-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OSzfklxmjuf88dw8h11BIGTl8KCut3PdOChVSDgDA6CN9D/MjDoXs42APzty0T45 eUwTiwdnz3BizngB7OGk0Q== 0000277595-96-000014.txt : 19960816 0000277595-96-000014.hdr.sgml : 19960816 ACCESSION NUMBER: 0000277595-96-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENERGEN CORP CENTRAL INDEX KEY: 0000277595 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 630757759 STATE OF INCORPORATION: AL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07810 FILM NUMBER: 96615233 BUSINESS ADDRESS: STREET 1: 2101 SIXTH AVE N CITY: BIRMINGHAM STATE: AL ZIP: 35203 BUSINESS PHONE: 2053262742 MAIL ADDRESS: STREET 1: 2101 SIXTH AVE N CITY: BIRNINGHAM STATE: AL ZIP: 35203 FORMER COMPANY: FORMER CONFORMED NAME: ALAGASCO INC DATE OF NAME CHANGE: 19851002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALABAMA GAS CORP CENTRAL INDEX KEY: 0000003146 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 63022000 STATE OF INCORPORATION: AL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-70466 FILM NUMBER: 96615234 BUSINESS ADDRESS: STREET 1: 2101 SIXTH AVE NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 BUSINESS PHONE: 2053268100 MAIL ADDRESS: STREET 1: 2101 SIXTH AVE NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___ Commission IRS Employer File State of Identification Number Registrant Incorporation Number 1-7810 Energen Corporation Alabama 63-0757759 2-38960 Alabama Gas Corporation Alabama 63-0022000 2101 Sixth Avenue North Birmingham, Alabama 35203 Telephone Number 205/326-2700 Alabama Gas Corporation, a wholly owned subsidiary of Energen Corporation, meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with reduced disclosure format pursuant to General Instruction H(2). Indicate by a check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. YES X NO ____ Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of August 8, 1996: Energen Corporation, $0.01 par value 11,113,090 shares Alabama Gas Corporation, $0.01 par value 1,972,052 shares ENERGEN CORPORATION AND ALABAMA GAS CORPORATION FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 TABLE OF CONTENTS Page PART I: FINANCIAL INFORMATION (Unaudited) Item 1. Financial Statements (a)Consolidated Statements of Income of Energen Corporation. . . . . 4 (b)Consolidated Balance Sheets of Energen Corporation. . . . . . . . 5 (c)Consolidated Statements of Cash Flows of Energen Corporation. . . 7 (d)Statements of Income of Alabama Gas Corporation . . . . . . . . . 8 (e)Balance Sheets of Alabama Gas Corporation . . . . . . . . . . . . 9 (f)Statements of Cash Flows of Alabama Gas Corporation . . . . . . .11 (g)Notes to Unaudited Financial Statements . . . . . . . . . . . . .12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . . . .15 Selected Business Segment Data of Energen Corporation.19 PART II. OTHER INFORMATION Item 1. Legal Proceedings .20 Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . .21 SIGNATURES 21 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF INCOME Energen Corporation and Subsidiaries (Unaudited) Three months ended Nine months ended June 30, June 30, (in thousands, except share data) 1996 1995 1996 1995 Operating Revenues Natural gas distribution $ 77,225 $ 55,865 $ 312,553 $ 257,232 Oil and gas production activities 9,903 5,317 24,678 17,559 Other 579 580 1,677 1,757 Intercompany eliminations (577) (808) (1,968) (2,621) Total operating revenues 87,130 60,954 336,940 273,927 Operating Expenses Cost of gas 37,577 19,653 161,645 118,669 Operations 25,329 23,633 72,760 68,132 Maintenance 2,657 2,462 8,451 7,368 Depreciation, depletion, and amortization 10,588 7,017 27,567 21,167 Taxes, other than income taxes 6,968 4,951 24,090 19,835 Total operating expenses 83,119 57,716 294,513 235,171 Operating Income 4,011 3,238 42,427 38,756 Other Income (Expense) Interest expense, net of amounts capitalized (3,240) (2,703) (9,926) (8,091) Other, net 260 966 1,966 2,389 Total other income (expense) (2,980) (1,737) (7,960) (5,702) Income Before Income Taxes 1,031 1,501 34,467 33,054 Income taxes (40) 372 7,688 7,475 Net Income $ 1,071 $ 1,129 $ 26,779 $ 25,579 Earnings Per Average Common Share $ 0.10 $ 0.10 $ 2.44 $ 2.34 Dividends Per Common Share $ 0.29 $ 0.28 $ 0.87 $ 0.84 Average Common Shares Outstanding 11,020 10,897 10,991 10,908 The accompanying Notes are an integral part of these statements. CONSOLIDATED BALANCE SHEETS Energen Corporation and Subsidiaries (Unaudited) June 30, September 30, (in thousands) 1996 1995 ASSETS Property, Plant and Equipment Utility plant $ 531,419 $ 504,371 Less accumulated depreciation 261,232 247,926 Utility plant, net 270,187 256,445 Oil and gas properties, successful efforts method 154,406 117,339 Less accumulated depreciation, depletion and amortization 60,795 51,170 Oil and gas properties, net 93,611 66,169 Other property, net 4,060 4,650 Total property, plant and equipment, net 367,858 327,264 Current Assets Cash and cash equivalents 12,051 36,695 Accounts receivable, net of allowance for doubtful accounts of $2,312 at June 30, 1996 and $2,533 at September 30, 1995 44,865 30,813 Inventories, at average cost Storage gas 17,754 20,276 Materials and supplies 7,941 7,711 Liquefied natural gas in storage 1,741 3,539 Deferred gas costs 2,182 1,426 Regulatory asset 2,856 6,321 Deferred income taxes 6,843 9,667 Prepayments and other 9,542 2,583 Total current assets 105,775 119,031 Other Assets Deferred income taxes 240 0 Deferred charges and other 13,716 12,789 Total other assets 13,956 12,789 TOTAL ASSETS $ 487,589 $ 459,084 The accompanying Notes are an integral part of these statements. CONSOLIDATED BALANCE SHEETS Energen Corporation and Subsidiaries (Unaudited) June 30, September 30, (in thousands, except share data) 1996 1995 CAPITAL AND LIABILITIES Capitalization Preferred stock, cumulative $0.01 par value, 5,000,000 shares authorized $ $ Common shareholders' equity Common stock, $0.01 par value; 30,000,000 shares authorized, 11,059,576 shares outstanding at June 30, 1996 and 10,921,733 shares outstanding at September 30, 1995 111 109 Premium on capital stock 84,512 81,243 Capital surplus 2,802 2,802 Retained earnings 107,232 90,020 Treasury stock at cost, 11,627 shares at September 30, 1995 0 (250) Total common shareholders' equity 194,657 173,924 Long-term debt 130,652 131,600 Total capitalization 325,309 305,524 Current Liabilities Long-term debt due within one year 1,825 1,775 Notes payable to banks 19,000 32,300 Accounts payable 42,548 32,242 Accrued taxes 21,808 11,339 Customers' deposits 17,929 18,218 Amounts due customers (209) 13,231 Supplier refunds 16,860 3,315 Accrued wages and benefits 12,850 10,955 Other 16,679 14,923 Total current liabilities 149,290 138,298 Deferred Credits and Other Liabilities Deferred income taxes 0 2,540 Accumulated deferred investment tax credits 3,738 4,103 Other 9,252 8,619 Total deferred credits and other liabilities 12,990 15,262 Commitments and Contingencies 0 0 TOTAL CAPITAL AND LIABILITIES $487,589 $459,084 The accompanying Notes are an integral part of these statements. CONSOLIDATED STATEMENTS OF CASH FLOW Energen Corporation and Subsidiaries (Unaudited) Nine months ended June 30, (in thousands) 1996 1995 Operating Activities Net Income $ 26,779 $ 25,579 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 27,567 21,182 Deferred income taxes, net (572) (4,593) Deferred investment tax credits, net (365) (365) Gain on sale of assets (670) 0 Net change in: Accounts receivable (14,052) 1,777 Inventories 4,090 7,754 Deferred gas cost (756) (101) Accounts payable gas purchases 6,696 7,391 Accounts payable other trade 3,610 (3,845) Other current assets and liabilities 10,373 11,494 Other, net 1,240 (201) Net cash provided by operating activities 63,940 66,072 Investing Activities Additions to property, plant and equipment (68,941) (40,465) Proceeds from sale of assets 2,478 0 Payments on notes receivable 1,179 632 Other, net (84) 101 Net cash used in investing activities (65,368) (39,732) Financing Activities Payment of dividends on common stock (9,567) (9,170) Issuance of common stock 2,527 116 Purchase of treasury stock (1,978) (740) Reduction of long-term debt and preferred stock of subsidiary (898) (9,422) Proceeds from issuance of medium-term