Document:

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                                                                   EXHIBIT 10(d)

                                   ADDENDUM TO
                    EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT

         THIS ADDENDUM TO THE Executive Retirement Supplement Agreement is made
and entered into as of the date set forth below, by and between Energen
Corporation, an Alabama corporation (the "Company") and the employee of the
Company identified below (the "Executive").

         Date:       May 15, 2000

         Executive:  SAMPLE EMPLOYEE

         WHEREAS, the Executive and the Company have entered into an Executive
Retirement Supplement Agreement, dated as of October 27, 1999 (the "SERP
Agreement");

         WHEREAS, the SERP Agreement provides, in part, for an adjustment in
determining the Executive's benefits based upon an offset for certain amounts
provided the Executive under a split dollar life insurance or other agreement;
and

         WHEREAS, the parties hereto desire to provide for the determination of
such offset;

         NOW, THEREFORE, this Addendum to the SERP Agreement is hereby made and
shall be effective upon the effective date of the Split Dollar Insurance
Agreement.

          (Note: Article and Exhibit Numbering is sequential to that of
                              the SERP Agreement)

                        ARTICLE 5 - ADDENDUM DEFINITIONS

In addition to the definitions and defined terms of the SERP Agreement, the
following definitions shall apply to this Addendum:

         "ACTUARIALLY EQUIVALENT" means a benefit having the same value as the
amount it replaces, computed on the basis of the definition of Present Value
contained in Section 1.12 of the SERP Agreement.

         "ELECTIONS I, II AND III" are as described in Article 7 paragraph c.

         The "EXECUTIVE'S DEATH BENEFIT" is the life insurance death benefit
pursuant to section 4(b)(2) of the Split Dollar Insurance Agreement which is
paid to the Executive's beneficiary upon his death.

         The "EXECUTIVE'S POLICY INTEREST" is the Executive's interest in the
policy's cash surrender value as defined in section 4(b)(1) of the Split Dollar
Insurance Agreement. The

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foregoing notwithstanding, if the Split Dollar Insurance Agreement terminates as
a result of the Executive's death, then the Executive's Policy Interest shall
equal the Executive's Death Benefit.

         "POLICY SPLIT DATE" is the date that the Split Dollar Insurance
Agreement terminates.

         "SERP BENEFIT COMMENCEMENT DATE" means the first date that a benefit
payment is made under the SERP Agreement.

         The "SPLIT DOLLAR INSURANCE AGREEMENT" is that agreement dated May 15,
2000 by and between the Company and the Executive pursuant to the Energen
Corporation Officer Split Dollar Life Insurance Plan.

                        ARTICLE 6 - CALCULATION OF OFFSET

         Section 2.2 of Article 2 of the SERP Agreement shall be applied and
interpreted as set forth in this Article 6. The Offset may result in a
Supplemental Retirement benefit of $-0-, and may further result in a
Supplemental Spouse's Retirement Benefit (as provided in Section 2.3 of the SERP
Agreement) of $-0-. In no event shall the Offset reduce the Supplemental
Retirement Benefit or the Supplemental Spouse's Retirement Benefit below $-0-:

         (a)      Policy Split prior to or contemporaneous with Benefit
                  Commencement. If the Policy Split Date occurs prior to or
                  contemporaneous with the SERP Benefit Commencement Date, then
                  the Offset shall be determined at the SERP Benefit
                  Commencement Date. If Election I applies, then the Offset
                  shall equal a monthly amount payable to the Executive in the
                  normal form (with no election of an optional form of payment)
                  provided under the Retirement Plan that is Actuarially
                  Equivalent to the Executive's Policy Interest at the Policy
                  Split Date. If Election II or III applies, then the Offset
                  shall be a lump sum amount that is equal to the Executive's
                  Policy Interest at the Policy Split Date.

         (b)      Policy Split subsequent to Benefit Commencement with Election
                  I or II. If the Policy Split Date occurs subsequent to the
                  SERP Benefit Commencement Date and Election I or II applies,
                  then the Offset will be determined at the Policy Split Date.
                  If Election I applies, then the Offset shall be $0 until the
                  Policy Split Date and on and after the Policy Split date shall
                  equal a monthly amount payable to the Executive in the normal
                  form (with no election of an optional form of payment)
                  provided under the Retirement Plan that is Actuarially
                  Equivalent to the Executive's Policy Interest at the Policy
                  Split Date. If Election II applies, then the Offset shall be a
                  lump sum amount that is equal to the Executive's Policy
                  Interest at the Policy Split Date.

         (c)      Policy Split subsequent to Benefit Commencement with Election
                  III. If the Policy Split Date occurs subsequent to the SERP
                  Benefit Commencement Date and Election III applies, then the
                  Offset will be determined at the SERP Benefit Commencement
                  Date. The Offset shall be a lump sum amount that is equal to
                  the Executive's Policy Interest at the SERP Benefit
                  Commencement Date.

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         (d)   Examples. The following examples are for discussion purposes only
               and do not reflect actual or expected results or actuarial
               calculations, nor do they reflect adjustments as of the
               Eligibility Date for social security benefits.

