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EXHIBIT 10(h)
ENERGEN CORPORATION
1997 STOCK INCENTIVE PLAN
(As Amended Effective October 1,2000)
The purpose of this Plan is to provide a means whereby Energen
Corporation may, through the use of stock and stock related compensation,
attract and retain persons of ability as employees and motivate such employees
to exert their best efforts on behalf of Energen Corporation and its
subsidiaries.
1. DEFINITIONS. As used in the Plan, the following terms have
meanings indicated:
"Award" means Incentive Stock Options, Nonqualified Stock Options
and/or Restricted Stock granted under the Plan.
"Board" means the Board of Directors of Energen.
"Cause" means any of the following:
(1) The willful and continued failure by a Participant to
substantially perform such Participant's duties with Energen
or Subsidiary (other than any such failure resulting from such
Participant's incapacity due to physical or mental illness)
after a written demand for substantial performance is
delivered to the Participant specifically identifying the
manner in which such Participant has not substantially
performed such Participant's duties.
(2) The engaging by a Participant in willful, reckless or
grossly negligent misconduct which is demonstrably injurious
to Energen or a Subsidiary monetarily or otherwise; or
(3) The conviction of a Participant of a felony.
"Change in Control" means: the occurrence of any one or more of the
following:
(1) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(a "Person") of beneficial ownership (within the meaning of Rule 13(d)-3
promulgated under the Exchange Act) of 25% or more of either (i) the then
outstanding shares of common stock of Energen (the "Outstanding Common Stock")
or (ii) the combined voting power of the then outstanding voting securities of
Energen entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); provided, however, that for purposes of this
subsection (1) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by Energen or any corporation controlled by Energen
shall not constitute a Change in Control;
(2) Individuals who, as of October 1, 1999,
constitute the Board of Directors of Energen (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of Directors of
Energen (the "Board of Directors"); provided, however that any individual
becoming a director subsequent to such date whose election, or nomination for
election by Energen's shareholders, was approved by a vote of at least a
majority of the directors then comprising the
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Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors;
(3) Consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets, of Energen (a "Business Combination"), in each case, unless, following
such Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 75% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Energen or all or
substantially all of Energen's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Common Stock
and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding
any corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of Energen or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board of
Directors, providing for such Business Combination;
(4) Any transaction or series of transactions
which is expressly designated by resolution of the Board of Directors to
constitute a Change in Control for purposes of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Officers Review Committee of the Board or such
other Committee of two or more directors as may be determined by the Board.
"Energen" means Energen Corporation and any successor corporation by
merger or other reorganization.
"Employee" means any employee of one or more of Energen and the
Subsidiaries.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exercise Date" means the date on which a notice of option exercise is
delivered to Energen pursuant to Section 6.3(c) or a notice of option
cancellation is delivered to Energen pursuant to Section 6.3(i).
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"Expiration Date" means the last day on which an option issued under
the Plan may be exercised, as such date may be extended pursuant to Section
6.3(a).
"Fair Market Value" means, with respect to a share of Stock, the
closing price of the Stock on the New York Stock Exchange (or such other
exchange or system on which the Stock then trades or is quoted) or, if there is
no trading of the Stock on the relevant date, then the closing price on the most
recent trading date preceding the relevant date. With respect to other
consideration, the term Fair Market Value means fair market value as may be
reasonably determined by the Committee.
"Incentive Stock Options" means options granted under the Plan to
purchase Stock which at the time of grant qualify as "incentive stock options"
within the meaning of Section 422 of the Code.
"Nonqualified Stock Options" means options granted under the Plan to
purchase Stock which are not Incentive Stock Options.
"Participant" means an Employee who is selected by the Committee to
receive an Award.
"Performance Measures" has the meaning set forth in Section 7.3.
"Plan" means this Energen Corporation 1998 Stock Incentive Plan.
"Restricted Stock" means Stock granted to a Participant under Section 7
of the Plan with respect to which the applicable Restrictions have not lapsed or
been removed.
