Exhibit 10(i)

ENERGEN CORPORATION

1997 STOCK INCENTIVE PLAN

(As Amended Effective January 1, 2010)

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:

(a) “Award” means any grant or award under the Plan of Incentive Stock Options,
Nonqualified Stock Options, Restricted Stock and/or Performance Shares granted
under the Plan.

(b) “Award Period” means the 4-year period (Energen fiscal years) commencing
with the first day of the fiscal year in which the applicable Performance Share
Award is granted, except as otherwise determined by the Committee at the time of
grant and subject to the other provisions of this Plan.

(c) “Board” means the Board of Directors of Energen.

(d) “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 a 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.

(e) “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 January 1, 2007, constitute the Board of Directors of
Energen (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board

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of Directors of Energen (the “Board of Directors”); provided, however that any
individual becoming a director subsequent to such date whose election, or
nomination for election by Energen’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors;

(3) Consummation of a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets, of Energen (a “Business
Combination”), in each case, unless, following such Business Combination,
(i) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Common Stock and Outstanding
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% 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 Plan. The Board of Directors may limit the applicability of
such Change in Control designation to specific participants and/or specific
purposes.

(5) In addition to the above described Changes in Control, a Subsidiary
transaction (defined below) will constitute a Change in Control to the extent
specified below. A “Subsidiary Transaction” is a transaction that results in
securities representing 80% or more of the voting interests in a Subsidiary or
substantially all of a Subsidiary’s assets being transferred to an entity not
controlled by or under common control with Energen.

(i) A Subsidiary Transaction involving a disposition of Energen’s largest
Subsidiary or the assets of Energen’s largest Subsidiary will constitute a
Change in Control if immediately prior to such transaction the Executive was an
officer or employee of Energen or Energen’s largest Subsidiary. The largest
Subsidiary is determined by net book value of property, plant and equipment.

 

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(ii) A Subsidiary Transaction involving a disposition of Energen Resources
Corporation or its assets will constitute a Change in Control with respect to
each Participant who immediately prior to the transaction was an officer or
employee of Energen Resources Corporation.

(iii) A Subsidiary Transaction involving a disposition of Alabama Gas
Corporation or its assets will constitute a Change in Control with respect to
each Participant who immediately prior to the transaction was an officer or
employee of Alabama Gas Corporation.

(f) “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

(g) “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.

(h) “Energen” means Energen Corporation and any successor corporation by merger
or other reorganization.

(i) “Employee” means any employee of one or more of Energen and the
Subsidiaries.

(j) “Exchange Act” means the Securities Exchange Act of 1934.

(k) “Exercise Date” means the date on which a notice of option exercise is
delivered to Energen pursuant to Section 6.2(c) or a notice of option
cancellation is delivered to Energen pursuant to Section 6.2(i).

(l) “Expiration Date” means the last day of the option period specified at the
time of grant pursuant to Section 6.2(a).

(m) “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.

(n) “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.

(o) “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.

(p) “Interim Period” means a 1, 2 or 3 year period within a Performance Share
Award Period for which the Committee determines that there shall be Interim
Periods.

 

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(q) “Measurement Value” means the average of the daily closing prices for a
share of Stock for the 20 trading days ending on the fifth business day prior to
the date of payment of Performance Shares for an Award Period or an Interim
Period, as the case may be, on the Composite Tape for the New York Stock
Exchange — Listed Stocks, or, if the stock is not listed on such Exchange, on
the principal United States securities exchange registered under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), on which the stock is
listed, or, if the stock is not listed on any such Exchange, the average of the
daily closing bid quotations with respect to a share of the stock for such 20
trading days on the National Association of Securities Dealers, Inc., Automated
Quotations System or any system then in use, or, if no such quotations are
available, the fair market value of a share of Stock as determined by a majority
of the Board of Directors; provided, however that if a Change in Control shall
have occurred, then if no such quotations are available, such determination
shall be made by a majority of the Incumbent Board (as defined in the Change in
Control definition above).