         Example d1: Policy Split Date Contemporaneous with SERP Benefit
         Commencement. Assume that

                  (i)      the Executive terminates employment at age 60;

                  (ii)     depending on the applicable Election, the Executive's
                           SERP Agreement benefit is payable as a $550,000 lump
                           sum at the Severance Date or a $4,000 per month
                           annuity commencing at age 60;

                  (iii)    the Executive's Split Dollar Insurance Agreement
                           terminates at the Severance Date;

                  (iv)     the Executive's Policy Interest at the Policy Split
                           Date (which in this example is the same as the
                           Severance Date) is $500,000 and

                  (v)      the monthly amount payable for the life of the
                           executive commencing at age 60 that is Actuarially
                           Equivalent to $500,000 is $3,600.

         If Election I applies, then the Offset is $3,600 per month leaving a
         Supplemental Retirement Benefit of $400 ($4,000 -$3,600) per month
         commencing at age 60. If Election II or III applies, then the Offset is
         $500,000 with the Executive receiving a SERP Agreement lump sum of
         $50,000 ($550,000 - $500,000) within 45 days of the Severance Date.

         Example d2: Policy Split Date Prior to SERP Benefit Commencement.
         Assume that

                  (i)      the Executive terminates employment at age 58;

                  (ii)     depending on the applicable Election, the Executive's
                           SERP Agreement benefit is payable as a $500,000 lump
                           sum at the Severance Date or a $4,300 per month
                           annuity commencing at age 60;

                  (iii)    the Executive's Split Dollar Insurance Agreement
                           terminates at the Severance Date (in this example,
                           age 58);

                  (iv)     the Executive's Policy Interest at the Policy Split
                           Date (which in this example is the same as the
                           Severance Date) is $425,000 and

                  (v)      the monthly amount payable for the life of the
                           Executive commencing at age 60 that is Actuarially
                           Equivalent to $425,000 is $3,200.

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         If Election I applies, then the Offset is $3,200 per month leaving a
         Supplemental Retirement Benefit of $1,100 ($4,300 -$3,200) per month
         commencing at age 60. If Election II or III applies, then the Offset is
         $425,000 with the Executive receiving a SERP Agreement lump sum of
         $75,000 ($500,000 - $425,000) within 45 days of the Severance Date.

         Example d3: Policy Split Date Subsequent to Benefit Commencement.
         Assume that

                  (i)      the Executive terminates employment at age 58;

                  (ii)     depending on the applicable Election, the Executive's
                           SERP Agreement benefit is payable as a $500,000 lump
                           sum at the Severance Date or a $4,300 per month
                           annuity commencing at age 60 or $4,300 per month from
                           age 60 to age 65 plus a lump sum of $515,000 at age
                           65;

                  (iii)    the Executive's Split Dollar Insurance Agreement does
                           not terminate until age 65 (based on Energen's
                           election to delay termination in accordance with the
                           Split Dollar Insurance Agreement);

                  (iv)     the Executive's Policy Interest at the Severance Date
                           is $425,000 and at the Policy Split Date (in this
                           example, age 65) is $600,000 and

                  (v)      the monthly amount payable for the life of the
                           executive commencing at age 65 that is Actuarially
                           Equivalent to $600,000 is $5,000.

         If Election I applies, then from age 60 to age 65 the Executive will
         receive a Supplemental Retirement Benefit of $4,300 per month which
         will reduce to $0 per month at age 65 since the $5,000 per month Offset
         exceeds the $4,300 per month Supplemental Retirement Benefit. If
         Election II applies, then from age 60 to age 65 the Executive will
         receive a Supplemental Retirement Benefit of $4,300 per month at which
         time the $600,000 Offset will exceed the age 65 lump sum of $515,000
         resulting in no further payment to the Executive under the SERP
         Agreement. If Election III applies, then the Offset is $425,000 with
         the Executive receiving a SERP Agreement lump sum of $75,000 ($500,000
         - $425,000) within 45 days of the Severance Date

         Example d4: Executive Death Prior to Benefit Commencement. Assume that

                  (i)      while actively employed, the Executive dies at age 50
                           and is survived by his spouse (the Split Dollar
                           Insurance Agreement terminates upon the Executive's
                           Death);

                  (ii)     the Executive's Death Benefit is $1,400,000;

                  (iii)    the Executive's SERP Agreement benefit that the
                           Executive would have received had his death not
                           occurred (determined as of his date of death and

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                           depending on the applicable Election) is a lump sum
                           of $200,000 or $1,300 per month commencing at age 55;
                           and

                  (iv)     that $9,700 per month commencing at age 55 is the
                           Actuarial Equivalent of $1,400,000. Regardless of the
                           Election the Spouse's benefit under the SERP
                           Agreement is generally 50% of the benefit that the
                           Executive would have received.

         If Election I applies, then the Supplemental Retirement Benefit is
         $1,300 per month and the Offset is $9,700 thus the Supplemental
         Spouse's Retirement Benefit is -$0-. If Election II or III applies,
         then the Executive's lump sum is $200,000 and the Offset is $1,400,000,
         thus the Spouse's lump sum is -$0-.