"Restrictions" means the transfer and other restrictions set forth in
Section 7.2(a).
"Stock" means the common stock, par value $.01 per share, of Energen as
such stock may be reclassified, converted or exchanged by reorganization, merger
or otherwise.
"Subsidiary" means any corporation, the majority of the outstanding
voting stock of which is owned, directly or indirectly by Energen Corporation.
"Ten Percent Stockholder" means an individual who, at the time of
grant, owns stock possessing more than 10 percent of the total combined voting
power of all classes of stock of Energen.
2. SHARES SUBJECT TO THE PLAN. Subject to adjustment in
accordance with Section 3, an aggregate of 650,000 shares of Stock are available
for issuance (including shares transferred from treasury) under the Plan. Shares
of Stock allocable to an Award or portion of an Award that is canceled by
forfeiture, expiration or for any other reason (excepting pursuant to a stock
appreciation right election under Section 6.3(i)) shall again be available for
additional Awards. If any option granted under the Plan shall be canceled as to
any shares of Stock pursuant to Section 6.3(i) (stock appreciation rights), then
such shares of Stock shall not be available for the grant of another Award.
3. ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK. In the event
of any change in the Stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
shares, or rights offering to purchase Stock at a price substantially below fair
market value, or of any similar change affecting the Stock, the number and kind
of shares which thereafter may be available for issuance under the Plan, and the
number and kind
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of shares subject to option in outstanding option agreements and the purchase
price per share thereof shall be appropriately adjusted consistent with such
change in such manner as the Committee may deem equitable to prevent dilution or
enlargement of the rights granted to, or available for, Participants in the
Plan. If the adjustment would result in fractional shares with respect to an
Award, then the Committee may make such further adjustment (including, without
limitation, the use of consideration other than Stock or rounding to the nearest
whole number of shares) as the Committee shall deem appropriate to avoid the
issuance of fractional shares.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Committee. No member of the Committee shall be eligible to participate in
the Plan while serving as a member of the Committee. Subject to the provisions
of the Plan, the Committee shall have the exclusive authority to select the
Employees who are to be Participants in the Plan, to determine the Award to be
made to each Participant, and to determine the conditions subject to which
Awards will become payable under the Plan. The Committee shall have full power
to administer and interpret the Plan and to adopt such rules and regulations
consistent with the terms of the Plan as the Committee deems necessary or
advisable in order to carry out the provisions of the Plan. The Committee's
interpretation and construction of the Plan and of any conditions applicable to
Awards shall be conclusive and binding on all persons, including Energen and all
Participants. Any action which can be taken, or authority which can be
exercised, by the Committee with respect to the Plan, may also be taken or
authorized by the Board.
5. PARTICIPATION. Participants in the Plan shall be selected by
the Committee from those Employees who, in the judgment of the Committee, have
significantly contributed or can be expected to significantly contribute to
Energen's success.
6. OPTIONS
6.1 GRANT OF OPTIONS. Subject to the provisions of the Plan, the
Committee may (a) determine and designate from time to time those Participants
to whom options are to be granted and the number of shares of Stock to be
optioned to each employee; (b) authorize the granting of Incentive Stock
Options, Nonqualified Stock Options, or combination of Incentive Stock Options
and Nonqualified Stock Options; (c) determine the number of shares subject to
each option; (d) determine the time or times when each Option shall become
exercisable and the duration of the exercise period; and (e) determine whether
and, if applicable, the manner in which each option shall contain stock
appreciation rights and/or dividend equivalents; provided, however, that (i) no
Incentive Stock Option shall be granted after the expiration of ten years from
the effective date of the Plan specified in Section 13 and (ii) the aggregate
Fair Market Value (determined as of the date the option is granted) of the Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any employee during any calendar year (under all plans of Energen and its
Subsidiaries) shall not exceed $100,000.
