Document:

Exhibit

Form of Executive Severance Agreement

EXHIBIT 10(a)

EXECUTIVE SEVERANCE AGREEMENT

THIS EXECUTIVE SEVERANCE AGREEMENT (this “Agreement”) is made and entered into, as of [•], 20__ (the “Effective Date”), by and between Energen Corporation, an Alabama corporation (the “Company”), and [•] (“Executive”).
WHEREAS, Executive serves as an effective and valuable employee of the Company and its Affiliates;
WHEREAS, the Company  and its Affiliates desire to retain the services of Executive and believes that setting forth the terms and conditions that would apply in the event of a termination of Executive’s service prior to a Change in Control (as defined in the CIC Severance Agreement) would promote retention by lessening uncertainty for Executive; and
WHEREAS, the Company and Executive desire to enter into this Agreement to set forth the terms that would apply upon a termination of Executive’s service with the Company and its Affiliates.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:
1.Definitions.  As used in this Agreement, the following terms, when capitalized, shall have the meanings given below:
(a)“Affiliate” shall mean an entity controlled by, controlling or under common control with the Company.
(b)“Annual Incentive Plan” shall mean the Energen Corporation Annual Incentive Compensation Plan (or any successor thereto).
(c)“Board” shall mean the Board of Directors of the Company.
(d)“CIC Severance Agreement” shall mean the Severance Compensation Agreement (relating to termination of employment following a change in control), dated as of [•], between the Company and Executive (as it may be amended from time to time) or any successor agreement or plan thereto.
(e)“Code” shall mean the Internal Revenue Code of 1986, as amended, and any Treasury regulations promulgated or other Treasury guidance thereunder.
(f)“Committee” shall mean the Compensation Committee of the Board.
(g)“Retirement” shall have the meaning set forth in the Stock Plan.
(h)“Stock Plan” shall mean the Energen Corporation Stock Incentive Plan (as it may be amended from time to time) or any successor thereto.
2.Term.  This Agreement shall be effective for the period commencing on the Effective Date and ending on [•], 20[•] (the “Term”). 

    

3.Termination of Employment.
(a)Death or Disability.  Executive’s employment shall terminate automatically upon Executive’s death during the Term.  If the Board determines in good faith that the Disability (as defined below) of Executive has occurred during the Term, it may provide Executive with written notice in accordance with Section 10(b) of its intention to terminate Executive’s employment.  In such event, Executive’s employment with the Company and its Affiliates shall terminate effective on the 30th day after Executive’s receipt of such notice (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full‐time performance of Executive’s duties.  For purposes of this Agreement, “Disability” shall mean the absence of Executive from Executive’s duties with the Company on a full‐time basis for 120 consecutive days, or for 180 days (which need not be consecutive) within a 365-day period, as a result of incapacity due to mental or physical illness that (i) is determined to be total and permanent by a physician selected by the Company or its insurers and reasonably acceptable to Executive or Executive’s legal representative and (ii) entitles Executive to disability benefits under the Company’s long-term disability plan in effect on the Date of Termination.
(b)With or Without Cause.  The Company may terminate Executive’s employment during the Term either with or without Cause.  For purposes of this Agreement, “Cause” shall mean:
(i)The willful and continued failure of Executive to substantially perform Executive’s duties with the Company and its Affiliates (other than any such failure resulting from Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to Executive specifically identifying the manner in which Executive has not substantially performed Executive’s duties;
(ii)The engaging by Executive in willful misconduct that is demonstrably injurious to the Company and its Affiliates monetarily or otherwise; or
(iii)The conviction of Executive of a felony.

For purposes of this provision, no act or failure to act, on the part of Executive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Company and its Affiliates.  If an action or omission constituting Cause is curable, Executive may be terminated under such clauses only if Executive has not cured such action or omission within 30 days following written notice thereof from the Company (the “Executive Cure Period”).  Further, Executive shall not be deemed to be discharged for Cause unless and until there is delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than two-thirds of the entire membership of the Board (excluding Executive, if he is then a member of the Board), at a meeting called and duly held for such purpose, finding in good faith that Executive is guilty of the conduct set forth above and specifying the particulars thereof in detail.  If the Company becomes the subsidiary of another entity, such determination shall be made by the board of directors (or equivalent governing body) of the ultimate parent entity of the Company or its successor.  Such determination shall be subject to de novo review by a court of law pursuant to the dispute resolution provisions of Section 10(a).
(c)With or Without Good Reason.  Executive’s employment may be terminated by Executive either with or without Good Reason.  For purposes of this Agreement, 

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“Good Reason” shall mean Executive’s voluntary resignation after any of the following actions are taken by the Company or any of its Affiliates without Executive’s written consent:
(i)The assignment to Executive by the Company or its Affiliates of duties inconsistent with Executive’s authority, duties and responsibilities with the Company and its Affiliates immediately prior to such assignment, or a change in Executive’s titles or offices as in effect immediately prior to such change, or a removal of Executive from, or any failure to re-elect or elect Executive to, any of such positions or comparable positions with the Company and its Affiliates, if such assignment, change or removal results in a material diminution in Executive’s authority, duties or responsibilities with the Company and its Affiliates as compared to Executive’s position with the Company and its Affiliates prior to such assignment, change or removal, or any other action by the Company or its Affiliates that results in a material diminution in Executive’s authority, duties or responsibilities;
(ii)A material diminution in Executive’s base salary or base compensation from that in effect prior to the diminution;
(iii)A failure by the Company or its Affiliates to provide short- and long-term incentive opportunities comparable to the opportunities available to Executive on the Effective Date, which failure results in a material diminution in the overall compensation payable to Executive;
(iv)A failure by the Company or its Affiliates to use their best efforts to provide Executive with either the same fringe benefits (including retirement benefits and paid vacations) as were provided to Executive on the Effective Date or a package of fringe benefits that, though one or more of such benefits may vary from those in effect on the Effective Date, is substantially comparable in all material respects to the fringe benefits (taken as a whole) in effect on the Effective Date, which failure results in a material diminution in the overall compensation payable to Executive;
(v)Executive’s relocation by the Company or its Affiliates to any place more than 50 miles from the location at which Executive performed the substantial portion of Executive’s duties on the Effective Date, except for required travel by Executive on the Company’s business to an extent substantially consistent with Executive’s business travel obligations on the Effective Date; or
(vi)Any material breach by the Company or its Affiliates of any provision of this Agreement or any other agreement between the Company or its Affiliates, on the one hand, and Executive, on the other hand.

In order to invoke a termination for Good Reason, Executive shall provide written notice to the Company of the existence of one or more of the conditions described in clauses (i) through (vi) within 90 days following Executive first becoming aware of the existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Company and its Affiliates shall have 30 days following receipt of such written notice (the “Company Cure Period”) during which it may remedy the condition.  In the event that the Company and its Affiliates fail to remedy the condition constituting Good Reason during the Company Cure Period, Executive’s “separation from service” (within the meaning of Section 409A of the Code) must occur, if at all, within 30 days following the expiration of such Company Cure Period in order for termination as a result of such condition to constitute a termination for Good Reason.