notes 0 33,768 Net change in short-term debt (13,300) (6,000) Net cash provided by (used in) financing activities (23,216) 8,552 Net change in cash and cash equivalents (24,644) 34,892 Cash and cash equivalents at beginning of period 36,695 27,526 Cash and Cash Equivalents at End of Period $ 12,051 $ 62,418 The accompanying Notes are an integral part of these statements. STATEMENTS OF INCOME Alabama Gas Corporation (Unaudited) Three months ended Nine months ended June 30, June 30, (in thousands) 1996 1995 1996 1995 Operating Revenues $ 77,225 $ 55,865 $ 312,553 $ 257,232 Operating Expenses Cost of gas 38,154 20,461 163,613 121,290 Operations 20,333 19,380 60,923 57,589 Maintenance 2,624 2,442 8,332 7,277 Depreciation 5,410 4,870 15,661 14,391 Income taxes Current 1,760 (291) 11,722 15,339 Deferred, net (938) 1,033 820 (3,742) Deferred investment tax credits, net (122) (122) (365) (365) Taxes, other than income taxes 6,366 4,709 22,814 19,098 Total operating expenses 73,587 52,482 283,520 230,877 Operating Income 3,638 3,383 29,033 26,355 Other Income Allowance for funds used during construction 131 282 818 691 Other, net (88) 166 (528) 409 Total other income 43 448 290 1,100 Interest Charges Interest on long-term debt 1,733 1,713 5,605 5,150 Other interest expense 568 346 1,706 1,515 Total interest charges 2,301 2,059 7,311 6,665 Net Income Available for Common $ 1,380 $ 1,772 $ 22,012 $ 20,790 The accompanying Notes are an integral part of these statements. BALANCE SHEETS Alabama Gas Corporation (Unaudited) June 30, September 30, (in thousands) 1996 1995 ASSETS Property, Plant and Equipment Utility plant $ 531,419 $ 504,371 Less accumulated depreciation 261,232 247,926 Utility plant, net 270,187 256,445 Other property, net 398 193 Current Assets Cash and cash equivalents 3,114 727 Accounts receivable Gas 33,843 22,215 Merchandise 2,494 1,546 Other 1,047 1,399 Associated Companies 8,066 199 Allowance for doubtful accounts (2,298) (2,000) Inventories, at average cost Storage gas 17,754 20,276 Materials and supplies 6,089 5,860 Liquefied natural gas in storage 1,741 3,539 Deferred gas costs 2,182 1,426 Regulatory asset 2,856 6,321 Deferred income taxes 4,742 7,416 Prepayments and other 1,583 2,302 Total current assets 83,213 71,226 Deferred Charges and Other Assets 7,652 7,403 TOTAL ASSETS $ 361,450 $ 335,267 The accompanying Notes are an integral part of these statements. BALANCE SHEETS Alabama Gas Corporation (Unaudited) June 30, September 30, (in thousands, except share data) 1996 1995 CAPITAL AND LIABILITIES Capitalization Common shareholder's equity Common stock, $0.01 par value; 3,000,000 shares authorized, 1,972,052 shares outstanding at June 30, 1996 and September 30, 1995 $ 20 $ 20 Premium on capital stock 31,682 31,682 Capital surplus 2,802 2,802 Retained earnings 100,095 87,638 Total common shareholder's equity 134,599 122,142 Cumulative preferred stock, $0.01 par value, 120,000 shares authorized, issuable in series $4.70 Series 0 0 Long-term debt 100,000 100,000 Total capitalization 234,599 222,142 Current Liabilities Long-term debt due within one year 0 0 Notes payable to banks 0 0 Accounts payable 28,919 26,160 Accrued taxes 21,844 10,236 Customers' deposits 17,929 18,218 Supplier refunds due customers 16,860 3,315 Other amounts due customers (209) 13,231 Accrued wages and benefits 6,976 5,228 Other 9,653 9,444 Total current liabilities 101,972 85,832 Deferred Credits and Other Liabilities Deferred income taxes 15,105 16,343 Accumulated deferred investment tax credits 3,738 4,103 Regulatory liability 5,244 6,001 Customer advances for construction and other 792 846 Total deferred credits and other liabilities 24,879 27,293 Commitments and Contingencies 0 0 TOTAL CAPITAL AND LIABILITIES $ 361,450 $ 335,267 The accompanying Notes are an integral part of these statements. STATEMENTS OF CASH FLOW Alabama Gas Corporation (Unaudited) Nine months ended June 30, (in thousands) 1996 1995 Operating Activities Net Income $ 22,012 $20,790 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,661 14,391 Deferred income taxes, net 820 (3,742) Deferred investment tax credits (365) (365) Net change in: Accounts receivable (11,826) (14) Inventories 4,091 8,024 Deferred gas costs (756) (101) Accounts payable gas purchases 6,696 7,391 Accounts payable other trade (3,937) (2,705) Other current assets and liabilities 19,603 8,838 Other, net (3,245) (519) Net cash provided by operating activities 48,754 51,988 Investing Activities Additions to property, plant and equipment (28,580) (27,992) Net advances to affiliates (7,967) 0 Other, net (265) (275) Net cash used in investing activities (36,812) (28,267) Financing Activities Payment of dividends on common stock (9,555) (9,170) Reduction of long-term debt 0 (1,636) Proceeds from issuance of medium-term notes 0 33,768 Net advances from affiliates 0 544 Net change in short-term debt 0 (4,000) Net cash provided by (used in) financing activities (9,555) 19,506 Net change in cash and cash equivalents 2,387 43,227 Cash and cash equivalents at beginning of period 727 156 Cash and Cash Equivalents at End of Period $ 3,114 $ 43,383 NOTES TO UNAUDITED FINANCIAL STATEMENTS Energen Corporation and Alabama Gas Corporation 1. BASIS OF PRESENTATION All adjustments to the unaudited financial statements which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim periods have been recorded. Such adjustments consisted only of normal recurring items. The consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes for the years ended September 30, 1995, 1994, and 1993 included in the 1995 Annual Report of Energen Corporation (the Company) on Form 10-K. Certain reclassifications were made to conform prior years' financial statements to the current quarter presentation. The Company's primary business is seasonal in character and influenced by weather conditions. Results of operations for the interim periods are not necessarily indicative of the results which may be expected for the fiscal year. 2. REGULATORY As an Alabama utility, Alagasco is subject to regulation by the APSC which, in 1983, established the Rate Stabilization and Equalization (RSE) rate-setting process. RSE was extended for the third time on December 3, 1990, for a three-year period. Under the terms of that extension, RSE shall continue after November 30, 1993, unless, after notice to the Company, the Commission votes to either modify or discontinue its operation. On October 4, 1993, the Commission unanimously voted to extend RSE until such time as certain hearings mandated by the Energy Policy Act of 1992 (Energy Act) in connection with integrated resource planning and demand side management programs are completed. The Energy Act proceedings are expected to conclude during fiscal 1996 or early 1997 at which time it is expected that the Commission will begin reviewing Alagasco's RSE. While no time table for review has yet been established, on August 8, 1996, Alagasco filed with the APSC an application to, among other things, extend RSE and conclude the Energy Act review. Under RSE as extended, the APSC conducts quarterly reviews to determine, based on Alagasco's projections and fiscal year-to-date performance, whether Alagasco's return on equity for the fiscal year will be within the allowed range of 13.15 percent to 13.65 percent. Reductions in rates can be made quarterly to bring the projected return within the allowed range; increases, however, are allowed only once each fiscal year, effective December 1, and cannot exceed 4 percent of prior-year revenues. RSE limits the utility's equity upon which a return is permitted to 60 percent of total capitalization and provides for certain cost control measures designed to monitor the Company's operations and maintenance (O&M) expense. If the change in O&M expense per customer falls within 1.25 percentage points above or below the Consumer Price Index For All Urban Customers (index range), no adjustment is required. If, however, the change in O&M expense per customer exceeds the index range, three-quarters of the difference will be returned to the customers. To the extent the change in O&M expense per customer is less than the index range, the utility will benefit by one-half of the difference through