6.2 INDIVIDUAL LIMITATION. The aggregate of all Awards received by
any individual Participant shall not include options with respect to more than
150,000 shares of Stock (adjusted in accordance with Section 3).
6.3 TERMS AND CONDITIONS OF OPTIONS. Each option granted under the
Plan shall be evidenced by an agreement, in a form approved by the Committee.
Such agreement shall be subject to the following express terms and conditions
and to such other terms and conditions as the Committee may deem appropriate:
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(a) Option Period. Each option agreement shall specify
the period for which the option thereunder is granted and shall provide
that the option shall expire at the end of such period. The Committee
may extend such period provided that, in the case of an Incentive Stock
Option, such extensions shall not in any way disqualify the option as
an Incentive Stock Option. In no case shall such period for an
Incentive Stock Option, including any such extensions, exceed ten years
from the date of grant, provided, however that, in the case of an
Incentive Stock Option granted to a Ten Percent Stockholder, such
period, including extensions, shall not exceed five years from the date
of grant.
(b) Option Price. The option price per share shall be
determined by the Committee at the time any option is granted, and
shall be not less than (i) the Fair Market Value, or (ii) in the case
of an Incentive Stock Option granted to a Ten Percent Stockholder, 110
percent of the Fair Market Value, (but in no event less than the par
value) of one share of Stock on the date the option is granted, as
determined by the Committee.
(c) Exercise of Option. No part of any option may be
exercised until the optionee shall have remained in the employ of
Energen or of a Subsidiary for such period, if any, as the Committee
may specify in the option agreement, and the option agreement may
provide for exercisability in installments. The Committee shall have
full authority to accelerate for any reason it deems appropriate the
vesting schedule of all or any part of any option issued under the
Plan. Each option shall be exercisable in whole or part on such date or
dates and during such period and for such number of shares as shall be
set forth in the applicable option agreement. An optionee electing to
exercise an option shall give written notice to Energen of such
election and of the number of shares the optionee has elected to
purchase and shall at the time of exercise tender the full purchase
price of the shares the optionee has elected to purchase plus any
required withholding taxes in accordance with Sections 6.3(d) and 8.
(d) Payment of Purchase Price upon Exercise. The purchase
price of the shares as to which an option shall be exercised shall be
paid to Energen at the time of exercise (i) in cash, (ii) in Stock
already owned by the optionee having a total Fair Market Value equal to
the purchase price and not subject to any lien, encumbrance or
restriction on transfer other than pursuant to federal or state
securities laws, (iii) by election to have Energen withhold (from the
Stock to be delivered to the optionee upon such exercise) shares of
Stock having a Fair Market Value equal to the purchase price or (iv) by
any combination of such consideration having a total Fair Market Value
equal to the purchase price; provided that the use of consideration
described in clauses (ii), (iii) and (iv) shall be subject to approval
by the Committee. In addition the Committee in its discretion may
accept such other consideration or combination of consideration as the
Committee shall deem to be appropriate and to have a total Fair Market
Value equal to the purchase price. In each case, Fair Market Value
shall be determined as of the Exercise Date.
(e) Exercise in the Event of Death or Termination of
Employment. If an optionee's employment by Energen and all Subsidiaries
shall terminate because of the optionee's (i) death, (ii) disability,
or (iii) retirement in accordance with the terms of Energen's
tax-qualified retirement plans, the optionee's options may be exercised
on or prior to the applicable Expiration Dates, but only to the extent
that such options were exercisable on the date of such termination. If
an optionee's employment by Energen and all Subsidiaries shall
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terminate for any reason other than (i) those set forth in the
preceding sentence, or (ii) termination for Cause, then all unexercised
options under the Plan held by the optionee (vested or unvested) shall
terminate ninety days following the date of termination of employment,
provided that the Committee shall have the authority to extend such
option termination date. Without limiting the generality of Section
5(c), the Committee shall have full authority to accelerate the vesting
schedule of all or any part of any option issued under the Plan and
held by an employee who has terminated or plans to terminate his or her
employment, such that a terminated employee, his heirs or personal
representatives may exercise (at such time or times on or prior to the
applicable Expiration Dates as may be specified by the Committee) any
part or all of any unvested option under the Plan held by such employee
at the date of his or her termination of employment. Upon termination
for Cause, all unexercised options held by the terminated Employee
shall immediately terminate and may not be exercised.