(r) “Nonqualified Stock Options” means options granted under the Plan to
purchase Stock which are not Incentive Stock Options.

(s) “Participant” means an Employee who is selected by the Committee to receive
an Award.

(t) “Performance Measures” has the meaning set forth in Section 10.

(u) “Performance Share” means the value equivalent of one share of Stock.

(v) “Plan” means this Energen Corporation 1997 Stock Incentive Plan.

(w) Qualified Termination. “Qualified Termination” means termination of a
Participant’s employment with Energen and all Subsidiaries under any one of the
following circumstances:

 

  (1) An involuntary termination by Energen and the Subsidiaries, as applicable,
other than for Cause.

 

  (2) Expressly agreed in writing by the Participant and Energen and/or a
Subsidiary to constitute a Qualified Termination for purposes of this Plan.

 

  (3) A result of the Participant’s death or disability.

 

  (4) A result of Participant’s retirement under the Energen Corporation
Retirement Income Plan, as amended from time to time.

 

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  (5) With respect to Awards granted prior to a Change in Control, a voluntary
termination for good reason entitling the Participant to severance compensation
under a written change in control severance compensation agreement between
Energen and the Participant.

(x) “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.

(y) “Restrictions” means the transfer and other restrictions set forth in
Section 7.2(a).

(z) “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.

(aa) “Subsidiary” means any corporation, the majority of the outstanding voting
stock of which is owned, directly or indirectly by Energen Corporation.

(bb) “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. Share Limitations.

2.1 Shares Subject to the Plan. Subject to adjustment in accordance with
Section 3, as of January 1, 2007, 3,539,608 shares of Stock remained reserved
and available for issuance under the Plan for outstanding and future Awards,
reflecting the original 650,000-share authorization, the 1998 stock split
adjustment, an additional 1,500,000 shares authorized at the January 2002
shareholder meeting, and the 2005 stock split adjustment). 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 6.2(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 6.2(i) (stock appreciation rights), then such
shares of Stock shall not be available for the grant of another Award.

2.2 Individual Limitation. Subject to adjustment in accordance with Section 3,
the maximum aggregate number of shares of Stock represented by all Awards
granted to any one Participant during any one Energen fiscal year shall not
exceed 400,000 (reflects the 2005 stock split adjustment), calculated assuming
maximum payout of the Awards and with each Performance Share representing one
share of Stock.

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, the terms of
outstanding Awards shall be appropriately adjusted consistent with such change
in such manner as

 

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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 15 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 Terms and Conditions of Options. Each option granted under the Plan shall be
evidenced by a written agreement. 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:

(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.

 

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(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 6.2(d)
and 9.

(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 for Cause,
then all options held by the terminated Employee shall immediately expire. In
the event of a Qualified Termination, then all options (subject to the
pre-Change in Control grant date limitation of Section 1(w)(5)), held by the
optionee shall be immediately and fully vested and, subject to the following
sentence, may be exercised on or prior to the applicable Expiration Dates. With
respect to options issued on or after October 25, 2006, (i) in the event of a
Section 1(w)(4) Qualified Termination due to retirement, the

 

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options may be exercised on or prior to the earlier of the applicable Expiration
Dates or the fifth anniversary of the termination date; and (ii) in the event of
any other Qualified Termination, the options may be exercised on or prior to the
earlier of the applicable Expiration Dates or the third anniversary of the
termination date. If an optionee’s employment by Energen and all Subsidiaries
shall terminate for any reason other than Cause or a Qualified Termination, then
all of the optionee’s unvested options shall expire as of the termination date
and all of the optionee’s vested options shall expire ninety days following the
date of termination of employment, provided that the Committee shall have the
authority to extend such option expiration date up to the original Expiration
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. The foregoing notwithstanding, the
Committee may at the time of grant provide for different or supplemental terms
and conditions with respect to termination of employment and any such terms and
conditions expressly provided in the written option agreement shall be
controlling with respect to that option.