future rate adjustments. Under RSE as extended, an $8.2 million annual increase in revenue became effective December 1, 1995. Effective December 15, 1990, the APSC approved a temperature adjustment to customers' monthly bills to remove the effect of departures from normal temperature on Alagasco's earnings. The calculation is performed monthly, and the adjustments to customers' bills are made in the same month the weather variation occurs. The Company's rate schedules for natural gas distribution charges contain a Gas Supply Adjustment (GSA) rider, established in 1993. The rider permits the pass through to customers of changes in the cost of gas supply, including Gas Supply Realignment (GSR) surcharges imposed by the Company's suppliers resulting from changes in gas supply purchases related to the implementation of FERC Order 636. On June 12, 1995, the APSC approved Alagasco's application to issue $50 million of new debt. A portion of the proceeds was used to redeem all of Alagasco's 9 percent debentures and 11 percent First Mortgage Bonds. In connection with the early call of the redeemed debt, Alagasco paid an early call premium of approximately $1.3 million during the fourth quarter of fiscal 1995. Because the APSC Order authorized Alagasco to collect the early call premium through customer rates during the fiscal year ending September 30, 1996, Alagasco recorded a regulatory asset of $1.3 million during the quarter ended September 30, 1995, with approximately $.2 million remaining at June 30, 1996. In accordance with APSC-directed regulatory accounting procedures, Alagasco in 1989 began returning to customers excess utility deferred taxes which resulted from a reduction in the federal statutory tax rate from 46 percent to 34 percent using the average rate assumption method. This method provides for the return to ratepayers of excess deferred taxes over the lives of the related assets. In 1993 those excess taxes were reduced as a result of a federal tax rate increase from 34 percent to 35 percent. Approximately $2.9 million of the remaining excess utility deferred taxes is being returned to ratepayers over approximately 15 years. FERC Regulation: On March 15, 1995, Southern Natural Gas Company (Southern) filed a comprehensive settlement with the FERC in the form of a Stipulation and Agreement (the Settlement) to resolve all issues in Southern's six pending rate cases, as well as to resolve all GSR and transition cost issues resulting from the implementation of FERC Order 636. The Settlement is supported by parties representing more than 90 percent of the firm transportation demand on Southern's system, including local distribution companies (including Alagasco), municipal distribution systems, major gas producers, large industrial end users, marketers, and state commissions (including the APSC). On September 29, 1995, the FERC issued its Order Accepting Settlement, Severing Contesting Parties, and Issuing Certificates and Approving Abandonment (Settlement Order). The Settlement Order approves the Settlement with minor modifications. Contesting parties had 30 days from the date of the Settlement Order to file motions for rehearing and several such motions were timely filed. On April 11, 1996, the FERC issued its Order on Rehearing approving the Settlement with minor modifications. Specifically, the Settlement provides for the following: (1) the resolution of all cost of service and rate design issues in Southern's six pending rate cases and the establishment of reduced rates for the purpose of calculating rate case refunds; (2) the implementation of reduced settlement rates on an interim basis for supporting parties commencing March 1, 1995 (by order dated April 4, 1995, FERC approved these interim rates pending its final review of the merits of the Settlement); (3) the resolution of all GSR and other transition cost issues resulting from FERC Order 636; (4) lower GSR cost recovery through the reduction and earlier payout of GSR costs; (5) a three-year moratorium on general rate increases; and (6) the resolution and disposition of all rate case and GSR refunds for supporting parties. With respect to this last point, the Settlement provides that all rate case refunds will be used to offset a portion of Southern's remaining GSR liability. In addition, as a result of the recalculated GSR surcharges for the period January 1, 1994, to February 28, 1995, Southern refunded over-collected GSR costs, Alagasco's share of which has been determined to be $16.9 million. This amount is recorded in the accompanying financial statements as supplier refunds due customers. The Settlement will allow Southern and the supporting parties to resolve all issues relating to GSR and other transition costs, the majority of which costs will be collected from customers by the end of calendar 1996. Alagasco estimates that it has a remaining GSR liability of approximately $1.0 million to be paid through March 1997 and approximately $1.7 million in other transition costs to be paid through June 1998. Such amounts have been recorded as a liability in the financial statements. Because these costs will be recovered in full from Alagasco's customers in a timely manner through the GSA rider of Alagasco's Tariff, the Company has recorded a corresponding regulatory asset in the accompanying financial statements. 3. SUPPLEMENTAL CASH FLOW INFORMATION Energen Corporation Nine months ended June 30, (in thousands) 1996 1995 Interest paid, net of amounts capitalized $ 10,846 $ 10,101 Income taxes paid $ 1,745 $ 3,642 Noncash investing activities (capitalized depreciation and allowance for funds used during construction) $ 944 $ 815 Alabama Gas Corporation Nine months ended June 30, (in thousands) 1996 1995 Interest paid $ 8,866 $ 8,816 Income taxes paid $ 3,535 $ 8,154 Noncash investing activities (capitalized depreciation and allowance for funds used during construction) $ 944 $ 815 4. CONTINGENCIES Energen, Alagasco, and their affiliates are, from time to time, parties to various pending or threatened legal proceedings. Certain of these lawsuits include claims for punitive damages in addition to other specified relief. Based upon information presently available, and in light of available legal and other defenses, contingent liabilities arising from threatened and pending litigation are not considered material in relation to the respective financial positions of Energen and Alagasco. It should be noted, however, that Energen, Alagasco and their affiliates do business in Alabama and other jurisdictions in which the magnitude and frequency of punitive damage awards bearing little or no relation to culpability or actual damages continue to rise making it increasingly difficult to predict litigation results. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations For the third quarter of fiscal 1996, Energen's net income totaled $1,071,000 (10 cents per share) which approximates the level earned in the prior year's third quarter of $1,129,000 (10 cents per share). Taurus Exploration, Energen's oil and gas exploration and production subsidiary, reported modest gains in the third quarter largely due to increased production-related income and decreased administrative expense. Partially offsetting these gains were increased depreciation, depletion and amortization (DD&A) rates and higher exploration and interest expenses. Energen's natural gas distribution company, Alabama Gas Corporation (Alagasco), continued to earn its allowed return on a higher level of utility investment but contributed slightly less to consolidated earnings for the three months ended June 30 due to the timing of operation and maintenance expenses. For the 1996 fiscal year-to-date, Energen's net income totaled $26,779,000 ($2.44 per share). This compares with income of $25,579,000 ($2.34 per share), for the first nine months of the prior fiscal year. Alagasco's increased contribution to consolidated earnings primarily was due to the gas distribution company earning its allowed return on a higher level of utility investment. Excluding a $0.5 million gain from a contract buy out in the prior period, Taurus's year-to-date earnings rose modestly. Increases in production-related income and gas prices and