(f) Nontransferability. Except as may otherwise be
provided in this Section 5(f), no option granted under the Plan shall
be transferable other than by will or by the laws of descent and
distribution and, during the lifetime of the optionee, an option shall
be exercisable only by the optionee. The foregoing notwithstanding, the
optionee may transfer Nonqualified Stock Options to (i) the optionee's
spouse or natural, adopted or step-children or grandchildren (including
the optionee, "Immediate Family Members"), (ii) a trust for the benefit
of one or more of the Immediate Family Members, (iii) a family
charitable trust established by one or more of the Immediate Family
Members, or (iv) a partnership in which the only partners are (and,
except as may be otherwise agreed by the Committee, will remain during
the option period) one or more of the Immediate Family Members. Any
options so transferred shall not be further transferable except in
accordance with the terms of this Plan, shall remain subject to all
terms and conditions of the Plan and the applicable option agreement,
and may be exercised by the transferee only to the extent that the
optionee would have been entitled to exercise the option had the option
not been transferred.
(g) Investment Representation. To the extent reasonably
necessary to assure compliance with all applicable securities laws,
upon demand by the Committee for such a representation, the optionee
shall deliver to the Committee at the time of any exercise of an option
or portion thereof or settlement of stock appreciation rights or
dividend equivalents a written representation that the shares to be
acquired upon such exercise are to be acquired for investment and not
for resale or with a view to the distribution thereof. Upon such
demand, delivery of such representation prior to the delivery of any
shares issued upon exercise of an option and prior to the expiration of
the option period shall be a condition precedent to the right of the
optionee or such other person to purchase any shares.
(h) Incentive Stock Options. Each option agreement which
provides for the grant of an Incentive Stock Option to a participant
shall contain such terms and provisions as the Committee may determine
to be necessary or desirable in order to qualify such option as an
"incentive stock option" within the meaning of Section 422 of the Code,
or any amendment thereof or substitute therefor. Energen, in its
discretion, may retain possession of any certificates for Stock
delivered in connection with the exercise of an Incentive Stock Option
or appropriately legend such certificates during the period that a
disposition of such Stock would disqualify the exercised option from
treatment as an incentive stock option under Section 422 of the Code (a
"422 Option"). Subject to the other provisions of the Plan, Energen
shall cooperate with the optionee should the optionee desire to make a
disqualifying
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disposition. Any Incentive Stock Option which is disqualified from
treatment as a 422 Option for whatever reason, shall automatically
become a Nonqualified Stock Option. No party has any obligation or
responsibility to maintain an Incentive Stock Option's status as a 422
Option. The optionee shall, however, immediately notify Energen of any
disposition of Stock which would cause an Incentive Stock Option to be
disqualified as a 422 Option.
(i) Stock Appreciation Right. Each option agreement may
provide that the optionee may from time to time elect, by written
notice to Energen, to cancel all or any portion of the option then
subject to exercise, in which event Energen's obligation in respect of
such option shall be discharged by payment to the optionee of an amount
in cash equal to the excess, if any, of the Fair Market Value as of the
Exercise Date of the shares subject to the option or the portion
thereof so canceled over the aggregate purchase price for such shares
as set forth in the option agreement or, if mutually agreed by the
Committee and the optionee, (i) the issuance or transfer to the
optionee of shares of Stock with a Fair Market Value as of the Exercise
Date equal to any such excess, or (ii) a combination of cash and shares
of Stock with a combined value as of the Exercise Date equal to any
such excess.