(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

 

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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 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 U.S. bank prime rate published by The
Wall Street Journal in its “Money Rate” tables (or such comparable rate 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 6.2(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 evidenced by a written
agreement 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. In the event of a Qualified Termination, then all
restrictions on the Participant’s outstanding Restricted Stock (subject to the
pre-Change in Control grant date limitation of Section 1(w)(5)) shall
immediately lapse. Should a Participant’s employment with Energen and all
Subsidiaries terminate for any reason other than a Qualified Termination, any
shares of the Participant’s Stock which remain subject to Restrictions, shall be
forfeited and returned to Energen. The foregoing notwithstanding, the Committee
may at the time of grant provide for different or supplemental terms and
conditions with respect to termination of employment and any such terms and
conditions expressly provided in the written Restricted Stock agreement shall be
controlling with respect to that grant of Restricted Stock.

(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 restrictions
lapse and shall bear such restrictive legends as Energen shall deem appropriate.

(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.

 

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8. Performance Shares

8.1 Grant of Performance Shares

(a) The Committee may from time to time select employees to receive Performance
Shares under the Plan. An Employee may be granted more than one Performance
Share Award under the Plan. In its discretion at the time of grant, the
Committee may determine that an Interim Period or Interim Periods should be
established for payment with respect to Performance Share Awards. Whenever
Interim Periods are established, the terms and conditions with respect to
payment after the end of such Interim Period shall be those set by the
Committee.

(b) A Performance Share Award shall not entitle a Participant to receive any
dividends or dividend equivalents on Performance Shares; no Participant shall be
entitled to exercise any voting or other rights of a stockholder with respect to
any Performance Share Award under the Plan; and no Participant shall have any
interest in or rights to receive any shares of Stock prior to the time when the
committee determines the form of payment of Performance Shares pursuant to
Section 8.2.

(c) Payment of a Performance Share Award to any Participant shall be made in
accordance with Section 8.2 and shall be subject to such conditions for payment
as the Committee may prescribe at the time the Performance Share Award is made.
The Committee may prescribe conditions such that payment of a Performance Share
Award may be made with respect to a number of shares of Stock greater than the
number of Performance Shares awarded. The Committee may prescribe different
conditions for different Participants.

(d) Each Performance Share Award shall be made in writing and shall set forth
the terms and conditions set by the Committee for payment of such Performance
Share Award.

8.2 Payment of Performance Share Awards

Each Participant granted a Performance Share Award shall be entitled to payment
on account thereof as of the close of the applicable Award Period, but only if
the Committee has determined that the conditions for payment of the Award set by
the Committee have been satisfied. Participants granted Awards with Interim
Periods shall be entitled to partial payment on account thereof as of the close
of the Interim Period, but only if the Committee has determined that the
conditions for partial payment of the Award set by the Committee have been
satisfied. Performance Shares paid to a Participant for an Interim Period need
not be repaid to Energen, notwithstanding that, based on the conditions set for
payment at the end of the Award Period, such Participant would not have been
entitled to payment of any portion of such Award. Any Performance Shares paid to
a Participant for the Interim Period during an Award Period shall be deducted
from the Performance Shares to which such Participant is entitled at the end of
the Award Period.

Payment of Awards shall be made by Energen promptly following the determination
by the Committee that payment has been earned. Payment shall be made in the form
of shares of Stock.

 

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8.3 Termination of Employment

Except in the case of a Qualified Termination, if, prior to the close of the
Award Period with respect to a Performance Share Award, a Participant’s
employment with Energen and all Subsidiaries terminates, then any unpaid portion
of such Participant’s Performance Share Award shall be forfeited. In the case of
a Qualified Termination, the Participant shall remain entitled to payout of any
outstanding Performance Share Awards (subject to the retirement reduction
described below) at the end of the applicable Award Period in accordance with
the terms of this Plan including without limitation applicable performance
conditions.