decreased administrative expenses were partially offset by increased DD&A rates and higher exploration and interest expenses. Natural gas revenues increased significantly in the current quarter and year-to-date primarily because of colder weather which resulted in residential sales volumes rising 41 percent and 22 percent, respectively, and in higher natural gas prices. Neither temperature variances nor gas price fluctuations affect Alagasco's residential operating margins; the APSC-approved temperature adjustment provision allows customer bills to be adjusted on a real-time basis to reflect usage under normal temperature conditions, and gas costs are passed through to the customer through the company's gas supply adjustment rider. In the third quarter, revenues from oil and gas production activities rose significantly. Oil volumes more than tripled and natural gas volumes increased more than 70 percent, the result of current-year acquisitions and prior-year discoveries coming on line. The impact of higher production was magnified by increased average sales prices for both gas and oil. In the third quarter, after giving effect to hedged volumes, the average sales price per Mcf of natural gas was $1.81 compared to $1.79 in the prior year, and the average sales price per barrel of oil was $16.92 compared to $14.37 in the prior year. Increased production volumes and prices similarly influenced nine month results. Natural gas and oil production increased 1.6 Bcf equivalent each and, after giving effect to hedged volumes, the average sales price per Mcf of natural gas was $1.90 compared to $1.79 in the prior year, and the average sales price per barrel of oil was $16.09 compared to $15.13 in the prior year. Slightly offsetting the impact of current year production and pricing increases was the inclusion in the prior year of revenues associated with the buyout of a long-term sales contract ($0.8 million). Operating and consulting fees did not vary significantly for the quarter or year-to-date. To hedge its exposure to energy price fluctuations on oil and gas production over the remainder of this fiscal year, Taurus has entered into contracts for the sale of 3.1 Bcf of its gas production at an average contract price of $2.19 per Mcf and for the sale of 139 MBbl of its oil production at an average contract price of $18.15 per Bbl. At June 30, 1996, the Company's deferred losses related to its futures contracts totaled $1.6 million. The program has been extended into fiscal 1997. Hedges and contracts are in place for the sale of 15.3 Bcf of gas production with an average contract price of $2.15 per Mcf and for the sale of 88 MBbl of oil at an average contract price of $18.76 per Bbl. Increased utility volumes, primarily associated with colder weather, and increased commodity cost of natural gas resulted in an increase in cost of gas for both periods. For the quarter, consolidated operations and maintenance expense (O&M) increased 7.2 percent due primarily to increased marketing expenses at Alagasco and higher lease operating and exploration expenses at Taurus. For the year-to-date, increased distribution activities associated with colder weather at Alagasco combined with the above to create a 7.6 percent increase in O&M. The significant increase in depreciation expense for the quarter and nine months is related primarily to increased production volumes, an increased DD&A rate associated with prior year reserve revisions and the addition of production from new wells with a higher average DD&A rate at Taurus, plus the effects of normal plant growth at Alagasco. The Company's expense for taxes other than income primarily reflects the various state and local income and business taxes paid by Alagasco as well as various payroll-related taxes. State and local business taxes are generally based on gross receipts of Alagasco and fluctuate accordingly. Higher average short-term debt outstanding related to the initial financing of Taurus's multi-year acquisition and development strategy was primarily responsible for the increase in interest expense for the quarter and year-to-date. The reduction in other income for the quarter was primarily due to the amortization of the call premium associated with Alagasco's early redemption of long-term debt during the fourth quarter of fiscal 1995. For the year-to-date, the impact of this amortization was offset by income from the sale of Taurus properties during the first quarter. The variance in income tax expense for the quarter was due largely to the effect of lower consolidated pretax income coupled with increased recognition of nonconventional fuel tax credits on an interim basis. For the year-to-date, higher consolidated pretax income was largely offset by increased recognition of nonconventional fuel tax credits on an interim basis resulting in relatively stable tax expense between years. The Company's effective tax rates are expected to remain lower than statutory federal rates through December 31, 2002, as tax credits generated each year are expected to be fully recognized. As previously discussed, the Company's business is seasonal in character and influenced by weather conditions. Results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year. As more fully discussed in Note 2, Alagasco is subject to regulation by the APSC, which is expected to consider renewal of the utility's rate-setting mechanism following the completion of its review of certain mandates under the Energy Policy Act of 1992. Changes, if any, to the utility's present rate-setting assumptions or provisions could have an impact on its net income. Liquidity and Capital Resources Weather colder than that of the prior year has continued to impact cash provided by operations due to its effect on the timing of payment and collection of certain gas supply costs and its effect on Alagasco's need to utilize and replenish its storage gas inventory. The impact of these items largely offset each other for the nine months. Fluctuations in receivables and payables have been influenced by greater throughput in the current year and are also the result of timing of payments. The $25.6 million increase in cash used in investing activities is largely the result of Taurus's initial acquisition investment of $26.4 million for producing oil and gas properties adding approximately 18.6 Bcf of gas and 3.8 Mmbl of oil, and an additional $13.2 million in offshore exploration and development. Offsetting that impact was the receipt of proceeds from the sale of certain proved producing properties at Taurus. Included in Alagasco's capital expenditures for the nine months was $3.1 million for the acquisition of two municipal gas systems adding 1,600 additional customers. The $31.8 million increase in cash used in financing activities is largely the result of activities in the prior year. During the nine months ended June 30, 1995, Alagasco issued $33.8 million in medium-term notes the proceeds of which were used to redeem its 9 percent debentures and its 11 percent first mortgage bonds. Future Capital Expenditures and Liquidity The most significant event influencing the Company's future capital expenditures and liquidity is Taurus's plan to increase its level of investment in the exploration and production business in order to generate desired earnings growth, increase shareholder return, and increase total market capitalization. In the five year period beginning with the current fiscal year, Taurus plans to invest in excess of $400 million for property acquisitions and related development and an additional $100 million for offshore exploration and development. To this end, in mid-1995, Taurus entered into a three-and-one-half year agreement with Sonat Exploration Company committing to invest annually up to between $25 million and $50 million as its proportionate share of acquisitions in fiscal years through 1998. Thus far this year, Taurus has invested $26 million for conventional oil and gas reserves, including $21 million under terms of the Sonat agreement. On July 31, with an effective date of July 1, Taurus acquired 100 percent working interest in the Black Warrior Basin coalbed methane properties of Houston-based Burlington Resources Inc. for $61 million. The