                    ARTICLE 7 - SERP BENEFIT PAYMENT ELECTION

         a.       The provisions of this Article 7 supersede and replace Section
2.5 of the SERP Agreement and any payment elections previously made pursuant to
Section 2.5 or other provisions of the SERP Agreement. The Executive has
selected and benefits under the SERP Agreement will be paid in accordance with
the SERP Benefit payment election marked below. Such payment election shall be
effective immediately. Elections II and III shall each constitute "Lump Sum
Elections" for purposes of the SERP Agreement including, without limitation,
Section 2.3 of the SERP Agreement. Payment of the lump sum portion of Election
II and payment of the lump sum pursuant to Election III shall each constitute
"payment of a lump sum pursuant to Section 2.5" for purposes of Section 2.3(d)
of the SERP Agreement.

         b.       By executing and filing with the Company a form substantially
identical to Exhibit II hereof, or such other form as the Company may prescribe
or approve, the Executive may revoke an election made in paragraph (c) below or
may make any election which could be made pursuant to such paragraph, but any
such election or revocation of an election shall not become effective if the
Executive's Severance Date occurs within one year from the date such revocation
or election is made.

         c.       The Executive has selected the payment election marked below:

MARK ONE

           [ ]    I.       Full Annuity: The Supplemental Retirement Benefit
                           shall be payable in monthly installments as described
                           in Section 2.2 of the SERP Agreement.

           [ ]    II.      Combination Annuity/Lump Sum: Until the date that the
                           Split Dollar Insurance Agreement is terminated, the
                           Supplemental Retirement Benefit shall be payable in
                           monthly installments as described in Section 2.2 of
                           the SERP Agreement. Upon termination of the Split
                           Dollar Insurance Agreement, in lieu of receiving the
                           remaining Supplemental Retirement Benefit, the
                           Executive shall be paid a lump sum that is the
                           Present Value, as of the date payment is made, of the

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                           remaining Supplemental Retirement Benefit. Such lump
                           sum payment shall be made as promptly as practical,
                           and in all events within 45 days, after the later of
                           the Executive's Severance Date or the date of
                           termination of the Split Dollar Insurance Agreement.

              [ ] III.     Lump Sum. In lieu of receiving the Supplemental
                           Retirement Benefit, the Executive shall be paid a
                           lump sum that is the Present Value, as of the date
                           payment is made, of the Supplemental Retirement
                           Benefit. Such payment shall be made as promptly as
                           practical after the Executive's Severance Date and,
                           in all events, within 45 days after such Severance
                           Date.

                                        ENERGEN CORPORATION

                                  By:
                                      ------------------------------------------
                                      W. David Self
                                  Its:  Vice President - Human Resources

                                  EXECUTIVE

                                  ----------------------------------------------
                                  SAMPLE EMPLOYEE

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                                   EXHIBIT II

                                    ELECTION
                                   PURSUANT TO
              ADDENDUM TO EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT

         I hereby revoke any and all elections heretofore made by me pursuant to
the terms of that certain EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT, dated as of
______________________, and/or the ADDENDUM TO EXECUTIVE RETIREMENT SUPPLEMENT
AGREEMENT, dated as of ______________________, entered into by and between
Energen Corporation and ___________________, and elect to have my benefit paid
as follows:

MARK ONE

     [ ] I.       Full Annuity: The Supplemental Retirement Benefit shall be
         payable in monthly installments as described in Section 2.2 of the
         SERP Agreement.

     [ ] II.      Combination Annuity/Lump Sum: Until the date that the Split
         Dollar Insurance Agreement is terminated, the Supplemental Retirement
         Benefit shall be payable in monthly installments as described in
         Section 2.2 of the SERP Agreement. Upon termination of the Split Dollar
         Insurance Agreement, in lieu of receiving the remaining Supplemental
         Retirement Benefit, the Executive shall be paid a lump sum that is the
         Present Value, as of the date payment is made, of the remaining
         Supplemental Retirement Benefit. Such lump sum payment shall be made as
         promptly as practical, and in all events within 45 days, after the
         later of the Executive's Severance Date or the date of termination of
         the Split Dollar Insurance Agreement.

     [ ] III.     Lump Sum. In lieu of receiving the Supplemental Retirement
         Benefit, the Executive shall be paid a lump sum that is the Present
         Value, as of the date payment is made, of the Supplemental Retirement
         Benefit. Such payment shall be made as promptly as practical after the
         Executive's Severance Date and, in all events, within 45 days after
         such Severance Date.

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         I understand that the foregoing election and revocation, if applicable,
will not become effective if my Severance Date occurs within one year from the
date of acceptance indicated below.

                                            ------------------------------------
                                            Participant

                                            Accepted by:
                                            ENERGEN CORPORATION

                                            ------------------------------------
                                            By:
                                               ---------------------------------
                                            Its:
                                                --------------------------------
                                            Date:
                                                  ------------------------------

                                       8<PAGE>   1

                                                                  EXHIBIT 10(h)

                               ENERGEN CORPORATION
                            1997 STOCK INCENTIVE PLAN
                      (As Amended Effective October 1,2000)

         The purpose of this Plan is to provide a means whereby Energen
Corporation may, through the use of stock and stock related compensation,
attract and retain persons of ability as employees and motivate such employees
to exert their best efforts on behalf of Energen Corporation and its
subsidiaries.

         1.       DEFINITIONS. As used in the Plan, the following terms have
meanings indicated:

         "Award" means Incentive Stock Options, Nonqualified Stock Options
and/or Restricted Stock granted under the Plan.

         "Board" means the Board of Directors of Energen.

         "Cause" means any of the following:

                  (1)      The willful and continued failure by a Participant to
                  substantially perform such Participant's duties with Energen
                  or Subsidiary (other than any such failure resulting from such
                  Participant's incapacity due to physical or mental illness)
                  after a written demand for substantial performance is
                  delivered to the Participant specifically identifying the
                  manner in which such Participant has not substantially
                  performed such Participant's duties.