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(d)Notice of Termination.  Any termination by the Company with or without Cause, or by Executive with or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(b).  For purposes of this Agreement, a “Notice of Termination” shall mean a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) specifies the Date of Termination (as defined below), which date shall be not more than 30 days after the delivery of such notice.
(e)Date of Termination.  “Date of Termination” means (i) if Executive’s employment is terminated by the Company with Cause, or by Executive with Good Reason, the date of receipt of the Notice of Termination or any later date specified therein within 30 days following such notice, (ii) if Executive’s employment is terminated by the Company without Cause, or by Executive without Good Reason, the 30th day following receipt of the Notice of Termination or, if later, the expiration of the Executive Cure Period or Company Cure Period, as applicable,  or (iii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of Executive or the Disability Effective Date, as the case may be.
4.Obligations of the Company upon Termination.  (a)  Good Reason; Other Than for Cause, Death or Disability.  Subject to Section 4(b), if, during the Term, the Company terminates Executive’s employment other than for Cause, death or Disability, or Executive terminates employment for Good Reason, then, solely with respect to the payments and benefits provided under Sections 4(a)(iii), (iv), (v) and (vi)(A), subject to Executive’s execution within 50 days following the Date of Termination, and non-revocation, of a release of claims in the form attached as Exhibit A (the “Release”), the Company and its Affiliates shall pay to Executive the following:
(i)the sum of (A) the portion of Executive’s base salary due for the period through the Date of Termination to the extent not theretofore paid and (B) Executive’s business expenses that have not been reimbursed by the Company as of the Date of Termination that were incurred by Executive on or prior to the Date of Termination (the sum of the amounts described in clauses (A) and (B) shall be hereinafter referred to as the “Accrued Obligations”), which Accrued Obligations shall be paid in a lump sum in cash on the regular payment date of the Company or its applicable Affiliate for the payroll period in which the Date of Termination occurs;
(ii)any annual bonus or incentive compensation (an “Annual Bonus”) earned by Executive in respect of the fiscal year of the Company that was completed on or prior to the Date of Termination but that is unpaid as of the Date of Termination (the “Unpaid Annual Bonus”), which Unpaid Annual Bonus shall be paid in a lump sum in cash at the same time that the Annual Bonuses in respect of such fiscal year are paid to other senior executives of the Company and in no event later than March 15 following the fiscal year to which the Unpaid Annual Bonus relates (other than any portion of such Unpaid Annual Bonus that was deferred, which portion instead shall be paid in accordance with the applicable deferral arrangement and any election thereunder); provided that, if the amount of the Unpaid Annual Bonus has not been determined as of immediately prior to the Date of Termination, the amount thereof shall be determined by the Committee based on actual performance for the fiscal year 

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in which the Date of Termination occurs on a basis no less favorable than the basis on which Annual Bonus determinations are made by the Committee for other senior executives of the Company in respect of such fiscal year; provided, further, that individual or subjective performance metrics, if any, shall be deemed satisfied at the target level and in no event shall negative discretion be exercised based on individual performance);
(iii)a prorated Annual Bonus in respect of the fiscal year of the Company in which the Date of Termination occurs, with such amount to equal the product of (A) Executive’s target Annual Bonus opportunity for the fiscal year in which the Date of Termination occurs (or, if necessary for the Annual Bonus to be deductible by the Company under Section 162(m) of the Code, the amount determined by the Committee based on actual performance for the fiscal year in which the Date of Termination occurs on a basis no less favorable than the basis on which Annual Bonus determinations are made by the Committee for other senior executives of the Company in respect of such fiscal year, provided that individual or subjective performance metrics, if any, shall be deemed satisfied at the target level and in no event shall negative discretion be exercised based on individual performance), and (B) a fraction, (I) the numerator of which is the number of days in the fiscal year of the Company in which the Date of Termination occurs through and including the Date of Termination, and (II) the denominator of which is 365 (the “Prorated Annual Bonus”), which Prorated Annual Bonus shall be paid in a lump sum in cash within 60 days following the Date of Termination (or, if the Prorated Annual Bonus is based on actual performance in order for the Annual Bonus to be deductible by the Company under Section 162(m) of the Code, the date on which the Company otherwise pays Annual Bonuses to senior executives of the Company for such fiscal year), other than any portion of such Annual Bonus that was deferred, which portion instead shall be paid in accordance with the applicable deferral arrangement and any election thereunder;
(iv)an amount equal to the product of (A) [2.0] [1.5] [1.0] multiplied by (B) [the sum of (x)] Executive’s annual rate of base salary [and (y) Executive’s target Annual Bonus opportunity as in effect for the fiscal year of the Company in which the Date of Termination occurs (or, if not established or if higher, Executive’s target Annual Bonus opportunity for the immediately preceding fiscal year of the Company)], which amount shall be payable in a lump sum within 60 days following the Date of Termination[; provided that, for purposes of the foregoing, if Executive’s applicable target Annual Bonus opportunity would have been prorated for any reason, the amount of Executive’s target Annual Bonus opportunity shall be annualized];
(v)an amount equal to the product of (A) [24] [18] [12] multiplied by (B) the full monthly premium cost of health care continuation coverage under Section 4980B of the Code (“COBRA”), based on the prevailing rate charged by the Company to persons who elect health care continuation coverage under COBRA at a level equivalent to Executive’s level of health care coverage as of immediately prior to the Date of Termination, which amount shall be payable in a lump sum within 60 days following the Date of Termination;
(vi)If Executive is (A) not eligible for Retirement on the Date of Termination, Executive’s termination of employment by the Company other than for Cause, death or Disability, or by Executive for Good Reason, shall be deemed a “Qualified Termination” for purposes of the Stock Plan and all award agreements governing awards granted thereunder that are held by Executive on the Date of Termination, or (B) eligible for 

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Retirement on the Date of Termination, Executive’s termination of employment by the Company other than for Cause, death or Disability, or by Executive for Good Reason, shall be deemed a “Retirement” for purposes of the Stock Plan and all award agreements granted thereunder that are held by Executive on the Date of Termination; and
(vii)to the extent not theretofore paid or provided, the Company and its Affiliates shall timely pay or provide, in accordance with the terms of the applicable plan, program, policy, practice or contract, to Executive any other amounts or benefits required to be paid or provided or that Executive is eligible to receive under any plan, program, policy, practice or contract of the Company or its Affiliates through the Date of Termination (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