properties are part of Burlington Resources' recently announced accelerated divestiture program. In addition to ownership, Taurus will operate the properties. Current production is located on more than 19,000 gross acres adjacent to existing Taurus coalbed methane interests in west central Alabama. The properties include more than 100 economic wells and estimated net proved reserves of 100 billion cubic feet (Bcf). Substantially all of the reserves are classified as proved producing, with net annual production currently exceeding 4.5 Bcf. Through the year 2002, production from 43 of the wells qualifies for the Nonconventional Fuels Tax Credit, which presently is valued at approximately $1 per thousand cubic feet of production and increases annually with inflation. Under its existing area of mutual interest agreements (AMI), Taurus has offered proportionate participation in certain portions of the acquired properties to two of its coalbed methane partners. Participation was not exercised in the primary AMI; partners in the second AMI have until August 20 to exercise their participation rights. If participation were exercised, the partners' interest would represent less than 20 percent of the total. Any exercising partner would incur significant operating and administrative fees payable to Taurus. The Company has short-term credit facilities of $116 million that it has used and will use to initially acquire properties, but long-term debt and equity will be issued for permanent financing of these investments. The Company expects to refinance a portion of its current year acquisitions through the issuance of long-term debt during the fourth quarter of this fiscal year. The exact timing of the permanent financing for future acquisitions is undeterminable at this time as the Company does not know the exact pace of acquisitions. Consolidated capital and exploration expenditures could approximate $150 million in fiscal 1996, excluding additional municipal gas system acquisitions. Of that, Taurus may invest in excess of $100 million for property acquisitions and related development, as well as offshore exploration and development. Taurus's ability to invest in property acquisitions will be significantly influenced by industry trends as the producing property acquisition market has historically been cyclical. Alagasco expects to invest $48 million in fiscal 1996, excluding additional municipal gas system acquisition, and primarily represents additions for normal distribution system expansion. Recent Pronouncements of the FASB In June 1995, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The Company is required to adopt this Statement in its 1997 fiscal year but, based on known facts and circumstances, implementation is not expected to have a material impact on the Company's financial statements. In October 1995, SFAS No. 123, Accounting for Stock-Based Compensation, was issued and also requires adoption by the Company in its fiscal year 1997. The implementation of SFAS No. 123 is not expected to have a material impact on the Company's financial statements. In June 1996, SFAS No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, was issued and requires adoption by the Company in its fiscal year 1998. The implementation of SFAS No. 125 is not expected to have a material impact on the Company's financial statements. SELECTED BUSINESS SEGMENT DATA Energen Corporation Three months ended Nine months ended June 30, June 30, (in thousands, except share data) 1996 1995 1996 1995 Natural Gas Distribution Operating revenues Residential $ 51,250 $ 36,311 $ 211,315 $ 172,763 Commercial and industrial - small 19,091 12,790 76,520 60,222 Commercial and industrial - large 27 23 758 271 Transportation 6,706 6,981 23,652 23,814 Other 151 (240) 308 162 Total $ 77,225 $ 55,865 $ 312,553 $ 257,232 Volumes sold and transported (Mcf) Residential 6,695 4,626 32,672 25,132 Commercial and industrial - small 3,028 2,341 13,410 10,679 Commercial and industrial - large 5 7 24 23 Transportation 14,758 14,930 45,932 45,016 Total 24,486 21,904 92,038 80,850 Other data Depreciation and amortization $ 5,410 $ 4,870 $ 15,661 $ 14,391 Capital expenditures $ 10,977 $ 11,591 $ 29,524 $ 28,807 Operating income $ 4,338 $ 4,003 $ 41,210 $ 37,587 Oil and Gas Exploration and Production Operating revenues Natural gas $ 5,774 $ 3,347 $ 14,620 $ 10,859 Oil 3,266 862 6,973 2,557 Other 863 1,108 3,085 4,143 Total $ 9,903 $ 5,317 $ 24,678 $ 17,559 Sales volume - natural gas (Mcf) 3,192 1,866 7,676 6,075 Sales (barrels) 193 60 433 169 Average sales price - natural gas (per Mcf) $ 1.81 $ 1.79 $ 1.90 $ 1.79 Average sales price - oil (per barrel) $ 16.92 $ 14.37 $ 16.09 $ 15.13 Other data Depreciation, depletion and amortization $ 5,050 $ 2,048 $ 11,516 $ 6,470 Capital expenditures $ 6,016 $ 2,713 $ 40,316 $ 12,450 Exploration expenditures $ 1,771 $ 1,251 $ 2,999 $ 1,867 Operating income $ (197) $ (637) $ 1,920 $ 1,982 Other Businesses Operating revenues $ 579 $ 580 $ 1,677 $ 1,757 Depreciation and amortization $ 128 $ 99 $ 390 $ 306 Capital expenditures $ 27 $ 5 $ 45 $ 23 Operating income $ 99 $ 108 $ 245 $ 135 Eliminations and Corporate Expenses Operating loss $ (229) $ (236) $ (948) $ (948) PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Energen, Alagasco, and their affiliates are, from time to time, parties to various pending or threatened legal proceedings. Certain of these lawsuits include claims for punitive damages in addition to other specified relief. Based upon information presently available, and in light of available legal and other defenses, contingent liabilities arising from threatened and pending litigation are not considered material in relation to the respective financial positions of Energen and Alagasco. It should be noted, however, that Energen, Alagasco and their affiliates do business in Alabama and other jurisdictions in which the magnitude and frequency of punitive damage awards bearing little or no relation to culpability or actual damages continue to rise making it increasingly difficult to predict litigation results. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits 10 (a) Form of Restated Executive Retirement Supplement Agreement between Energen Corporation and Certain Executive Officers 10 (b) Form of Severance Compensation Agreement between Energen Corporation and Certain Executive Officers 27.1 Financial data schedule of Energen Corporation (for SEC purposes only) 27.2 Financial data schedule of Alabama Gas Corporation (for SEC purposes only) b. Reports on Form 8-K No reports on Form 8-K were filed for the three months ended June 30, 1996. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ENERGEN CORPORATION ALABAMA GAS CORPORATION August 14, 1996 By/s/ Rex J. Lysinger Rex J. Lysinger Chairman of the Board of Directors of Energen and all subsidiaries, Chief Executive Officer of Energen August 14, 1996 By/s/ G. C. Ketcham G. C. Ketcham Executive Vice President, Chief Financial Officer and Treasurer August 14, 1996 By/s/ Paula H. Rushing Paula H. Rushing Controller of Alagasco EX-10 2 Form Rev. 4/17/96 Exhibit 10(a) RESTATED EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT THIS RESTATED EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT made effective as of between Energen Corporation, a corporation (the "Company"), and (the "Executive"). R E C I T A L S The Executive has been employed by the Company and/or one or more of its subsidiaries for a number of years, and as an employee has provided capable executive leadership and management so as to enable the Company to operate efficiently and effectively. The Company and the Executive heretofore entered into that certain agreement captioned Executive Retirement Supplement Agreement and dated _____________, 19___ as heretofore amended (the "Original Agreement") to provide for payment to the Executive and his eligible spouse certain deferred compensation in the form of a retirement supplement under certain circumstances. The Company and the Executive now desire to amend and restate the Original Agreement. NOW, THEREFORE, in consideration of the mutual promises of the parties and in accordance with the provisions of Section 3.1 of the Original Agreement, the Original Agreement is hereby amended to read as follows: ARTICLE 1--DEFINITIONS 1.1 Agreement: This document, including any attached schedules, and any amendments to the same. 1.2 Birthday: An anniversary of the Executive's birth regardless of whether he survives to such anniversary. 