                  (2)      The engaging by a Participant in willful, reckless or
                  grossly negligent misconduct which is demonstrably injurious
                  to Energen or a Subsidiary monetarily or otherwise; or

                  (3)      The conviction of a Participant of a felony.

         "Change in Control" means: the occurrence of any one or more of the
following:

                           (1)      The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(a "Person") of beneficial ownership (within the meaning of Rule 13(d)-3
promulgated under the Exchange Act) of 25% or more of either (i) the then
outstanding shares of common stock of Energen (the "Outstanding Common Stock")
or (ii) the combined voting power of the then outstanding voting securities of
Energen entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); provided, however, that for purposes of this
subsection (1) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by Energen or any corporation controlled by Energen
shall not constitute a Change in Control;

                           (2)      Individuals who, as of October 1, 1999,
constitute the Board of Directors of Energen (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of Directors of
Energen (the "Board of Directors"); provided, however that any individual
becoming a director subsequent to such date whose election, or nomination for
election by Energen's shareholders, was approved by a vote of at least a
majority of the directors then comprising the

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Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors;

                           (3)      Consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets, of Energen (a "Business Combination"), in each case, unless, following
such Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 75% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Energen or all or
substantially all of Energen's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Common Stock
and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding
any corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of Energen or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board of
Directors, providing for such Business Combination;

                           (4)      Any transaction or series of transactions
which is expressly designated by resolution of the Board of Directors to
constitute a Change in Control for purposes of this Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

         "Committee" means the Officers Review Committee of the Board or such
other Committee of two or more directors as may be determined by the Board.

         "Energen" means Energen Corporation and any successor corporation by
merger or other reorganization.

         "Employee" means any employee of one or more of Energen and the
Subsidiaries.

         "Exchange Act" means the Securities Exchange Act of 1934.

         "Exercise Date" means the date on which a notice of option exercise is
delivered to Energen pursuant to Section 6.3(c) or a notice of option
cancellation is delivered to Energen pursuant to Section 6.3(i).

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         "Expiration Date" means the last day on which an option issued under
the Plan may be exercised, as such date may be extended pursuant to Section
6.3(a).

         "Fair Market Value" means, with respect to a share of Stock, the
closing price of the Stock on the New York Stock Exchange (or such other
exchange or system on which the Stock then trades or is quoted) or, if there is
no trading of the Stock on the relevant date, then the closing price on the most
recent trading date preceding the relevant date. With respect to other
consideration, the term Fair Market Value means fair market value as may be
reasonably determined by the Committee.

         "Incentive Stock Options" means options granted under the Plan to
purchase Stock which at the time of grant qualify as "incentive stock options"
within the meaning of Section 422 of the Code.

         "Nonqualified Stock Options" means options granted under the Plan to
purchase Stock which are not Incentive Stock Options.

         "Participant" means an Employee who is selected by the Committee to
receive an Award.

         "Performance Measures" has the meaning set forth in Section 7.3.

         "Plan" means this Energen Corporation 1998 Stock Incentive Plan.

         "Restricted Stock" means Stock granted to a Participant under Section 7
of the Plan with respect to which the applicable Restrictions have not lapsed or
been removed.

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

         "Stock" means the common stock, par value $.01 per share, of Energen as
such stock may be reclassified, converted or exchanged by reorganization, merger
or otherwise.

         "Subsidiary" means any corporation, the majority of the outstanding
voting stock of which is owned, directly or indirectly by Energen Corporation.

         "Ten Percent Stockholder" means an individual who, at the time of
grant, owns stock possessing more than 10 percent of the total combined voting
power of all classes of stock of Energen.

         2.       SHARES SUBJECT TO THE PLAN. Subject to adjustment in
accordance with Section 3, an aggregate of 650,000 shares of Stock are available
for issuance (including shares transferred from treasury) under the Plan. Shares
of Stock allocable to an Award or portion of an Award that is canceled by
forfeiture, expiration or for any other reason (excepting pursuant to a stock
appreciation right election under Section 6.3(i)) shall again be available for
additional Awards. If any option granted under the Plan shall be canceled as to
any shares of Stock pursuant to Section 6.3(i) (stock appreciation rights), then
such shares of Stock shall not be available for the grant of another Award.

         3.       ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK. In the event
of any change in the Stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
shares, or rights offering to purchase Stock at a price substantially below fair
market value, or of any similar change affecting the Stock, the number and kind
of shares which thereafter may be available for issuance under the Plan, and the
number and kind

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of shares subject to option in outstanding option agreements and the purchase
price per share thereof shall be appropriately adjusted consistent with such
change in such manner as the Committee may deem equitable to prevent dilution or
enlargement of the rights granted to, or available for, Participants in the
Plan. If the adjustment would result in fractional shares with respect to an
Award, then the Committee may make such further adjustment (including, without
limitation, the use of consideration other than Stock or rounding to the nearest
whole number of shares) as the Committee shall deem appropriate to avoid the
issuance of fractional shares.

         4.       ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Committee. No member of the Committee shall be eligible to participate in
the Plan while serving as a member of the Committee. Subject to the provisions
of the Plan, the Committee shall have the exclusive authority to select the
Employees who are to be Participants in the Plan, to determine the Award to be
made to each Participant, and to determine the conditions subject to which
Awards will become payable under the Plan. The Committee shall have full power
to administer and interpret the Plan and to adopt such rules and regulations
consistent with the terms of the Plan as the Committee deems necessary or
advisable in order to carry out the provisions of the Plan. The Committee's
interpretation and construction of the Plan and of any conditions applicable to
Awards shall be conclusive and binding on all persons, including Energen and all
Participants. Any action which can be taken, or authority which can be
exercised, by the Committee with respect to the Plan, may also be taken or
authorized by the Board.