Retirement. If the Participant’s termination satisfies only that part of the
Qualified Termination definition related to retirement (Section 1(w)(4)), then
this paragraph applies. If the Participant, having reached Retirement Date as
defined under the Energen Corporation Retirement Income Plan, as amended from
time to time, retires prior to the end of the first twelve months of an Award
Period (the “Initial Fiscal Year”), the number of Performance Shares for such
Award shall be reduced. The reduced Award shall equal the number of Performance
Shares originally granted multiplied by a fraction the numerator of which is the
number of Initial Fiscal Year months which occur prior to retirement and the
denominator of which is 12. For example, assuming a calendar fiscal year, if the
original Award was for 1,000 Performance Shares and the Participant retired on
April 1 of the Initial Fiscal Year, the size of the Award would be reduced by
75% to 250 Performance Shares, with the payment of such 250 Performance Shares
remaining subject to the applicable Performance Conditions for the full Award
Period and the remaining 750 Performance Shares being forfeited.

8.4 Consulting, Non-Compete and Confidentiality

A Participant’s entitlement, if any, to payout of Performance Share Awards
subsequent to termination of employment with Energen and all Subsidiaries shall
continue so long as the Participant is in compliance with the following
requirements. Failure to comply shall result in forfeiture of all then
outstanding Performance Share Awards.

(a) Consulting Services. For a period of three years following the termination
of the Participant’s employment (“Date of Termination”), Participant will fully
assist and cooperate with Energen, the Subsidiaries and their representatives
(including outside auditors, counsel and consultants) with respect to any
matters with which the Participant was involved during the course of employment,
including being available upon reasonable notice for interviews, consultation,
and litigation preparation. Except as otherwise agreed by Participant,
Participant’s obligation under this Section 8(a) shall not exceed 80 hours
during the first year and 20 hours during each of the following two years. Such
services shall be provided upon request of Energen and the Subsidiaries but
scheduled to accommodate Participant’s reasonable scheduling requirements.
Participant shall receive no additional fee for such services but shall be
reimbursed all reasonable out-of-pocket expenses.

(b) Non-Compete. For a period of twelve months following the Date of
Termination, unless otherwise expressly approved in writing by Energen, the
Participant shall not Compete, (as defined below) or assist others in Competing
with Energen and the Subsidiaries. For purposes of this Agreement, “Compete”
means (i) solicit in competition with Alabama Gas Corporation (“Alagasco”) any
person or entity which was a customer of Alagasco at the Date of Termination;
(ii) offer to acquire any local gas distribution system in the State of Alabama;
or (iii) offer to acquire any oil or gas mineral interest in the State of
Alabama. Employment by, or an

 

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investment of less than one percent of equity capital in, a person or entity
which Competes with Energen or the Subsidiaries does not constitute Competition
by Participant so long as Participant does not directly participate in, assist
or advise with respect to such Competition.

(c) Confidentiality. Participant agrees that at all times following the Date of
Termination, Participant will not, without the prior written consent of Energen,
disclose to any person, firm or corporation any confidential information of
Energen or the Subsidiaries which is now known to Participant or which hereafter
may become known to Participant as a result of Participant’s employment, unless
such disclosure is required under the terms of a valid and effective subpoena or
order issued by a court or governmental body; provided, however, that the
foregoing shall not apply to confidential information which becomes publicly
disseminated by means other than a breach of this provision.

8.5 No Assignment of Interest

The interest of any person in the Plan shall not be assignable, either by
voluntary assignment or by operation of law, and any assignment of such
interest, whether voluntary or by operation of law, shall render the Award void.
Amounts payable under the Plan shall be transferable only by will or by the laws
of descent and distribution.

9. 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 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.

10. Performance Measures. At its discretion, the Committee may make the Awards
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 10, 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;

 

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  (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

11. 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.

12. 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.