1.3 Cause: Termination of employment by the Employer for "Cause" shall mean termination based on any of the following: (a) The willful and continued failure by the Executive to substantially perform such Executive's duties with the Employer (other than any such failure resulting from such Executive's incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive specifically identifying the manner in which such Executive has not substantially performed such Executive's duties; (b) The engaging by the Executive in willful misconduct which is demonstrably injurious to the Employer monetarily or otherwise; or (c) The conviction of the Executive of a felony. 1.4 Code: The Internal Revenue Code of 1986, as the same may from time to time be amended. 1.5 Committee: The Officers Review Committee of the Board of Directors of the Company or any person or persons appointed by the Board of Directors to administer the Agreement. 1.6 Compensation: The sum of A plus B. For purposes of this definition, A shall equal the average aggregate monthly basic pay from all Employers for the 36 consecutive calendar months during which the Executive had the highest average monthly basic pay out of the 60 calendar months immediately preceding the Severance Date. For purposes of this definition, B shall equal C divided by 12, where C equals the average of the Executive's three highest annual cash incentive awards under the Energen Annual Incentive Compensation Plan (or successor annual cash incentive plan) for the five Company fiscal years immediately preceding the earlier of (i) the fiscal year during which the Severance Date occurs or (ii) the fiscal year during which the Executive's 61st birthday occurs. 1.7 Disability: Total and permanent disability which entitles the Executive to a disability benefit under the disability program sponsored and/or maintained by the Company or his Employer. 1.8 Eligibility Date: The earliest date on which the Executive could be entitled to receive his "primary insurance amount" or any portion thereof under the federal Social Security Act as amended and in effect on the Severance Date assuming that the Executive survives to such date. 1.9 Employer: The Company and any and all subsidiaries of the Company and their respective successors and assigns. 1.10 Lump Sum Election: An election made by the Executive pursuant to Section 2.5 to receive a lump sum payment in lieu of the Supplemental Retirement Benefit. 1.11 Normal Retirement Date: The first day of the month on or next following the Executive's 60th Birthday; provided, however, if the Executive's employment with an Employer continues beyond such date, the first day of the month on or next following the date on which the Executive actually Retires shall be his Normal Retirement Date. 1.12 Present Value: The present value of a benefit or benefits determined using the discount rate used to determine the present value of payments under Section 280G of the Code that is in effect at the date payment is to be made and the mortality assumptions utilized to determine actuarial equivalent benefits under the Retirement Plan at that date. 1.13 Retire or Retirement: Termination of employment (for whatever reason including death) from all Employers after attaining age 60. 1.14 Retirement Plan: The "Energen Corporation Retirement Income Plan," as the same may be amended and in effect from time to time hereafter. 1.15 Retirement Plan Benefit: The monthly amount of retirement benefit payable to the Executive from the Retirement Plan in the normal form, with no election of an optional form of payment, calculated under the terms of the Retirement Plan as in effect on the Severance Date and with the following assumptions: (i) the Executive will accrue no Years of Service or partial Years of Service under the Retirement Plan after the Severance Date; (ii) the first payment to the Executive under the Retirement Plan will be made on the first day of the month on or next following the later of the Executive's 60th Birthday or the Severance Date; and (iii) the Executive will live to the payment date described in the preceding clause (ii). 1.16 Service: The number of the Executive's completed months of continuous employment with the Employer ending on the Executive's Severance Date. 1.17 Service Factor: If the Executive has 240 or more months of Service then the Service Factor shall equal one (l). At any time prior to the time when the Executive has both earned a vested benefit under the Retirement Plan and been continuously employed by an Employer for five years, the Service Factor shall be 0. Except as otherwise provided in the foregoing sentences, the Service Factor shall be a fraction, the numerator of which shall be the number of the Executive's months of Service and the denominator of which shall be 240. 1.18 Severance Date: The earlier of (i) the first date on which (for whatever reason) the Executive is no longer employed by an Employer, or (ii) the date of termination of this Agreement pursuant to Article 3. 1.19 Social Security Benefit: The amount of the monthly benefit, as estimated by the Committee in a consistent and uniform manner, which, under the provisions of the federal Social Security Act as amended and in effect on the Severance Date, such Executive is, or will be, entitled to receive as his "primary insurance amount" or any portion thereof at the later of the Eligibility Date or the Normal Retirement Date assuming (i) that he has or will make appropriate and timely application for such benefit, (ii) that no event has occurred or will occur by reason of which the amount of such benefit has been or will be delayed, suspended or forfeited in whole or in part, (iii) that if the Severance Date occurs prior to the Executive's 60th Birthday, the Executive will continue to receive, until his 60th Birthday, earnings at the Compensation rate taxable as wages by the Social Security Act, and (iv) that, after the later to occur of the Executive's 60th birthday or Normal Retirement Date, the Executive will have no further earnings taxable as wages by the Social Security Act. 1.20 Spouse: The spouse to whom the Executive was married at the date of his death and throughout the twelve-month period preceding his Severance Date. 1.21 Supplemental Retirement Benefit: The benefit described in Section 2.2. 1.22 Supplemental Spouse's Retirement Benefit: The benefit described in Section 2.3. 1.23 The masculine gender shall be deemed to include the feminine; the feminine to include the masculine; the singular to include the plural; and the plural to include the singular in each case where appropriate. ARTICLE 2 - - BENEFITS 2.1 Eligibility. The Executive and Spouse, as applicable, shall be entitled to the benefits described in Sections 2.2 and 2.3; provided, that no benefits shall be paid under this Agreement if (i) the Executive's employment by an Employer is terminated for Cause, or (ii) the Severance Date occurs for any reason before the Executive has both earned a vested benefit under the Retirement Plan and been continuously employed by an Employer for five years. 2.2 Supplemental Retirement Benefit. Subject to the other provisions of this Agreement, commencing on the Executive's Normal Retirement Date the Executive shall be entitled to receive a Supplemental Retirement Benefit, which shall be payable monthly during the Executive's life with the last payment being the payment made or due for the month in which the Executive dies. No benefit shall be payable under this Section 2.2 if the Executive dies on or before the Normal Retirement Date. The Supplemental Retirement Benefit shall be an amount equal to the product of "A" multiplied by the Service Factor. With respect to Supplemental Retirement Benefit payments made for periods commencing prior to the Eligibility Date, "A" shall equal the amount by which 60% of Compensation exceeds the Retirement Plan Benefit. With respect to Supplemental Retirement Benefit payments made for periods commencing on or after the Eligibility Date, "A" shall equal the amount by which 60% of Compensation exceeds the sum of the Retirement Plan Benefit plus the Social Security Benefit. If the Executive terminates employment due to Disability, (i) the period that the Executive receives disability benefits from a disability program sponsored or maintained by an Employer shall be treated as Service, and (ii) the Supplemental Retirement Benefit shall not commence, and the Executive shall not be deemed to have had a Severance Date, while the Executive is receiving disability benefits payable from a disability program sponsored or maintained by an Employer. For purposes of this Section 2.2, reclassification under the Retirement Plan from Disability Retirement to Retirement shall constitute cessation of disability benefits. 