         5.       PARTICIPATION. Participants in the Plan shall be selected by
the Committee from those Employees who, in the judgment of the Committee, have
significantly contributed or can be expected to significantly contribute to
Energen's success.

         6.       OPTIONS

         6.1      GRANT OF OPTIONS. Subject to the provisions of the Plan, the
Committee may (a) determine and designate from time to time those Participants
to whom options are to be granted and the number of shares of Stock to be
optioned to each employee; (b) authorize the granting of Incentive Stock
Options, Nonqualified Stock Options, or combination of Incentive Stock Options
and Nonqualified Stock Options; (c) determine the number of shares subject to
each option; (d) determine the time or times when each Option shall become
exercisable and the duration of the exercise period; and (e) determine whether
and, if applicable, the manner in which each option shall contain stock
appreciation rights and/or dividend equivalents; provided, however, that (i) no
Incentive Stock Option shall be granted after the expiration of ten years from
the effective date of the Plan specified in Section 13 and (ii) the aggregate
Fair Market Value (determined as of the date the option is granted) of the Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any employee during any calendar year (under all plans of Energen and its
Subsidiaries) shall not exceed $100,000.

         6.2      INDIVIDUAL LIMITATION. The aggregate of all Awards received by
any individual Participant shall not include options with respect to more than
150,000 shares of Stock (adjusted in accordance with Section 3).

         6.3      TERMS AND CONDITIONS OF OPTIONS. Each option granted under the
Plan shall be evidenced by an agreement, in a form approved by the Committee.
Such agreement shall be subject to the following express terms and conditions
and to such other terms and conditions as the Committee may deem appropriate:

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                (a)        Option Period. Each option agreement shall specify
         the period for which the option thereunder is granted and shall provide
         that the option shall expire at the end of such period. The Committee
         may extend such period provided that, in the case of an Incentive Stock
         Option, such extensions shall not in any way disqualify the option as
         an Incentive Stock Option. In no case shall such period for an
         Incentive Stock Option, including any such extensions, exceed ten years
         from the date of grant, provided, however that, in the case of an
         Incentive Stock Option granted to a Ten Percent Stockholder, such
         period, including extensions, shall not exceed five years from the date
         of grant.

                (b)        Option Price. The option price per share shall be
         determined by the Committee at the time any option is granted, and
         shall be not less than (i) the Fair Market Value, or (ii) in the case
         of an Incentive Stock Option granted to a Ten Percent Stockholder, 110
         percent of the Fair Market Value, (but in no event less than the par
         value) of one share of Stock on the date the option is granted, as
         determined by the Committee.

                (c)        Exercise of Option. No part of any option may be
         exercised until the optionee shall have remained in the employ of
         Energen or of a Subsidiary for such period, if any, as the Committee
         may specify in the option agreement, and the option agreement may
         provide for exercisability in installments. The Committee shall have
         full authority to accelerate for any reason it deems appropriate the
         vesting schedule of all or any part of any option issued under the
         Plan. Each option shall be exercisable in whole or part on such date or
         dates and during such period and for such number of shares as shall be
         set forth in the applicable option agreement. An optionee electing to
         exercise an option shall give written notice to Energen of such
         election and of the number of shares the optionee has elected to
         purchase and shall at the time of exercise tender the full purchase
         price of the shares the optionee has elected to purchase plus any
         required withholding taxes in accordance with Sections 6.3(d) and 8.

                (d)        Payment of Purchase Price upon Exercise. The purchase
         price of the shares as to which an option shall be exercised shall be
         paid to Energen at the time of exercise (i) in cash, (ii) in Stock
         already owned by the optionee having a total Fair Market Value equal to
         the purchase price and not subject to any lien, encumbrance or
         restriction on transfer other than pursuant to federal or state
         securities laws, (iii) by election to have Energen withhold (from the
         Stock to be delivered to the optionee upon such exercise) shares of
         Stock having a Fair Market Value equal to the purchase price or (iv) by
         any combination of such consideration having a total Fair Market Value
         equal to the purchase price; provided that the use of consideration
         described in clauses (ii), (iii) and (iv) shall be subject to approval
         by the Committee. In addition the Committee in its discretion may
         accept such other consideration or combination of consideration as the
         Committee shall deem to be appropriate and to have a total Fair Market
         Value equal to the purchase price. In each case, Fair Market Value
         shall be determined as of the Exercise Date.

                (e)        Exercise in the Event of Death or Termination of
         Employment. If an optionee's employment by Energen and all Subsidiaries
         shall terminate because of the optionee's (i) death, (ii) disability,
         or (iii) retirement in accordance with the terms of Energen's
         tax-qualified retirement plans, the optionee's options may be exercised
         on or prior to the applicable Expiration Dates, but only to the extent
         that such options were exercisable on the date of such termination. If
         an optionee's employment by Energen and all Subsidiaries shall

                                       5
<PAGE>   6

         terminate for any reason other than (i) those set forth in the
         preceding sentence, or (ii) termination for Cause, then all unexercised
         options under the Plan held by the optionee (vested or unvested) shall
         terminate ninety days following the date of termination of employment,
         provided that the Committee shall have the authority to extend such
         option termination date. Without limiting the generality of Section
         5(c), the Committee shall have full authority to accelerate the vesting
         schedule of all or any part of any option issued under the Plan and
         held by an employee who has terminated or plans to terminate his or her
         employment, such that a terminated employee, his heirs or personal
         representatives may exercise (at such time or times on or prior to the
         applicable Expiration Dates as may be specified by the Committee) any
         part or all of any unvested option under the Plan held by such employee
         at the date of his or her termination of employment. Upon termination
         for Cause, all unexercised options held by the terminated Employee
         shall immediately terminate and may not be exercised.