For the avoidance of doubt, if applicable, any amount payable pursuant to Section 4(a) shall be determined without regard to any reduction in compensation or benefits that resulted in Executive’s termination of employment for Good Reason.  If Executive does not execute the Release within 50 days following the Date of Termination, or if Executive revokes the Release prior to it becoming effective in accordance with its terms, Executive shall not be entitled to the compensation and benefits contemplated pursuant to Sections 4(a)(iii), (iv), (v) and (vi)(A).
(b)Change-in-Control Termination.  If Executive experiences a “Qualified Termination” (as defined in the CIC Severance Agreement) during the Term, subject to Section 10(e), this Agreement shall terminate without further obligations to Executive under this Agreement, other than for the payment of the Accrued Obligations and the Unpaid Annual Bonus and the timely payment or provision of the Other Benefits, and in lieu of the other compensation and benefits contemplated by this Section 4, Executive instead shall be entitled to the compensation and benefits in accordance with the CIC Severance Agreement.
(c)Death; Disability.  If Executive’s employment is terminated by reason of Executive’s death or Disability during the Term, subject to Section 10(e), this Agreement shall terminate without further obligations to Executive under this Agreement, other than for payment of the Accrued Obligations and the Unpaid Annual Bonus and the timely payment or provision of the Other Benefits.  The Accrued Obligations and the Unpaid Annual Bonus shall be paid to Executive’s estate (in the event of death) or Executive or his legal representative (in the event of Disability), as applicable, on the same schedule as contemplated by Sections 4(a)(i)-(ii).
(d)Other Termination.  If Executive’s employment is terminated during the Term for a reason other than those governed by Section 4(a), (b) or (c), subject to Section 10(e), this Agreement shall terminate without further obligations to Executive under this Agreement, other than for payment of the Accrued Obligations on the same schedule as contemplated by Sections 4(a)(i) and the timely payment or provision of the Other Benefits.
(e)Full Settlement.  The payments and benefits provided under this Section 4 shall be in full satisfaction of the obligations of the Company and its Affiliates to Executive upon Executive’s termination of employment under this Agreement.  For the avoidance of doubt, nothing in this Agreement shall limit Executive’s rights or entitlements upon a termination of employment due to death, Disability or Retirement or in connection with a change in control under the Annual Incentive Plan or the Stock Plan (it being understood that the occurrence of “disability” under the Annual Incentive Plan and the Stock Plan shall be determined in the same manner as a Disability under this Agreement).  Further, if on the Date of Termination Executive has satisfied the requirements for retirement treatment under another benefit plan, agreement, 

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arrangement or policy of the Company or its Affiliates in which Executive is eligible for compensation and benefits (including the Annual Incentive Plan or Stock Plan), in no event (other than Executive’s termination of employment for Cause) shall Executive receive compensation or benefits thereunder as a result of Executive’s termination of employment on terms less favorable than those that would apply under such benefit plan, agreement, arrangement or policy upon Executive’s retirement.  In addition, if Executive is entitled to the same payment or benefit under this Agreement and another benefit plan, agreement, arrangement or policy of the Company or its Affiliates, such payment or benefit shall be provided on whichever terms are more favorable to Executive; it being understood that, notwithstanding the foregoing, in no event shall the terms of this Agreement alter the payment timing of any such payment or benefit that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code, in a manner that would result in the imposition of taxes or penalties under Section 409A of the Code.
(f)Subsequent Change in Control.  In the event that within one year following the Date of Termination of Executive either by the Company without Cause or by the Executive for Good Reason there occurs a “Change in Control” (as defined in the CIC Severance Agreement), then Executive shall be treated as having been terminated in a “Qualified Termination” (as defined in the  CIC Severance Agreement) and shall be entitled to be paid or receive such amounts and benefits in addition to the amounts and benefits received by Executive pursuant to this Agreement as may be required to provide Executive with the amounts and benefits Executive would have received, without duplication, had Executive been terminated in a Qualified Termination under the provisions of the CIC Severance Agreement on the Date of Termination under this Agreement.
5.No Mitigation; No Offset.  In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of any amounts payable to Executive under Section 4 and such amounts shall not be reduced whether or not Executive obtains other employment.  The Company’s and its Affiliates’ obligation to make the payments or benefits provided for in this Agreement and otherwise to perform their obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action that the Company or any of its Affiliates may have against Executive or others.
6.Continuing Obligations of Executive.  As a result of, and in connection with, Executive’s employment by the Company and its Affiliates, Executive is involved in a number of matters of strategic importance and value to the Company and its Affiliates including various projects, proceedings, planning processes and negotiations. Any number of these matters may be ongoing and continuing after the Date of Termination. In addition, Executive is privy to proprietary and confidential information of the Company and its Affiliates including without limitation, financial information and projections, business plans and strategies, customer and vendor lists and information, and oil and gas properties and prospects.  Accordingly, Executive agrees as follows:
(a)  Non-Compete. For a period of 12 months following the Date of Termination, unless otherwise expressly approved in writing by the Company, Executive shall not Compete (as defined below) or assist others in Competing with the Company or its subsidiaries. For purposes of this Agreement, “Compete” shall mean offer to acquire any oil or gas mineral interest or leasehold interest (i) within acreage subject to a mineral interest, leasehold interest or unit of the Company or its subsidiaries or (ii) contiguous to such acreage.  

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Employment by, or an investment of less than one percent of equity capital in, a person or entity that Competes with the Company or its subsidiaries shall not constitute Competition by Executive so long as Executive does not directly participate in, assist or advise with respect to such Competition.
(b)Non-Solicitation. For a period of 12 months following the Date of Termination, unless otherwise expressly approved in writing by the Company, Executive shall not directly or indirectly recruit, solicit the employment or services of, or induce employees of the Company or one of its subsidiaries to terminate such employment; provided, however, that nothing herein shall prohibit a general solicitation not directed to employees of the Company or its subsidiaries.
(c)Confidentiality. Executive agrees that at all times following the Date of Termination, Executive shall not, without the prior written consent of the Company, disclose to any person, firm or corporation any confidential information of the Company or its subsidiaries that is now known to Executive or that hereafter may become known to Executive as a result of Executive’s employment or association with the Company or its subsidiaries, 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 that becomes publicly disseminated by means other than a breach of this Agreement.
(d)Non-Disparagement.  Executive shall not make any statements that disparage the Company or its Affiliates, or the business practices of Company or its Affiliates, except to the extent required (i) by law or by a court or other governmental agency of competent jurisdiction, (ii) to exercise any legally protected whistleblower rights (including pursuant to Rule 21F under the Securities Exchange Act of 1934), or (iii) to enforce Executive’s rights under this Agreement or any other benefit plan, agreement, arrangement or policy of the Company or its Affiliates.  The Company and its Affiliates shall not make any statements that disparage Executive, and the Company shall instruct its directors and officers not to make any statements that disparage Executive.
(e)Whistleblower Exceptions. Executive understands and acknowledges that nothing contained in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any federal, state or local governmental agency or commission, or communicating with or otherwise participating in any investigations or proceedings that are protected under the whistleblower provisions of federal law or regulation. Executive shall not be required to provide notice to the Company of, or receive prior authorization from the Company for, any such communications or disclosures. This Agreement does not limit Executive’s right to receive an award for information provided to any such governmental agency or commission.
(f)Trade Secrets.  The Company hereby informs Executive that, notwithstanding any provision of this Agreement to the contrary, an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.  Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual files 