2.3 Supplemental Spouse's Retirement Benefit. (a) Subject to the other provisions of this Agreement, following the Executive's death the surviving Spouse shall be entitled to a Supplemental Spouse's Retirement Benefit, which shall be payable monthly commencing on the later of (i) the first day of the month following the month of the Executive's death or (ii) the first day of the month of the Executive's 55th Birthday, and continuing until the Spouse's death. The Supplemental Spouse's Retirement Benefit shall be an amount equal to 50% of the monthly Supplemental Retirement Benefit which the Executive would have been entitled to receive had death not occurred (based on Service through the Severance Date and adjusting on the Eligibility Date); provided that if the Executive's death occurs after the Severance Date, for each of the first three months following the Executive's death the Supplemental Spouse's Retirement Benefit shall be 100% of such amount. (b) If the Executive shall die while a Lump Sum Election is in effect and while the Executive is still employed by the Employer, the surviving Spouse shall receive in lieu of the benefit described in Section 2.3(a) above, a lump sum payment equal to one-half of the Present Value of the Supplemental Retirement Benefit which the Executive would have been entitled to receive based on Service through the Severance Date if the Executive had survived to the Normal Retirement Date. Such benefit shall be paid as promptly as practicable after the Executive's death and, in all events, within forty-five (45) days after the Executive's death. For purposes of this Section 2.3(b), the determination of whether a Spouse has survived the Executive shall be made in accordance with the provisions of Section 43-8-43 of the Code of Alabama of 1975, as the same may from time to time be amended (as of the date of this Agreement, Section 43-8-43 generally treats a person as having predeceased a decedent unless the person survives the decedent by five days). (c) If the Executive shall die after the Severance Date, while a Lump Sum Election is in effect, and prior to receipt of the lump sum payment, the lump sum benefit shall be payable to the Executive's estate and no Supplemental Spouse's Retirement Benefit shall be payable to the surviving Spouse, if any. (d) If the Executive dies after payment of a lump sum pursuant to Section 2.5, no Supplemental Spouse's Retirement Benefit shall be payable to the Executive's surviving Spouse, if any. (e) No benefit shall be payable following the Executive's death except as provided in this Section 2.3. 2.4 Spouse's Age. If a Spouse who is entitled to a benefit under this Article 2 is more than ten (10) years younger than the Executive, any benefit payable to the Spouse under this Section 2.3(a) (but not 2.3(b)) shall be reduced by 1/20 for each full year of age difference more than ten (10). 2.5 Payment Elections. (a) By checking the appropriate box on the signature page of this Agreement, the Executive may elect to receive, in lieu of the Supplemental Retirement Benefit to which he will otherwise become entitled under Section 2.2 hereof, a lump sum payment that is the Present Value, as of the date payment is made, of such Supplemental Retirement Benefit. Such payment shall be made as promptly as practicable after the Executive's Severance Date and, in all events, within forty-five (45) days after such Severance Date. (b) By executing and filing with the Company a form substantially identical to Exhibit I hereof, or such other form as the Company may prescribe or approve, the Executive may revoke an election made pursuant to paragraph (a) above 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. 2.6 Leave of Absence. In the event the Executive is granted a leave of absence, his employment shall be deemed to continue and shall be treated as Service, during the period of such leave of absence unless specifically determined to the contrary by the Committee. ARTICLE 3 - - AMENDMENT OR TERMINATION OF AGREEMENT 3.1 Subject to Section 3.2 below, the Company reserves the right to terminate this Agreement at any time by action of its Board of Directors or the Committee, and the continuance of this Agreement is not guaranteed to the Executive. 3.2 No termination of this Agreement shall operate to reduce, cancel or void the Company's obligation to pay benefits provided for under this Agreement and accrued prior to the Severance Date. 3.3 This Agreement may be amended by written instrument executed by the Executive and by an officer of the Company thereunto duly authorized by the Board of Directors of the Company. ARTICLE 4 - - MISCELLANEOUS 4.1 This Agreement shall under no circumstances be deemed to have any effect upon the terms or conditions of employment of the Executive. The establishment and maintenance of this Agreement shall not be construed as creating or modifying any contract between an Employer and the Executive nor is it in lieu of any other benefits. This Agreement shall under no circumstances be deemed to constitute a contract of insurance. 4.2 This Agreement shall not give the Executive the right to be retained in the employ of an Employer or any right or interest hereunder other than as specifically provided herein. 4.3 Benefits under this Agreement shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by the Executive or the Spouse and any attempt to so transfer or encumber the benefits shall be null and void. Benefits under this Agreement shall not be subject to or liable for the debts, contracts, liabilities, engagements or torts of the Executive or of the Spouse nor may the same be subject to attachment or seizure by any creditor of the Executive or his spouse under any circumstances. 4.4 In the event of the Executive's Retirement, Disability or death, he or his Spouse, as the case may be, should notify the Committee promptly, and the Committee will then provide a Claimant's statement form for completion which should be returned to the Committee together with evidence of Disability or with an official death certificate, if applicable. In the event that any claim hereunder is denied, the Committee will provide adequate notice in writing to the Executive or Spouse, setting forth the specific reasons for such denial and, in addition, the Committee will afford a reasonable opportunity for a full and fair review of those reasons. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has hereunto set his hand and seal all as of the day and year first above written. ENERGEN CORPORATION By: Its: EXECUTIVE ELECTION I hereby elect to have my benefit paid as provided in Section 2.2 of this Agreement. Pursuant to Section 2.5 of this Agreement, I hereby elect to have my benefit paid in a lump sum. EXHIBIT I ELECTION PURSUANT TO RESTATED EXECUTIVE RETIREMENT SUPPLEMENT AGREEMENT I hereby revoke any and all elections heretofore made by me pursuant to the terms of that certain Restated Executive Retirement Supplement Agreement entered into by and between Energen Corporation and myself dated as of February 28, 1996, and elect to have my benefit paid as provided in Section 2.2 of such Agreement. paid in a lump sum pursuant to Section 2.5 of such Agreement. 