(j) Dividend Equivalents. Each option agreement may
provide that upon (i) exercise of all or part of an option, (ii)
cancellation of all or part of such option pursuant to paragraph 5(i),
or (iii) the occurrence of an Expiration Date, for no additional
consideration, the optionee shall be paid an additional amount equal to
the aggregate amount of cash dividends which would have been paid on
the shares of Stock purchased upon such exercise or with respect to
which such cancellation or expiration occurs, if such shares had been
issued and outstanding during the period commencing with the option
grant date and ending on the date of option exercise, cancellation or
expiration, 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 on each
April 1, July 1, October 1 and January 1, at a rate calculated as
follows. For purposes of the preceding sentence, the assumed interest
rate in effect for a calendar quarter shall be the announced prime rate
of AmSouth Bank of Alabama (or such comparable rate of a comparable
institution as the Committee may from time to time determine) in effect
on the first day of such calendar quarter. Such additional amount shall
be paid by cash, or if mutually agreed by the Committee and the
optionee, by the issuance of Stock or a combination of cash and shares
of Stock having an aggregate Fair Market Value as of the applicable
Expiration or Exercise Date, equal to any such excess.
(k) No Rights as Shareholder. No optionee shall have any
rights as a shareholder with respect to any shares subject to the
optionee's option prior to the date of issuance to the optionee of a
certificate or certificates for such shares.
(l) Delivery of Certificates. Subject to Section 6.3(h),
as soon as reasonably practicable after receipt of an exercise notice
and full payment, Energen shall deliver to the optionee, registered in
the optionee's name, certificates for the appropriate number of shares
of Stock.
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7. RESTRICTED STOCK
7.1 GRANT OF RESTRICTED STOCK. The Committee may make grants of
Restricted Stock to Participants. Each restricted Stock Award shall be evidence
by an agreement in a form approved by the Committee, setting forth the number of
shares of Restricted Stock granted and the terms and conditions to which the
Restricted Stock is subject. Restricted Stock may be awarded by the Committee in
its discretion with or without cash consideration.
7.2 TERMS AND CONDITIONS OF RESTRICTED STOCK.
(a) Restrictions. No shares of Restricted Stock may be
sold, assigned, transferred, pledged, hypothecated, or otherwise
encumbered or disposed of (the "Restrictions") until the Restrictions
on such shares have lapsed or been removed.
(b) Lapse. The Committee shall establish as to each Award
of Restricted Stock the terms and conditions upon which the
Restrictions shall lapse, which terms and conditions may include,
without limitation, a required period of service, Performance Measures,
or any other individual or corporate performance conditions.
(c) Termination of Employment. Except as may be otherwise
expressly provided in the applicable Restricted Stock Award agreement,
should the Participant's employment with Energen and all Subsidiaries
terminate for any reason including, without limitation, termination
because of the Participant's death, disability, or retirement in
accordance with Energen's tax-qualified retirement plans, any shares of
Stock which remain subject to Restrictions, shall be forfeited and
returned to Energen unless the Committee decides, in its discretion, to
accelerate the time at which any remaining Restrictions lapse or to
remove any or all such Restrictions entirely (subject to Section
7.2(d)). Upon the termination of the Participant's employment for any
reason, the Committee is not required to act and, absent some action by
the Committee, all shares of Stock remaining subject to Restriction
will be forfeited and returned to Energen.
(d) Lapse at Discretion of Committee. The Committee may
at any time, in its sole discretion, accelerate the time at which any
or all Restrictions on a Restricted Stock Award will lapse or remove
any and all such Restrictions; provided that the Committee may not
accelerate the lapse of or remove Restrictions which require the
attainment of a Performance Measure except as may be permitted by the
performance-based exception to Section 162(m) of the Code.