                (f)        Nontransferability. Except as may otherwise be
         provided in this Section 5(f), no option granted under the Plan shall
         be transferable other than by will or by the laws of descent and
         distribution and, during the lifetime of the optionee, an option shall
         be exercisable only by the optionee. The foregoing notwithstanding, the
         optionee may transfer Nonqualified Stock Options to (i) the optionee's
         spouse or natural, adopted or step-children or grandchildren (including
         the optionee, "Immediate Family Members"), (ii) a trust for the benefit
         of one or more of the Immediate Family Members, (iii) a family
         charitable trust established by one or more of the Immediate Family
         Members, or (iv) a partnership in which the only partners are (and,
         except as may be otherwise agreed by the Committee, will remain during
         the option period) one or more of the Immediate Family Members. Any
         options so transferred shall not be further transferable except in
         accordance with the terms of this Plan, shall remain subject to all
         terms and conditions of the Plan and the applicable option agreement,
         and may be exercised by the transferee only to the extent that the
         optionee would have been entitled to exercise the option had the option
         not been transferred.

                (g)        Investment Representation. To the extent reasonably
         necessary to assure compliance with all applicable securities laws,
         upon demand by the Committee for such a representation, the optionee
         shall deliver to the Committee at the time of any exercise of an option
         or portion thereof or settlement of stock appreciation rights or
         dividend equivalents a written representation that the shares to be
         acquired upon such exercise are to be acquired for investment and not
         for resale or with a view to the distribution thereof. Upon such
         demand, delivery of such representation prior to the delivery of any
         shares issued upon exercise of an option and prior to the expiration of
         the option period shall be a condition precedent to the right of the
         optionee or such other person to purchase any shares.

                (h)        Incentive Stock Options. Each option agreement which
         provides for the grant of an Incentive Stock Option to a participant
         shall contain such terms and provisions as the Committee may determine
         to be necessary or desirable in order to qualify such option as an
         "incentive stock option" within the meaning of Section 422 of the Code,
         or any amendment thereof or substitute therefor. Energen, in its
         discretion, may retain possession of any certificates for Stock
         delivered in connection with the exercise of an Incentive Stock Option
         or appropriately legend such certificates during the period that a
         disposition of such Stock would disqualify the exercised option from
         treatment as an incentive stock option under Section 422 of the Code (a
         "422 Option"). Subject to the other provisions of the Plan, Energen
         shall cooperate with the optionee should the optionee desire to make a
         disqualifying

                                       6
<PAGE>   7

         disposition. Any Incentive Stock Option which is disqualified from
         treatment as a 422 Option for whatever reason, shall automatically
         become a Nonqualified Stock Option. No party has any obligation or
         responsibility to maintain an Incentive Stock Option's status as a 422
         Option. The optionee shall, however, immediately notify Energen of any
         disposition of Stock which would cause an Incentive Stock Option to be
         disqualified as a 422 Option.

                (i)        Stock Appreciation Right. Each option agreement may
         provide that the optionee may from time to time elect, by written
         notice to Energen, to cancel all or any portion of the option then
         subject to exercise, in which event Energen's obligation in respect of
         such option shall be discharged by payment to the optionee of an amount
         in cash equal to the excess, if any, of the Fair Market Value as of the
         Exercise Date of the shares subject to the option or the portion
         thereof so canceled over the aggregate purchase price for such shares
         as set forth in the option agreement or, if mutually agreed by the
         Committee and the optionee, (i) the issuance or transfer to the
         optionee of shares of Stock with a Fair Market Value as of the Exercise
         Date equal to any such excess, or (ii) a combination of cash and shares
         of Stock with a combined value as of the Exercise Date equal to any
         such excess.

                (j)        Dividend Equivalents. Each option agreement may
         provide that upon (i) exercise of all or part of an option, (ii)
         cancellation of all or part of such option pursuant to paragraph 5(i),
         or (iii) the occurrence of an Expiration Date, for no additional
         consideration, the optionee shall be paid an additional amount equal to
         the aggregate amount of cash dividends which would have been paid on
         the shares of Stock purchased upon such exercise or with respect to
         which such cancellation or expiration occurs, if such shares had been
         issued and outstanding during the period commencing with the option
         grant date and ending on the date of option exercise, cancellation or
         expiration, plus an amount equal to the interest that such dividends
         would have earned from the respective dividend payment dates if
         deposited in an account bearing interest, compounded quarterly on each
         April 1, July 1, October 1 and January 1, at a rate calculated as
         follows. For purposes of the preceding sentence, the assumed interest
         rate in effect for a calendar quarter shall be the announced prime rate
         of AmSouth Bank of Alabama (or such comparable rate of a comparable
         institution as the Committee may from time to time determine) in effect
         on the first day of such calendar quarter. Such additional amount shall
         be paid by cash, or if mutually agreed by the Committee and the
         optionee, by the issuance of Stock or a combination of cash and shares
         of Stock having an aggregate Fair Market Value as of the applicable
         Expiration or Exercise Date, equal to any such excess.

