORMANCE GRAPH
(1) Total shareholder return includes reinvested dividends.
(2) The Peer Group Index includes the companies listed below. Except as
otherwise indicated by reference to specific years of inclusion, each
company is included for each fiscal year. Changes reflect removal of a
company's stock from public trading and additions to replace removed
companies: AGL Resources, Inc., Atmos Energy Corporation, Bay State Gas
Company (1994-1998), Cascade Natural Gas Corp., Colonial Gas Company
(1994-1998), Connecticut Energy Corporation, Consolidated Natural Gas, CTG
Resources Inc., Eastern Enterprises, Enserch Corporation (1994-1996),
Equitable Resources, Inc., Indiana Energy, Inc., K N Energy, Inc., Keyspan
Energy Corp., Laclede Gas Company, MCN Energy Group, National Fuel Gas
Corporation, New Jersey Resources Corp., NICOR Inc., NorAm Energy Corp.
(1994-1996), North Carolina Natural Gas (1994-1998), Northwest Natural Gas
Company, NUI Corporation, ONEOK, Inc., Pacific Enterprises (1994-1996),
Pennsylvania Enterprises, Inc., Peoples Energy Corporation, Piedmont Natural
Gas Co., Inc., Providence Energy Corporation, Public Service of North
Carolina, Questar Corporation, SEMCO Energy Inc., South Jersey Industries,
Inc., Southern Union Company (1997-1999), Southwest Gas Corporation,
Southwestern Energy Company, UGI Corporation, United Cities Gas Company
(1994-1996), Washington Gas Light Company, Washington Energy Company
(1994-1996), WICOR, Inc., and Yankee Energy System (1997-1999).
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP examined the financial statements of
the Company for the fiscal year ended September 30, 1999, and the Board of
Directors intends to continue the services of this firm
14
<PAGE> 18
for the fiscal year ending September 30, 2000. A representative of
PricewaterhouseCoopers LLP will be present at the Annual Meeting, will have an
opportunity to make a statement if he or she desires to do so 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, 2000. In
addition, if a shareholder fails to notify the Company on or before November 6,
2000 of a proposal which such shareholder intends to present at the Company's
January 2001 Annual Meeting other than through inclusion of such proposal in the
Company's proxy materials for the meeting, then, if such proposal is presented
at the January 2001 Annual Meeting, management proxies may use their
discretionary voting authority with respect to such proposal.
GENERAL INFORMATION
Shareholders of record at the close of business on December 8, 1999 are
entitled to notice of and to vote upon all matters at the Annual Meeting. As of
the close of business on December 8, 1999 there were outstanding 30,096,071
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.
In the case of the election of directors, the vote does not 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 New York Stock Exchange Rule 451 concerning the delivery of proxy
materials to beneficial owners of the Company's Common Stock held by such
brokers.
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 vote upon all other matters
presented for action at the Annual Meeting according to their best judgment if
the Company did not have notice of such matters on or before November 6, 1999.
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 $7,500, plus out-of-pocket
expenses.
ENERGEN CORPORATION
(/s/ Wm. Michael Warren, Jr.)
------------------------------------------
Chairman of the Board
Birmingham, Alabama
December 21, 1999
15
<PAGE> 19
(ENERGEN LOGO)
ENERGEN CORPORATION
605 RICHARD ARRINGTON, JR. BLVD. NORTH (21ST STREET NORTH)
BIRMINGHAM, ALABAMA 35203-2707
(205) 326-2700
<PAGE> 20
PROXY -- ENERGEN CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 26, 2000
P
R SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ENERGEN CORPORATION
O
The undersigned, revoking all proxies heretofore given with respect to
X the shares represented hereby, hereby appoints WM. MICHAEL WARREN, JR. and
DUDLEY C. REYNOLDS, or either of them acting in the absence of the other,
Y with full power of substitution, proxies to represent the undersigned at
the Annual Meeting of Shareholders of Energen Corporation (the "Company"),
to be held on January 26, 2000 at 9:30 a.m., Central Standard Time, at the
principal office of the Company in Birmingham, Alabama, and at any
adjournments thereof (the "Annual Meeting"), respecting the shares of
Common Stock which the undersigned would be entitled to vote if then
personally present, as follows:
SEE REVERSE
SIDE
- - - - - - - - - - - - - - - - - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
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 Annual 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 Annual Meeting. If you vote in person at the Annual
Meeting, your Proxy will not be used.
DIVIDEND REINVESTMENT AND DIRECT STOCK PURCHASE PLAN
Energen Corporation offers shareholders and other investors the opportunity to
purchase Energen common stock directly, without incurring fees and commissions.
This plan is offered through a prospectus available from the Plan
Administrator, First Chicago Trust Company of New York, Division of EquiServe,
by calling 1-800-946-4316 or 1-800-654-3206. Enrollment material also is
available on the World Wide Web at HTTP://WWW.EQUISERVE.COM.
SHAREHOLDER ASSISTANCE: 1-888-764-5603
This automated voice response system is available 24 hours a day, seven
days a week for the convenience of Energen Corporation shareholders. Customer
service representatives are available from 8:30 a.m. to 7:00 p.m. Eastern time,
Monday through Friday, to assist shareholders with account balances, dividend
information, transfer instructions, and sale or certificate information.
ENERGEN ON THE WEB
Interested parties with Internet access may review Energen corporate
information, including news releases and annual reports, on Energen's home page
at WWW.ENERGEN.COM.
<PAGE> 21
[X] PLEASE MARK YOUR
VOTES AS IN THIS 3346
EXAMPLE.
<TABLE>
<CAPTION>
FOR WITHHELD NOMINEES:
<S> <C> <C> <C> <C>
1. Election of [ ] [ ] For three year term ending 2003: 2. In their discretion, to vote
Directors 01. Rex J. Lysinger upon such other matters as may
02. Judy M. Merritt come before the Annual Meeting.
03. Drayton Nabers, Jr.
</TABLE>
(To withheld authority to vote for any individual nominee, write that nominee's
name in the space provided below.)
All as such items or proposals are
more fully set forth in the Company's
Proxy Statement with respect to the
Annual Meeting received by the
undersigned. (THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFIC
INDICATIONS ABOVE. IN THE ABSENCE OF
SUCH INDICATIONS, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL
NOMINEES.)
-------------------------------------
-------------------------------------
SIGNATURE(S) DATE
- - - - - - - - - - - - - - - - - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
[ENERGEN LOGO]
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, JANUARY 26, 2000, AT 9:30 A.M. CST
ENERGEN CORPORATION HEADQUARTERS
605 21ST STREET NORTH
(NORTHEAST CORNER OF 21ST STREET AND 6TH AVENUE NORTH)
BIRMINGHAM, ALABAMA
TELEPHONE AND INTERNET VOTING INSTRUCTIONS
You may use the telephone or the internet, 24 hours a day, 7 days a week, to
vote. To access the telephone or internet voting instruction system, you must
use the control number printed in the box above.
1. To vote over the telephone: Using a touch-tone telephone, call
1-877-PRX-VOTE (1-877-779-8683).
2. To vote over the internet: Log on to the internet and go to the web site
http://www.eproxyvote.com/egn
Using the telephone or internet voting instruction system has the same effect as
giving voting instructions by marking, signing, dating and returning the Voting
Instruction Form. If you use the telephone or internet voting instruction
system, there is no need for you to mail back your Voting Instruction Form.