(e) Rights with respect to Restricted Stock. Upon the
acceptance by a Participant of an award of Restricted Stock, such
Participant shall, subject to the restrictions set forth in paragraph
(b) above, have all the rights of a shareholder with respect to such
shares of Restricted Stock, including, but not limited to, the right to
vote such shares of Restricted Stock and the right to receive all
dividends and other distributions paid thereon. Certificates
representing Restricted Stock may be held by Energen until the
restriction lapse and shall bear such restrictive legends as Energen
shall deem appropriate.
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(f) No Section 83(b) Election. Unless otherwise expressly
agreed in writing by Energen, a Participant shall not make an election
under Section 83(b) of the Code with respect to a Restricted Stock
Award and upon the making of any such election, all shares of
Restricted Stock subject to the election shall be forfeited and
returned to Energen.
7.3 PERFORMANCE MEASURES. At its discretion, the Committee may
make the lapsing of Restrictions subject to the attainment of one or more
Performance Measures designed to qualify for the performance-based exceptions
from Section 162(m) of the Code.
Unless and until Energen's shareholders approve a change in the Performance
Measures set forth in this Section 7.3, the Performance Measures to be used for
purposes of such Awards shall be chosen from among the following alternatives,
as measured with respect to Energen and/or any one or more of the Subsidiaries,
with or without comparison to a peer group:
(a) return on shareholder's equity;
(b) return on assets;
(c) net income;
(d) earnings per common share;
(e) total shareholder return;
(f) oil and/or gas reserve additions;
(g) utility customer number, volume and/or revenue growth; and
(h) such other criteria as may be established by the Committee
in writing and which meets the requirements of the
performance-based exception to Section 162(m) of the Code.
In the event that the performance-based exception to Section 162(m) or its
successor is amended such that the performance-based exception permits the
employer to alter the governing performance measures without obtaining
shareholder approval of such changes, the Committee shall have discretion to
make such changes without obtaining shareholder approval.
8. WITHHOLDING. Each Participant shall, no later than the date as
of which the value of an Award first becomes includable in the gross income of
the Participant for Federal income tax purposes, pay to Energen and
Subsidiaries, or make arrangements satisfactory to the Committee, in its sole
discretion, regarding payment of, any Federal, FICA, state, or local taxes of
any kind required by law to be withheld with respect to the Award. The
obligations of Energen under the Plan shall be conditional on such payment or
arrangements. Energen and, where applicable, its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes owed hereunder
by a Participant from any payment of any kind otherwise due to said Participant.
The Committee may permit Participants to elect to satisfy their Federal, and
where applicable, FICA, state and local tax withholding obligations with respect
to all Awards by the reduction, in an amount necessary to pay
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all said withholding tax obligations, of the number of shares of Stock or amount
of cash otherwise issuable or payable to said Participants in respect of an
Award.
9. NO RIGHTS TO CONTINUED EMPLOYMENT. The Plan and any Award
granted under the Plan shall not confer upon any Participant any right with
respect to continuance of employment by Energen or any Subsidiary or any right
to further Awards under the Plan, nor shall they interfere in any way with the
right of Energen or any Subsidiary by which a Participant is employed to
terminate the Participant's employment at any time.
10. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the
grant and fulfillment of Awards thereunder, and the obligations of Energen to
sell, issue, release and/or deliver shares of Stock shall be subject to all
applicable federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required. Energen shall not be
required to issue or deliver any certificates for shares of Stock prior to (a)
the listing of such shares on any stock exchange on which the Stock may then be
listed and (b) the completion of any registration or qualification of such
shares under any federal or state law, or any ruling or regulation of any
government body which Energen shall, in its sole discretion, determine to be
necessary or advisable
11. CHANGE IN CONTROL. Except as may be otherwise expressly
provided in the applicable Award agreement, upon the occurrence of a Change in
Control all outstanding Incentive Stock Options and Nonqualified Stock Options
shall be immediately and fully vested and exercisable and all restrictions on
all outstanding Restricted Stock shall immediately lapse. Except as may be
otherwise expressly provided in the applicable Award Agreement, if a
Participant's employment by Energen and all subsidiaries is terminated during a
Pre-Closing Period (defined below) (i) involuntarily by Energen other than for
Cause, or (ii) voluntarily by the Participant for Good Reason (defined below),
then all of the Participant's outstanding Incentive Stock Options and
Nonqualified Stock Options shall be immediately and fully vested and exercisable
and all restrictions on all of the Participant's outstanding Restricted Stock
shall immediately lapse. A "Pre-Closing Period" commences upon Energen
shareholder approval of a transaction which upon consummation will constitute a
Change in Control and ends upon the first to occur of (i) the closing of such
transaction or (ii) a determination by the Board that such Change in Control
will not be consummated. "Good Reason" means with respect to a Participant (i) a
reduction in Participant's aggregate rate of monthly base pay from Energen and
all subsidiaries or (ii) the termination or materially adverse modification of
the Energen Annual Incentive Compensation Plan without substitution of new
short-term incentives providing comparable compensation for the Participant.