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any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.
7.Payment of Professional Fees and Expenses. The Company shall pay promptly as incurred, to the full extent permitted by law, all legal, accounting and other professional fees and expenses that Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or its Affiliates, Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement).
8.Successors.   This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive other than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.  This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its businesses and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.
9.Indemnification.  The Company and its Affiliates shall indemnify Executive and hold Executive harmless to the fullest extent permitted by the laws of the State of Alabama against and in respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses, losses or damages resulting from Executive’s performance of Executive’s duties and obligations with the Company and its Affiliates.  The Company and its Affiliates shall cover Executive under directors’ and officers’ liability insurance both during and, while potential liability exists, after employment in the same amount and to the same extent as the Company and its Affiliates cover their other officers and directors and in no event on terms less favorable than those in effect on the Effective Date.  These obligations shall survive the termination of Executive’s employment with the Company and its Affiliates.  If any proceeding is brought or threatened against Executive in respect of which indemnity may be sought against the Company and its Affiliates pursuant to the foregoing, Executive shall notify the Company promptly in writing of the institution of such proceeding and the Company and its Affiliates shall assume the defense thereof and the employment of counsel and payment of all fees and expenses; provided, however, that if a conflict of interest exists between the Company and its Affiliates, on the one hand, and Executive, on the other hand, such that it is not legally practicable for the Company and its Affiliates to assume Executive’s defense, Executive shall be entitled to retain separate counsel and the Company and its Affiliates shall assume payment of all fees and expenses of such counsel in accordance with Section 7.  For the avoidance of doubt, the obligations of the Company and its Affiliates under this Section 9 are in addition to any obligations of the Company or its Affiliates to indemnify Executive or to cover Executive under directors’ and officers’ liability insurance under the bylaws of the Company or its Affiliates.
10.Miscellaneous.  (a)  Governing Law and Dispute Resolution.  This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama, without reference to principles of conflict of laws.  The parties irrevocably submit to the jurisdiction of any state or federal court sitting in or for Birmingham, Alabama with respect to any dispute arising out of or relating to this Agreement or the Release, and each party irrevocably agrees that all claims in respect of such dispute or proceeding shall be heard and 

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determined in such courts.  The parties hereby irrevocably waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to the venue of any dispute arising out of or relating to this Agreement or the transactions contemplated hereby brought in such court or any defense of inconvenient forum for the maintenance of such dispute or proceeding.  Each party agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTER CLAIM BROUGHT OR ASSERTED BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT.
(b)Notices.  All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Executive:  To the most recent address on file with the Company.
If to the Company:

Vice President - Administration
Energen Corporation
605 Richard Arrington Jr., Boulevard North
Birmingham, Alabama 35203
Attention: Chairman

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.
(c)Acknowledgements.  Prior to execution of this Agreement, Executive was advised by the Company of Executive’s right to seek independent advice from an attorney of Executive’s own selection regarding this Agreement.  Executive acknowledges that he has entered into this Agreement knowingly and voluntarily and with full knowledge and understanding of the provisions of this Agreement after being given the opportunity to consult with counsel.  Executive further represents that, in entering into this Agreement, Executive is not relying on any statements or representations made by any of the directors, officers, employees or agents of the Company that are not expressly set forth herein, and that Executive is relying only upon Executive’s own judgment and any advice provided by Executive’s attorney.
(d)Invalidity.  If any term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

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(e)Survivability.  The provisions of this Agreement that by their terms call for performance subsequent to the termination of either Executive’s employment or this Agreement (including the terms of Sections 4, 5, 6, 7 and 9) shall so survive such termination.
(f)Section Headings; Construction. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation hereof.  For purposes of this Agreement, the term “including” shall mean “including, without limitation.”
(g)Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.
(h)Tax Withholding.  The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(i)Section 409A.
i.General.  It is intended that payments and benefits made or provided under this Agreement shall not result in penalty taxes or accelerated taxation pursuant to Section 409A of the Code.  Any payments that qualify for the “short-term deferral” exception, the separation pay exception or another exception under Section 409A of the Code shall be paid under the applicable exception.  For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation.  All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A of the Code to the extent necessary in order to avoid the imposition of penalty taxes on Executive pursuant to Section 409A of the Code.  In no event may Executive, directly or indirectly, designate the calendar year of any payment under this Agreement, and to the extent required by Section 409A of the Code, any payment that may be paid in more than one taxable year (depending on the time that Executive executes the Release) shall be paid in the later taxable year.
ii.Reimbursements and In-Kind Benefits.  Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this Agreement that are subject to Section 409A of the Code shall be made in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (B) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (C) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (D) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
iii.Delay of Payments.  Notwithstanding any other provision of this Agreement to the contrary, if Executive is considered a “specified employee” for purposes of Section 409A of the Code (as determined in accordance with the methodology established by the Company and its Affiliates as in effect on the Termination Date), any payment that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code that is otherwise due to Executive under this Agreement during the six-month period 

-11-

immediately following Executive’s separation from service (as determined in accordance with Section 409A of the Code) on account of Executive’s separation from service shall be accumulated and paid to Executive on the first business day of the seventh month following his separation from service (the “Delayed Payment Date”), to the extent necessary to prevent the imposition of tax penalties on Executive under Section 409A of the Code.  If Executive dies during the postponement period, the amounts and entitlements delayed on account of Section 409A of the Code shall be paid to the personal representative of his estate on the first to occur of the Delayed Payment Date or 30 calendar days after the date of Executive’s death.
(j)Amendments.  No provision of this Agreement shall be modified or amended except by an instrument in writing duly executed by the parties hereto.  No custom, act, payment, favor or indulgence shall be deemed a waiver by the Company of any of Executive’s obligations hereunder or release Executive therefrom.  No waiver by any party of any breach by the other party of any term or provision hereof shall be deemed to be an assent or waiver by any party to or of any succeeding breach of the same or any other term or provision.
(k)Entire Agreement.  This Agreement, together with the CIC Severance Agreement, the Annual Incentive Plan and the Stock Plan and the award agreements issued thereunder, constitutes the entire agreement of the parties hereto with respect to the terms and conditions governing the possible termination of Executive’s employment with the Company and its Affiliates, and, as of the Effective Date, supersedes and cancels in their entirety all prior understandings, agreements and commitments, whether written or oral, relating to the terms and conditions of employment between Executive, on the one hand, and the Company or its Affiliates, on the other hand.  For the avoidance of doubt, this Agreement does not limit the terms of any benefit plans (including the Annual Incentive Plan and the Stock Plan) of the Company or its Affiliates that are applicable Executive, except to the extent that the terms of this Agreement are more favorable to Executive.