                (k)        No Rights as Shareholder. No optionee shall have any
         rights as a shareholder with respect to any shares subject to the
         optionee's option prior to the date of issuance to the optionee of a
         certificate or certificates for such shares.

                (l)        Delivery of Certificates. Subject to Section 6.3(h),
         as soon as reasonably practicable after receipt of an exercise notice
         and full payment, Energen shall deliver to the optionee, registered in
         the optionee's name, certificates for the appropriate number of shares
         of Stock.

                                       7
<PAGE>   8

         7.     RESTRICTED STOCK

         7.1    GRANT OF RESTRICTED STOCK. The Committee may make grants of
Restricted Stock to Participants. Each restricted Stock Award shall be evidence
by an agreement in a form approved by the Committee, setting forth the number of
shares of Restricted Stock granted and the terms and conditions to which the
Restricted Stock is subject. Restricted Stock may be awarded by the Committee in
its discretion with or without cash consideration.

         7.2    TERMS AND CONDITIONS OF RESTRICTED STOCK.

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

                (b)        Lapse. The Committee shall establish as to each Award
         of Restricted Stock the terms and conditions upon which the
         Restrictions shall lapse, which terms and conditions may include,
         without limitation, a required period of service, Performance Measures,
         or any other individual or corporate performance conditions.

                (c)        Termination of Employment. Except as may be otherwise
         expressly provided in the applicable Restricted Stock Award agreement,
         should the Participant's employment with Energen and all Subsidiaries
         terminate for any reason including, without limitation, termination
         because of the Participant's death, disability, or retirement in
         accordance with Energen's tax-qualified retirement plans, any shares of
         Stock which remain subject to Restrictions, shall be forfeited and
         returned to Energen unless the Committee decides, in its discretion, to
         accelerate the time at which any remaining Restrictions lapse or to
         remove any or all such Restrictions entirely (subject to Section
         7.2(d)). Upon the termination of the Participant's employment for any
         reason, the Committee is not required to act and, absent some action by
         the Committee, all shares of Stock remaining subject to Restriction
         will be forfeited and returned to Energen.

                (d)        Lapse at Discretion of Committee. The Committee may
         at any time, in its sole discretion, accelerate the time at which any
         or all Restrictions on a Restricted Stock Award will lapse or remove
         any and all such Restrictions; provided that the Committee may not
         accelerate the lapse of or remove Restrictions which require the
         attainment of a Performance Measure except as may be permitted by the
         performance-based exception to Section 162(m) of the Code.

                (e)        Rights with respect to Restricted Stock. Upon the
         acceptance by a Participant of an award of Restricted Stock, such
         Participant shall, subject to the restrictions set forth in paragraph
         (b) above, have all the rights of a shareholder with respect to such
         shares of Restricted Stock, including, but not limited to, the right to
         vote such shares of Restricted Stock and the right to receive all
         dividends and other distributions paid thereon. Certificates
         representing Restricted Stock may be held by Energen until the
         restriction lapse and shall bear such restrictive legends as Energen
         shall deem appropriate.

                                       8
<PAGE>   9

                (f)        No Section 83(b) Election. Unless otherwise expressly
         agreed in writing by Energen, a Participant shall not make an election
         under Section 83(b) of the Code with respect to a Restricted Stock
         Award and upon the making of any such election, all shares of
         Restricted Stock subject to the election shall be forfeited and
         returned to Energen.

         7.3      PERFORMANCE MEASURES. At its discretion, the Committee may
make the lapsing of Restrictions subject to the attainment of one or more
Performance Measures designed to qualify for the performance-based exceptions
from Section 162(m) of the Code.

Unless and until Energen's shareholders approve a change in the Performance
Measures set forth in this Section 7.3, the Performance Measures to be used for
purposes of such Awards shall be chosen from among the following alternatives,
as measured with respect to Energen and/or any one or more of the Subsidiaries,
with or without comparison to a peer group:

                (a)   return on shareholder's equity;

                (b)   return on assets;

                (c)   net income;

                (d)   earnings per common share;

                (e)   total shareholder return;

                (f)   oil and/or gas reserve additions;

                (g)   utility customer number, volume and/or revenue growth; and

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

In the event that the performance-based exception to Section 162(m) or its
successor is amended such that the performance-based exception permits the
employer to alter the governing performance measures without obtaining
shareholder approval of such changes, the Committee shall have discretion to
make such changes without obtaining shareholder approval.

         8.       WITHHOLDING. Each Participant shall, no later than the date as
of which the value of an Award first becomes includable in the gross income of
the Participant for Federal income tax purposes, pay to Energen and
Subsidiaries, or make arrangements satisfactory to the Committee, in its sole
discretion, regarding payment of, any Federal, FICA, state, or local taxes of
any kind required by law to be withheld with respect to the Award. The
obligations of Energen under the Plan shall be conditional on such payment or
arrangements. Energen and, where applicable, its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes owed hereunder
by a Participant from any payment of any kind otherwise due to said Participant.
The Committee may permit Participants to elect to satisfy their Federal, and
where applicable, FICA, state and local tax withholding obligations with respect
to all Awards by the reduction, in an amount necessary to pay

                                       9
<PAGE>   10

all said withholding tax obligations, of the number of shares of Stock or amount
of cash otherwise issuable or payable to said Participants in respect of an
Award.