12. AMENDMENT AND DISCONTINUANCE. The Board of Directors of
Energen may from time to time amend, suspend or discontinue the Plan. Without
the written consent of a Participant, no amendment or suspension of the Plan
shall alter or impair any Award previously granted to a Participant under the
Plan.
The foregoing notwithstanding, if Energen agrees to a Change in
Control transaction for which the parties intend to use the pooling of interests
accounting method and, in the opinion of the Independent Auditor (defined
below), (i) the use of such accounting method is precluded by a prior amendment
of the Plan or a prior Award grant, (ii) such impediment to use of the pooling
of interests method can be removed by modification or nullification of such
amendment or Award, and (iii) there will be no other impediments to the use of
the pooling of interests method, then, effective contemporaneous with the
closing of the Change in Control, the Board may modify or nullify such
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prior amendment or Award. Any such modification or nullification will be done
only to the extent deemed necessary by the Independent Auditor and to the extent
possible will be done in a manner which has the least adverse economic effect on
Participants. Any Award which has been exercised or had its restrictions lapse,
may only be modified or nullified with the consent of the Participant.
"Independent Auditor" means the firm of certified public accountants which at
the time of the Change in Control had been most recently engaged by Energen to
render an opinion on Energen's consolidated financial statements, or any other
firm of certified public accountants mutually agreeable to Energen and at least
eighty percent of the Participants holding Awards outstanding as of the date of
the Change in Control.
13. EFFECTIVE DATE OF THE PLAN. The effective date of the Plan
shall be November 25, 1997, the date of its adoption by the Board, subject to
approval by shareholders of Energen holding not less than a majority of the
shares present and voting at its January 1998 Annual Meeting. Awards may be
granted under the Plan by the Committee as provided herein prior but subject to
such subsequent shareholder approval of the Plan.
14. NAME. The Plan shall be known as the "Energen Corporation
1997 Stock Incentive Plan."
15. 1997 DEFERRED COMPENSATION PLAN. If and to the extent
permitted under the Energen Corporation 1997 Deferred Compensation Plan (the
"Deferred Compensation Plan"), a Participant may elect, pursuant to the Deferred
Compensation Plan, to defer receipt of part or all of any shares of Stock or
other consideration deliverable under an Award and upon such deferral shall have
no further right with respect to such deferred Award other than as provided
under the Deferred Compensation Plan. In the event of such a deferral election,
certificates for such shares of Stock as would have otherwise been issued under
the Plan but for the deferral election, may at the discretion of Energen be
delivered to the Trustee under the Deferred Compensation Plan and registered in
the name of the Trustee or such other person as the Trustee may direct.
Regardless of whether such deferred shares of Stock are issued to the Trustee,
they shall constitute "issued" shares for purposes of the Plan's maximum number
of shares limitation set forth in Section 2.
As approved by the Energen Corporation Board of Directors on November
25, 1997, and amended by the Board on October 27,1999 (effective as of October
1,1999), and October 25, 2000 (effective as of October 1, 2000).
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Assistant Secretary
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