[Signature page follows]

        

-12-

IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and each of the Company, pursuant to the authorization from its board of directors, has caused these presents to be executed in its name on its behalf, all as of the date first above written.
 
[Name]

ENERGEN CORPORATION
 
Name: 
Title:

[Signature Page to Executive Severance Agreement]

Exhibit A

GENERAL RELEASE OF CLAIMS
THIS GENERAL RELEASE OF CLAIMS (this “Release”) is executed by [●] (“Executive”) as of the date set forth on the signature page hereto.  For purposes of this Release, reference is made to the Executive Severance Agreement (the “Executive Severance Agreement”) between Energen Corporation (the “Company”) and Executive, dated as of [●], 20[●].  Terms that are capitalized but not defined herein shall have the meanings set forth in the Executive Severance Agreement.
		
	1.
	General Release and Waiver of Claims.

(a)Release.  In consideration of the payments and benefits afforded under the Executive Severance Agreement, and after consultation with counsel, Executive and each of Executive’s respective heirs, executors, administrators, representatives, agents, successors and assigns (collectively, the “Releasors”) hereby irrevocably and unconditionally release and forever discharge the Company and its Affiliates and each of its officers, employees, directors and agents (“Releasees”) from any and all claims, actions, causes of action, rights, judgments, obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, “Claims”) that the Releasors may have arising out of Executive’s employment relationship with and service as an employee, officer or director of the Company and its Affiliates, and the termination of any such relationship or service, in each case up to and including the date Executive executes this Release.  Executive acknowledges that the foregoing sentence includes Claims arising under federal, state or local laws, statutes, orders or regulations that relate to the employment relationship or prohibiting employment discrimination, including Claims under Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; Sections 1981 through 1988 of Title 42 of the United States Code; the Employee Retirement Income Security Act of 1974; the Immigration Reform and Control Act; the Sarbanes-Oxley Act of 2002; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act; the Equal Pay Act; the Fair Credit Reporting Act; Occupational Safety and Health Act; the federal Fair Labor Standards Act; the Alabama Industrial Relations and Labor Code; and any other federal, state or local civil, human rights, bias, whistleblower, discrimination, retaliation, compensation, employment, labor or other local, state or federal law, regulation or ordinance.  
(b)Exceptions to Release.  Notwithstanding anything contained herein to the contrary, this Release specifically excludes and shall not affect: (i) the obligations of the Company or its Affiliates set forth in the Executive Severance Agreement and to be performed after the date hereof, including without limitation under in Sections 4, 5, 6(d), 7 and 9 thereof, or under any other benefit plan, agreement, arrangement or policy of the Company or its Affiliates that is applicable to Executive and that, in each case, by its terms, contains obligations that are to be performed after the date hereof by the Company or its Affiliates; (ii) any indemnification or similar rights Executive has as a current or former officer, director, employee or agent of the Company or its Affiliates, including, without limitation, any and all rights thereto under applicable law, the certificate of incorporation, bylaws or other governance documents or such entities, or any rights with respect to coverage under any directors’ and officers’ insurance policies and/or indemnification agreements; (iii) any Claim the Releasors may have as the holder 

or beneficial owners of securities of the Company or its Affiliates or other rights relating to securities or equity awards in respect of the common stock of the Company or its Affiliates; (iv) rights to accrued but unpaid salary, paid time off, vacation or other compensation due through the date of termination of employment; (v) any unreimbursed business expenses; (vi) benefits or the right to seek benefits under applicable workers’ compensation and/or unemployment compensation statutes; (vii) Claims related to the exercise of any legally protected whistleblower rights (including under Rule 21F under the Securities Exchange Act of 1934); and (viii) any Claims that may arise in the future from events or actions occurring after the date Executive executes this Release or that Executive may not by law release through an agreement such as this. 
(c)[Specific Release of ADEA Claims.  In further consideration of the payments and benefits provided to Executive under the Executive Severance Agreement, the Releasors hereby unconditionally release and forever discharge the Releasees from any and all Claims that the Releasors may have as of the date Employee signs this Release arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”).  By signing this Release, Executive hereby acknowledges and confirms the following:  (i) Executive was advised by the Company in connection with Executive’s termination of employment to consult with an attorney of Executive’s choice prior to signing this Release and to have such attorney explain to Executive the terms of this Release, including, without limitation, the terms relating to Executive’s release of claims arising under ADEA, and Executive has in fact consulted with an attorney; (ii) Executive was given a period of not fewer than [twenty-one (21)] [forty-five (45)] calendar days to consider the terms of this Release and to consult with an attorney of Executive’s choosing with respect thereto; and (iii) Executive knowingly and voluntarily accepts the terms of this Release.  Executive also understands that Executive has seven (7) calendar days following the date on which Executive signs this Release within which to revoke the release contained in this Section 1(c), by providing the Company a written notice of Executive’s revocation of the release and waiver contained in this Section 1(c).]
(d)No Assignment.  Executive represents and warrants that Executive has not assigned any of the Claims being released under this Release.
2.Proceedings.  Executive has not filed, and agrees not to initiate or cause to be initiated on Executive’s behalf, any complaint, charge, claim or proceeding against the Releasees with respect to any Claims released under Section 1(a) or (c) before any local, state or federal agency, court or other body (each, individually, a “Proceeding”), and agrees not to participate voluntarily in any Proceeding involving such Claims; provided, however, and subject to the immediately following sentence, nothing set forth here in intended to or shall interfere with Executive’s right to participate in a Proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, nor shall this Release prohibit Executive from cooperating with any such agency in its investigation.  Executive waives any right Executive may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Proceeding involving such Claims, provided that the foregoing shall not apply to, and nothing in this Release shall prevent Executive from exercising, any legally protected whistleblower rights (including 

-A-2-

under Rule 21F under the Securities Exchange Act of 1934).  For the avoidance of doubt, the term Proceeding shall not include any complaint, charge, claim or proceeding with respect to the obligations of the Company to Executive under the Executive Severance Agreement or in respect of any other matter described in Section 1(b), and Executive retains all of Executive’s rights in connection with the same.
3.Severability Clause.  In the event any provision or part of this Release is found to be invalid or unenforceable, only that particular provision or part so found, and not the entire Release, will be inoperative.
4.No Admission.  Nothing contained in this Release will be deemed or construed as an admission of wrongdoing or liability on the part of the Releasees.
5.Governing Law and Venue.  All matters affecting this Release, including the validity thereof, are to be governed by, and interpreted and construed in accordance with, the laws of the State of Alabama applicable to contracts executed in and to be performed in that State.

6.Counterparts.  This Release may be executed in counterparts and each counterpart will be deemed an original.