13. Change in Control. This Section 13 applies only with respect to Awards
granted prior to January 1, 2010. A Change in Control shall not constitute an
“Acceleration Event” with respect to any Award granted on or after January 1,
2010.

 

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13.1 Acceleration Event. For purposes of this Section 13, “Acceleration Event”
means the occurrence of a Change in Control described in clauses (2), (3), (4),
or (5)(i) of the Section 1(e) definition of Change in Control.

13.2 Options, Restricted Stock. Except as may be otherwise expressly provided in
the applicable Award agreement, upon the occurrence of an Acceleration Event,
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. (Also see Sections
1(w)(5), 6.2(e) and 7.2(c))

13.3 Performance Shares.

(a) Payment Acceleration. If an Acceleration Event occurs, all outstanding
Performance Share Awards shall be valued as soon after the date of such
Acceleration Event as practicable. Valuation of the Performance Share awards
shall be based on satisfaction of the applicable performance conditions measured
as if all Award Periods had ended at the close of Energen’s last whole fiscal
year prior to the date of the Acceleration Event, provided that for purposes of
any performance conditions involving the price of the Common Stock or payment of
dividends, stock shall be priced equal to its Measurement Value based on the
twenty trading days immediately preceding the date of such Acceleration Event
and the period for dividend measurement shall extend to and include the day
immediately prior to the date of the Acceleration Event. As soon as practicable
following the completion of such valuation, all outstanding Performance Share
Awards shall be paid based on such valuation.

(b) Independent Auditor. Following an Acceleration Event, all calculations with
respect to performance measurement and Award payment shall be made by the
Independent Auditor at the expense of Energen. The Independent Auditor shall
resolve any procedural ambiguities discovered in making such calculations using
its own judgment and discretion in light of the purposes of the Plan and past
practices in calculating Performance Share Award payments.

13.4 Payment of Professional Fees and Expenses. If a Change in Control occurs,
Energen shall pay promptly as incurred all legal, accounting and other
professional fees and expenses (collectively, “Professional Fees”) which a
Participant may reasonably incur as a result of any contest (regardless of the
outcome thereof) by Energen, Participant or others of the validity or
enforceability of, or liability under, any provision of the Plan (including as a
result of any contest by Executive about the amount of any payment pursuant to
the Plan), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code. In addition
Energen shall promptly pay to Participant an additional amount (the “Tax
Reimbursement Payment”) such that the net amount retained by the Participant
with respect to all payments made under this paragraph 13.4 after deduction of
Taxes, shall be equal to the amount of the Professional Fees reimbursement plus
applicable interest. For purposes of this Section 13.4, “Taxes” means all
federal, state and local, employment and income taxes payable or withheld with
respect to Professional Fees reimbursement payments (excluding interest) and Tax
Reimbursement payments. The Independent Auditor, at Energen’s expense, shall
make all calculations with respect to the Tax Reimbursement Payment and in
making such calculations shall assume that Participant is subject to the highest
marginal tax rates.

 

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14. Amendment and Discontinuance. The Board of Directors of Energen may from
time to time amend, suspend or discontinue the Plan. Subject to Section 18,
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.

15. 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.

16. Name. The Plan shall be known as the “Energen Corporation 1997 Stock
Incentive Plan.”

17. 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.

18. Effect of Code Section 409A. Payments and benefits under this Plan are
intended to comply with Section 409A of the Code (“Code Section 409A”) and all
provisions of the Plan shall be interpreted in accordance with Code 409A and
Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued after the date hereof. Notwithstanding any provision of the
Plan to the contrary, in the event that Energen determines that any payments or
benefits may or do not comply with Section 409A, Energen may amend the Plan
(without Participant consent) or take any other actions that Energen determines
are necessary or appropriate to (i) exempt the payments or benefits hereunder
from the application of Code Section 409A or preserve the intended tax treatment
of the payments and benefits provided hereunder, or (ii) comply with the
requirements of Code Section 409A.

 

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