         9.       NO RIGHTS TO CONTINUED EMPLOYMENT. The Plan and any Award
granted under the Plan shall not confer upon any Participant any right with
respect to continuance of employment by Energen or any Subsidiary or any right
to further Awards under the Plan, nor shall they interfere in any way with the
right of Energen or any Subsidiary by which a Participant is employed to
terminate the Participant's employment at any time.

         10.      COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the
grant and fulfillment of Awards thereunder, and the obligations of Energen to
sell, issue, release and/or deliver shares of Stock shall be subject to all
applicable federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required. Energen shall not be
required to issue or deliver any certificates for shares of Stock prior to (a)
the listing of such shares on any stock exchange on which the Stock may then be
listed and (b) the completion of any registration or qualification of such
shares under any federal or state law, or any ruling or regulation of any
government body which Energen shall, in its sole discretion, determine to be
necessary or advisable

         11.      CHANGE IN CONTROL. Except as may be otherwise expressly
provided in the applicable Award agreement, upon the occurrence of a Change in
Control all outstanding Incentive Stock Options and Nonqualified Stock Options
shall be immediately and fully vested and exercisable and all restrictions on
all outstanding Restricted Stock shall immediately lapse. Except as may be
otherwise expressly provided in the applicable Award Agreement, if a
Participant's employment by Energen and all subsidiaries is terminated during a
Pre-Closing Period (defined below) (i) involuntarily by Energen other than for
Cause, or (ii) voluntarily by the Participant for Good Reason (defined below),
then all of the Participant's outstanding Incentive Stock Options and
Nonqualified Stock Options shall be immediately and fully vested and exercisable
and all restrictions on all of the Participant's outstanding Restricted Stock
shall immediately lapse. A "Pre-Closing Period" commences upon Energen
shareholder approval of a transaction which upon consummation will constitute a
Change in Control and ends upon the first to occur of (i) the closing of such
transaction or (ii) a determination by the Board that such Change in Control
will not be consummated. "Good Reason" means with respect to a Participant (i) a
reduction in Participant's aggregate rate of monthly base pay from Energen and
all subsidiaries or (ii) the termination or materially adverse modification of
the Energen Annual Incentive Compensation Plan without substitution of new
short-term incentives providing comparable compensation for the Participant.

         12.      AMENDMENT AND DISCONTINUANCE. The Board of Directors of
Energen may from time to time amend, suspend or discontinue the Plan. Without
the written consent of a Participant, no amendment or suspension of the Plan
shall alter or impair any Award previously granted to a Participant under the
Plan.

                The foregoing notwithstanding, if Energen agrees to a Change in
Control transaction for which the parties intend to use the pooling of interests
accounting method and, in the opinion of the Independent Auditor (defined
below), (i) the use of such accounting method is precluded by a prior amendment
of the Plan or a prior Award grant, (ii) such impediment to use of the pooling
of interests method can be removed by modification or nullification of such
amendment or Award, and (iii) there will be no other impediments to the use of
the pooling of interests method, then, effective contemporaneous with the
closing of the Change in Control, the Board may modify or nullify such

                                       10
<PAGE>   11

prior amendment or Award. Any such modification or nullification will be done
only to the extent deemed necessary by the Independent Auditor and to the extent
possible will be done in a manner which has the least adverse economic effect on
Participants. Any Award which has been exercised or had its restrictions lapse,
may only be modified or nullified with the consent of the Participant.
"Independent Auditor" means the firm of certified public accountants which at
the time of the Change in Control had been most recently engaged by Energen to
render an opinion on Energen's consolidated financial statements, or any other
firm of certified public accountants mutually agreeable to Energen and at least
eighty percent of the Participants holding Awards outstanding as of the date of
the Change in Control.

         13.      EFFECTIVE DATE OF THE PLAN. The effective date of the Plan
shall be November 25, 1997, the date of its adoption by the Board, subject to
approval by shareholders of Energen holding not less than a majority of the
shares present and voting at its January 1998 Annual Meeting. Awards may be
granted under the Plan by the Committee as provided herein prior but subject to
such subsequent shareholder approval of the Plan.

         14.      NAME. The Plan shall be known as the "Energen Corporation
1997 Stock Incentive Plan."

         15.      1997 DEFERRED COMPENSATION PLAN. If and to the extent
permitted under the Energen Corporation 1997 Deferred Compensation Plan (the
"Deferred Compensation Plan"), a Participant may elect, pursuant to the Deferred
Compensation Plan, to defer receipt of part or all of any shares of Stock or
other consideration deliverable under an Award and upon such deferral shall have
no further right with respect to such deferred Award other than as provided
under the Deferred Compensation Plan. In the event of such a deferral election,
certificates for such shares of Stock as would have otherwise been issued under
the Plan but for the deferral election, may at the discretion of Energen be
delivered to the Trustee under the Deferred Compensation Plan and registered in
the name of the Trustee or such other person as the Trustee may direct.
Regardless of whether such deferred shares of Stock are issued to the Trustee,
they shall constitute "issued" shares for purposes of the Plan's maximum number
of shares limitation set forth in Section 2.

         As approved by the Energen Corporation Board of Directors on November
25, 1997, and amended by the Board on October 27,1999 (effective as of October
1,1999), and October 25, 2000 (effective as of October 1, 2000).

                                             -----------------------------------
                                                     Assistant Secretary

                                       11

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