7.Notices.  All notices, requests, demands or other communications under this Release shall be in writing and shall be deemed to have been duly given when delivered in person or deposited in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, to the party to whom such notice is being given as follows:
		
	As to Employee:
	Executive’s last address on the books and records of the Company 

		
	As to the Company:
	[ADDRESS AS OF DATE OF RELEASE]

Any party may change his, her or its address or the name of the person to whose attention the notice or other communication shall be directed from time to time by serving notice thereof upon the other party as provided herein.
EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS READ THIS RELEASE AND THAT EXECUTIVE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT EXECUTIVE HEREBY EXECUTES THE SAME AND MAKES THIS RELEASE AND THE RELEASE PROVIDED FOR HEREIN VOLUNTARILY AND OF EXECUTIVE’S OWN FREE WILL.

-A-3-

IN WITNESS WHEREOF, Executive has executed this Release on the date set forth below.

_________________________________
[Name]
Dated as of:  

-A-4-Exhibit

EXHIBIT 10(b)
ENERGEN CORPORATION
STOCK INCENTIVE PLAN    
(As Amended Effective November 7, 2017)

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 the meanings indicated:
		
	(a)
	“Adjusted Option Expiration Date” means:

		
	(1)
	in the event of a Qualified Termination due to Retirement, the earlier of the Expiration Date or the fifth anniversary of the termination date; 

		
	(2)
	in the event of a Change in Control Termination or a Qualified Termination not due to Retirement, the earlier of the Expiration Date or the third anniversary of the termination date; 

		
	(3)
	in the event of a termination of employment for Cause, immediately upon termination; and 

		
	(4)
	in the event of a termination of employment not described in the foregoing clauses, the earlier of the Expiration Date or the ninetieth day following termination.

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

		
	(c)
	“Award Agreement” means any written or electronic agreement, contract or other instrument or document evidencing one or more Awards and which may, but need not be (as determined by the Committee) executed or acknowledged by the applicable Participant(s) as a condition to receiving an Award or the benefits under an Award (provided that Awards of Incentive Stock Options must be executed or acknowledged by the Participants), and which sets forth the terms and provisions applicable to Awards granted under the Plan to such Participant(s).

		
	(d)
	“Award Period” means the 3-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 provided in the applicable Award Agreement and subject to the other provisions of this Plan.

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

Page 1 of 1

		
	(f)
	“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.

For purposes of this definition, no act or failure to act, on the part of Participant, shall be considered “willful” unless it is done, or omitted to be done, by Participant in bad faith or without reasonable belief that Participant’s action or omission was in the best interests of Energen and its Subsidiaries.

		
	(g)
	"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 13d-3 promulgated under the Exchange Act) of 30% 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, 2016, 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 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; or

Page 2 of 2

		
	(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, 30% 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. 

		
	(h)
	“Change in Control Termination” means termination of a Participant’s employment with Energen and all Subsidiaries under either of the following circumstances:

		
	(1)
	an involuntary termination (other than for Cause) after the occurrence of a Change in Control; or

		
	(2)
	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.

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

		
	(j)
	“Committee” means the Compensation Committee of the Board or such other Committee of two or more directors as may be determined by the Board. “Committee” also means the Committee’s delegate(s) acting under the authority of Section 5.

Page 3 of 3

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

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

		
	(m)
	“Exchange Act” means the Securities Exchange Act of 1934, as amended.

		
	(n)
	“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).

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

		
	(p)
	“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; provided that any valuation subject to Code Section 409A shall be made in accordance with Code Section 409A and the regulations thereunder.

		
	(q)
	“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.

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

		
	(s)
	“Participant” means an Employee to whom an Award is granted pursuant to the Plan, or if applicable, successors and assigns permitted under Section 11.

		
	(t)
	 “Performance Measures” has the meaning set forth in Section 9.

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

		
	(v)
	 “Plan” means this Energen Corporation Stock Incentive Plan, as amended from time to time.

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

		
	(1)
	A result of Participant’s Retirement.

		
	(2)
	A result of the Participant’s death or disability.

Page 4 of 4

		
	(3)
	Expressly agreed in writing by Energen and/or a Subsidiary to constitute a Qualified Termination for purposes of this Plan. 

		
	(x)
	“Restricted Award” means an Award of Restricted Stock or Restricted Stock Units.

		
	(y)
	“Restricted Stock” means Stock granted to a Participant under Section 7 with respect to which the applicable Restrictions have not lapsed or been removed.

		
	(z)
	“Restricted Stock Unit” means the right to receive one share of Stock upon the lapse or removal of the applicable Restrictions. 

		
	(aa)
	“Restrictions” means the prohibitions set forth in Section 7.2(a) against the sale, assignment, transfer, pledge, hypothecation and other encumbering or disposal of Restricted Stock and against the payment of Restricted Stock Units. 

		
	(bb)
	“Retirement” means:

		
	(1)
	with respect to Awards granted prior to January 1, 2017, termination of employment of or by a Participant (other than for Cause) who is at least 55 years old and has at least 10 years of service with Energen and its Subsidiaries; and

		
	(2) 
	with respect to Awards granted on or after January 1, 2017, termination of employment of or by a Participant (other than for Cause) who (i) is at least 55 years old and has at least 10 years of service with Energen and its Subsidiaries or (ii) is at least 62 years old and has at least 5 years of service with the Company and its Subsidiaries.

		
	(cc)
	“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.

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

		
	(ee)
	“Ten Percent Shareholder” means an individual who, at the time of grant, owns stock possessing more than ten (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 March 3, 2016, 1,882,581 shares of Stock were reserved and available for issuance under the Plan for 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, the 2005 stock split adjustment and 3,000,000 shares authorized at the April 2011 shareholder meeting, reduced by prior Awards).  Shares of Stock allocable to an 

Page 5 of 5

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.  Shares of Stock not issued as the result of the net exercise of a stock appreciation right, shares tendered by the Participant or retained by Energen as full or partial payment to Energen for the purchase of an Award or to satisfy tax withholding obligations in connection with an Award, or shares repurchased on the open market with the proceeds from the payment of an exercise price of an option shall not again be available for issuance under the Plan.
2.2    Limitations.  Subject to adjustment in accordance with Section 3, (i) 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 calculated assuming maximum payout of the Awards and with each Restricted Stock Unit and Performance Share representing one share of Stock; (ii) consistent with clause (i), the maximum number of shares of Stock represented by Awards of Stock Options granted to any one Participant during any one Energen fiscal year shall not exceed 400,000; and (iii) the maximum number of shares of stock represented by Incentive Stock Options granted after March 3, 2016, shall not exceed 1,882,581.  A Participant may be granted more than one Award during any Energen fiscal year.
3.    Adjustments in Event of Change in Common Stock.  In the event of any change in the Stock by reason of any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, 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 terms of outstanding Awards 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 including, but not limited to, Section 5 hereof, 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.

Page 6 of 6

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; provided, however, that the Committee may delegate to one or more officers of Energen and/or its Subsidiaries the authority to select and make Awards to Participants (who shall not include “covered employees” within the meaning of Code Section 162(m)(3), officers or directors of Energen or its Subsidiaries), provided that such delegation must be made pursuant to a resolution of the Committee specifying the maximum aggregate number of shares of Common Stock that may be subject to Awards by such officer(s). 
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; provided, however, that (i) no Incentive Stock Option shall be granted after the expiration of ten years from the ISO Effective Date as defined 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 an Award 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 Shareholder, such period, including extensions, shall not exceed five years from the date of grant.

		
	(b)
	Option Price, No Repricing. 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 Shareholder, 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 

Page 7 of 7

option is granted, as determined by the Committee.  Except as otherwise permitted by Section 3, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding options or stock appreciation rights or cancel outstanding options or stock appreciation rights in exchange for cash, other awards or options with an exercise price that is less than the exercise price of the original options or stock appreciation rights without shareholder approval.
		
	(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 10.   

		
	(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 Termination of Employment.  

		
	(1)
	Cause.  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. 

Page 8 of 8

		
	(2)
	Qualified Termination. In the event of a Qualified Termination, then all options held by the optionee with a grant date at least ten months prior to  the date of termination shall be immediately and fully vested and options with a grant date less than ten months prior to the date of termination shall immediately expire.

		
	(3)
	Change in Control Termination.  In the event of a Change in Control Termination, all options held by the optionee which were granted prior to the Change in Control shall be immediately and fully vested.

		
	(4)
	Other Termination.  In the event that an optionee’s employment by Energen and all Subsidiaries terminates for reason other than Cause, Qualified Termination or Change in Control Termination, then all of the optionee’s unvested options shall immediately expire.

		
	(5)
	Adjusted Option Expiration Date.  Following a termination of employment any vested options held by the terminated employee will expire on the applicable Adjusted Option Expiration Date.

		
	(6)
	Committee Authority. The foregoing provisions of this Section 6.2(e) notwithstanding, 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 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.  Furthermore, 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.

		
	(7)
	Options Granted Prior to January 31, 2012.  The other provisions of this Section 6.2(e) notwithstanding, the provisions of Section 6.2(e) of the Energen Corporation Stock Incentive Plan as Amended effective April 27, 2011, continue to control the manner in which options granted prior to January 31, 2012, will be treated upon a termination of employment.

		
	(f)
	Nontransferability.  Except as may otherwise be provided in this Section 6.2(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 

Page 9 of 9

(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 Energen for such a representation, the optionee shall deliver to Energen at the time of any exercise of an option or portion thereof or settlement of stock appreciation rights 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.  As provided in Section 6.1, no Incentive Stock Option shall be granted after the expiration of ten years from the ISO Effective Date as defined in Section 15.  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 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. 

Page 10 of 10

		
	(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)
	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.

		
	(k)
	Issuance of Shares.  Subject to Section 6.2(h), as soon as reasonably practicable after receipt of an exercise notice and full payment, Energen shall issue to the optionee the appropriate number of shares of Stock.

7.    Restricted Stock and Restricted Stock Units (Restricted Awards) 
7.1    Grant of Restricted Awards.  The Committee may make grants of Restricted Stock and/or Restricted Stock Units to Participants.  Each Restricted Award shall be evidenced by an Award Agreement setting forth the number of shares of Restricted Stock or number of Restricted Stock Units granted and the terms and conditions to which the Restricted Award is subject.  Restricted Awards may be granted by the Committee in its discretion with or without cash consideration.
7.2    Terms and Conditions of Restricted Stock.   
		
	(a)
	Restrictions. 

		
	(1)
	Restricted Stock. No shares of Restricted Stock may be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of until the Restrictions on such shares have lapsed or been removed. 

		
	(2)
	Restricted Stock Units.  Restricted Stock Units will not be payable until the Restrictions on payment of such Restricted Stock Units have lapsed or been removed. Upon the lapse or removal of Restrictions on Restricted Stock Units the Restricted Stock Units shall be settled by delivering to the Participant the number of shares of Stock equal to the number of Restricted Stock Units being settled.  

Page 11 of 11

		
	(b)
	Lapse.  The Committee shall establish as to each Restricted Award 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 Awards with a grant date at least ten months prior to the date of termination shall immediately lapse and Restricted Awards with a grant date less than ten months prior to the date of termination shall be forfeited and returned to Energen.  In the event of a Change in Control Termination, all Restrictions on the Participant’s outstanding Restricted Awards shall immediately lapse.  Should a Participant’s employment with Energen and all Subsidiaries terminate for any reason other than a Qualified Termination or a Change in Control Termination, all Restricted Awards 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 applicable Award agreement shall be controlling with respect to that Restricted Award.  

NOTE: early lapse of Restrictions on Restricted Stock Units may have Section 409A implications; see Section 18.

		
	(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 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 Performance Measures established by the Committee pursuant to Section 9.2 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, 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 shareholder rights with respect to Restricted Units.  A Participant shall have no rights of a shareholder, including voting, dividend or other 

Page 12 of 12

distribution rights, with respect to Restricted Stock Units prior to the date they are settled in shares of Stock.
		
	(g)
	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.

8.    Performance Shares 
8.1    Grant of Performance Shares.  The Committee may make grants of Performance Shares to Participants.  Each Performance Share Award shall be evidenced by an Award Agreement setting forth the number of Performance Shares granted and the terms and conditions to which the Performance Share Award is subject. 
8.2    Terms and Conditions of Performance Share Awards.  
		
	(a)
	General. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the Performance Measures to be achieved during the applicable Award Period, the number of shares of Stock subject to any Performance Share Award, and the amount of any payment to be made upon achievement of the Performance Measures applicable to any Performance Award.

		
	(b)
	No Right to Dividends. 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 shareholder 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 authorizes payment of Performance Shares pursuant to Section 8.3.

		
	(c)
	Settlement of Performance Share Awards.  Settlement of Performance Share Awards to any Participant shall be made in accordance with Section 8.3 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 on the date of grant.  The Committee may prescribe different conditions for different Participants.

8.3    Payment of Performance 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. Payment of Awards shall be made by Energen promptly following the determination by the Committee that payment has been 

Page 13 of 13

earned and by March 15 of the year following the year in which the Award is earned.  Payment of Performance Shares shall be made in the form of shares of Stock. 
8.4    Termination of Employment.  Except in the case of a Qualified Termination or a Change in Control 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 with a grant date at least ten months prior to the date of termination (subject to the 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.  Each of such outstanding Performance Share Awards shall be reduced to equal the number of Performance Shares originally granted, multiplied by a fraction the numerator of which is the number of months from the beginning of the applicable Award period to the termination date and the denominator of which is the number of months in the applicable Award Period.

In the event of a Change in Control Termination, a Participant shall within thirty days following termination receive payment of all outstanding Performance Share Awards measured at target performance.

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 applicable Award agreement shall be controlling with respect to that Performance Share Award.

8.5    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 8.5(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 

Page 14 of 14

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 offer to acquire any oil or gas mineral interest (A) within an oil or gas unit for which Energen or a Subsidiary is the operator of record or (B) within an oil or gas unit contiguous to an oil or gas unit for which Energen or a Subsidiary is the operator of record.   Employment by, or an 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.

		
	(d)
	Whistleblower Exceptions. Nothing contained in this Plan prohibits a Participant from reporting possible violations of federal law or regulations to any federal, state, or local governmental agency or commission, or communicating with or otherwise participating in any investigations or proceedings that are protected under the whistleblower provisions of federal law or regulation.  A Participant shall not be required to provide notice to Energen of, or receive prior authorization from Energen for, any such communications or disclosures. This Plan does not limit a Participant’s right to receive an award for information provided to any such governmental agency or commission.

9.    Performance Measures.  
9.1    General Performance Measures.  At its discretion, the Committee may make the Awards subject to the achievement or satisfaction of performance conditions (“Performance Measures”).  Subject to Section 9.2 below, the Committee may use such business criteria and other measures of performance as it deems appropriate in establishing Performance Measures.  Performance objectives set on a per share basis such as earnings or cash flow per share shall be appropriately adjusted to reflect changes in outstanding shares resulting 

Page 15 of 15

from stock dividends, splits or combinations or mergers, reorganizations or similar transactions.

9.2    Section 162(m) Performance Measures.  If the Committee intends for an Award to qualify for the performance-based exceptions from Section 162(m) of the Code, the selected Performance Measures shall be specific, measurable goals set by the Committee, may include multiple objectives, and may be based on one or more operational or financial criteria.  In setting the performance objectives, the Committee shall select from one or more of the following criteria in either absolute or relative terms, with respect to Energen and/or a Subsidiary: 

(a)    total shareholder return; 
(b)    return on assets, return on equity or return on capital employed; 
		
	(c) 
	measures of profitability such as earnings per share, corporate or business unit net income, net income before extraordinary or one-time items, earnings before interest and taxes, earnings before interests, taxes, depreciation and amortization, or earnings before interest, depreciation, amortization, taxes and exploration expense; 

		
	(d)
	cash flow measures; 

		
	(e)
	gross or net revenues or gross or net margins; 

		
	(f)
	levels of operating expense or other expense items reported on the income statement;

		
	(g)
	oil and/or gas reserves, reserve growth, production, production growth, production replacement, either absolute or on an appropriate per unit basis (e.g. reserve or production growth per diluted share); 

		
	(h)
	efficiency or productivity measures such as annual or multi-year average finding costs, absolute or per unit operating and maintenance costs, lease operating expenses, operating and maintenance expenses; 

		
	(i)
	measures of selected operations activities such as number of wells drilled or number of miles of pipe installed;

		
	(j)
	satisfactory completion of a major project or organizational initiative with specific criteria set in advance by the Committee defining “satisfactory”; 

		
	(k)
	debt ratios or other measures of credit quality or liquidity; 

		
	(l)
	strategic asset sales or acquisitions in compliance with specific criteria set in advance by the Committee.

Page 16 of 16

		
	(m)
	measures of safety and/or environmental stewardship; and

		
	(n)
	such other criteria as may be established by the Committee in writing and which meet the requirements of the performance-based exception to Section 162(m) of the Code.

When provided for by the Committee at the time the performance objectives are established, the performance objectives may be adjusted to exclude the effect of any of one or more of the following events that occur during the performance period: 

		
	(o)
	asset write-downs, sales and dispositions; 

		
	(p)
	litigation, claims, judgments or settlements;

		
	(q)
	the effect of changes in law, regulation, accounting principles or other provisions affecting reported results; 

		
	(r)
	accruals for reorganization and restructuring programs; 

		
	(s)
	material changes to invested capital from pension and post-retirement benefits-related items and similar non-operational items; and 

		
	(t)
	any extraordinary, unusual, non-recurring or non-comparable items: 

		
	(1)
	as described in Accounting Standards Codification No. 225, 

		
	(2)
	as described in management’s discussion and analysis of financial condition and results of operations appearing in Energen’s Annual Report to shareholders for the applicable year, or 

		
	(3)
	as publicly announced by Energen in a press release or conference call relating to Energen’s results of operations or financial condition for a completed quarterly or annual fiscal period; such as non-cash mark-to-market gains and losses on open derivative contracts.

In the event that the performance-based exception to Section 162(m) of the Code 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.

10.    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, state or local income tax purposes, pay to Energen and Subsidiaries, or make arrangements satisfactory to the Committee, in its sole discretion, regarding payment of any federal, state, or local taxes of any kind required by law to be withheld with respect to the Award together with any federal (including FICA and FUTA), state, or local employment taxes required to be withheld.  The obligations of Energen 

Page 17 of 17

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 satisfy their federal, and where applicable, 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 otherwise issuable or payable to said Participants in respect of an Award. During periods that the Committee permits such share withholding, Participants will be deemed to have elected share withholding; provided, however, that Energen may in its sole discretion permit a Participant to satisfy the withholding obligations of this Section 10 according to the direction of the Participant. 
11.    No Assignment of Interest.  Except as provided in Section 6.2(f), 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.
12.    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.
13.    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.
14.    Amendment and Discontinuance.  The Board 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 original effective date of the Plan was November 25, 1997, the date of its adoption by the Board, subject to approval by the shareholders of Energen holding not less than a majority of the shares present and voting at its January 1998 Annual Meeting. From time to time the Board has made amendments to the Plan that require shareholder approval for effectiveness and the shareholders of Energen have approved such amendments, each of which is deemed to be a re-adoption by the Board and re-approval by the shareholders of the Plan for the purposes of Code Section 422(b)(2).  The “ISO Effective Date” is the earlier of the dates of such re-adoption and re-approval of the most recent shareholder approved Plan amendment or restatement.

Page 18 of 18

16.    Name.  The Plan shall be known as the “Energen Corporation 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 be exempt from the requirements under Code section 409A (“Code Section 409A”) and all provisions of the Plan shall be interpreted in accordance with the applicable exemptions; there are, however, potential circumstances under which Plan payments and benefits may not be exempt from Code Section 409A.  To the extent any payment or benefit is subject to Code Section 409A, the Plan shall be interpreted in accordance with Code Section 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 Code 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.  Without limiting the generality of the foregoing, if and to the extent that any payment or benefit under this Plan is determined by Energen to constitute “nonqualified deferred compensation” subject to Code Section 409A, this Plan shall be administered accordingly, and any such payment provided to an employee who is a “specified employee” (within the meaning of Code Section 409A and as determined pursuant to procedures established by Energen) must be delayed for six months from the date of employment termination to comply with section 409A(a)(2)(B)(i) of the Code. Energen shall set aside those payments or benefits that would have been made but for payment delay required by the preceding sentence, and such amounts will be paid at the end of the delay. Notwithstanding the foregoing, neither Energen nor the Committee shall have any liability to any person in the event Code Section 409A applies to any Award in a manner that results in adverse tax consequences for a Participant. 

Page 19 of 19

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