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. EXECUTIVE Accepted by: ENERGEN CORPORATION By: Its: Date: EX-10 3 Exhibit 10(b) SEVERANCE COMPENSATION AGREEMENT THIS AGREEMENT ("Agreement") is made and entered into as of the day of , 199 , by and between ENERGEN CORPORATION, an Alabama corporation ("Energen"), and , ("Executive"). W I T N E S S E T H: WHEREAS, Executive is an effective and valuable employee of Energen and/or one or more of its subsidiaries; WHEREAS, Executive desires certain assurances with respect to any change in control of Energen; WHEREAS, Energen recognizes that the uncertainties involved in a potential or actual change in control of Energen could result in the distraction or departure of management personnel such as Executive to the detriment of Energen and its shareholders; and WHEREAS, Energen desires to lessen the personal and economic pressure which a potential or actual change in control may impose on Executive and thereby facilitate Executive's ability to bargain successfully for the best interests of Energen's shareholders in the event of such a change in control; NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, Energen and Executive hereby agree as follows: Section 1. Definitions. As used in this Agreement the following words and terms shall have the following meanings: (a) "Applicable Period" means the period commencing with the earliest date that a Change in Control occurs and ending on the last day of the thirty-sixth calendar month following the calendar month during which such Change in Control occurred. Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs, and if the Date of Termination with respect to Executive's employment with Energen occurs prior to the date on which the Change in Control occurs, and if it is reasonably demonstrated by Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect the Change in Control or (ii) otherwise arose in connection with or in anticipation of the Change in Control, then for all purposes of this Agreement the "Applicable Period" shall be deemed to have commenced on the date immediately preceding the Date of Termination. (b) "Cause". Termination of employment by Employer for "Cause" shall mean termination based on any of the following: (1) The willful and continued failure by the Executive to substantially perform Executive's duties with Employer (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; (2) The engaging by Executive in willful misconduct which is demonstrably injurious to Employer monetarily or otherwise; or (3) The conviction of Executive of a felony. (c) "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 June 1, 1996, 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 the date hereof whose election, or nomination for election by Energen's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors; (3) Consummation of a reorganization, merger or consolidation involving, 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) The occurrence of one transaction or a series of transactions, which has the effect of a divestiture by Energen of 25% or more of the combined voting power of Alabama Gas Corporation's outstanding voting securities; (5) The occurrence of any sale, lease or other transfer, in one transaction or a series of transactions of all or substantially all of the assets of Alabama Gas Corporation (other than to Energen or an entity controlled by Energen); or (6) 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. (d) "Code" means the Internal Revenue Code of 1986, as the same may be from time to time amended. (e) "Compensation" means an amount equal to the sum of (A) plus (B), where (A) is the Executive's annualized base salary in effect at the time of a Change in Control, and (B) is the highest annual bonus awarded Executive by Employer pursuant to the Energen Annual Incentive Compensation Plan (or any successor annual cash incentive plan) with respect to the three (3) fiscal years immediately preceding the fiscal year in which the Change in Control occurs. (f) "Date of Termination" means the date that a termination of Executive's employment with Employer is first effective. (g) "Disability" means the total and permanent disability which entitles Executive to a disability benefit under a disability program sponsored and/or maintained by Energen. (h) "Employer" means Energen and its Subsidiaries. (i) "Excess Parachute Payment" shall have the same meaning as the term "excess parachute payment" defined in Section 280G(b)(1) of the Code. (j) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (k) "Good Reason" means the occurrence during an Applicable Period of any of the following events without Executive's prior written consent: (1) The assignment to Executive by Employer of duties inconsistent with Executive's position, authority, duties, responsibilities and status with Employer immediately prior to a Change in Control, or a change in Executive's titles or offices as in effect immediately prior to a Change in Control, or any removal of Executive from or any failure to reelect Executive to any of such positions, if such assignment, change, or removal results in a diminution in Executive's position, authority, duties, responsibilities or status with Employer immediately prior to a Change in Control or any other action by Employer that results in such a diminution in Executive's position, authority, duties, responsibilities or status; (2) A reduction in Executive's aggregate rate of monthly base pay from the Employer; (3) The termination or material adverse modification of the Energen Annual Incentive Compensation Plan or the Energen Corporation 1996 Long-Range Performance Share Plan (or any other short or long-term incentive compensation plan in effect immediately prior to a Change in Control) without substitution of new short or long-term incentives providing comparable compensation opportunities for Executive. (4) A failure by Employer to use its best efforts to provide Executive with either the same fringe benefits (including retirement benefits and paid vacations) as were provided to Executive immediately prior to a Change in Control or a package of fringe benefits that, though one or more of such benefits may vary from those in effect immediately prior to the Change in Control, is substantially comparable in all material respects to the fringe benefits (taken as a whole) in effect prior to a Change in Control; (5) Executive's relocation by Employer to any place more than 25 miles from the location at which Executive performed the substantial portion of Executive's duties prior to a Change in Control, except for required travel by Executive on Employer's business to an extent substantially consistent with Executive's business travel obligations immediately prior to such Change in Control; (6) Any material breach by Energen of any provision of this Agreement or any other agreement between Energen and Executive which breach continues for a period of thirty days following delivery by Executive to Energen of written notice of such breach. (l) "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 prepare Energen's audited financial statements, or any other firm of certified public accountants mutually agreeable to Energen and Executive. (m) "Notice of Termination" has the meaning set forth in Section 2(a) of this Agreement. (n) ""Parachute Payment" shall have the same meaning as the term "parachute payment" defined in Section 280G(b)(2) of the Code. (o) "Qualified Termination" shall mean (1) during a Window Period, any termination (including Retirement) of Executive's employment, other than for Cause, death or Disability, and (2) during the Applicable Period but not during a Window Period, (i) any termination by Employer of Executive's employment other than for Cause, (ii) a termination of Executive's employment which Executive and Energen agree in writing will constitute a Qualified Termination for purposes of this Agreement, and (iii) a voluntary termination of Executive's employment by Executive for Good Reason. (p) "Reasonable Compensation" shall have the same meaning as provided for the term "reasonable compensation" in Section 280G(b)(4) of the Code. (q) "Retirement" means termination of Executive's employment (other than for Good Reason) by the Executive on or after Executive's having reached age 60. (r) "Subsidiary" means any corporation, the majority of the outstanding voting stock of which is owned directly or indirectly, by Energen. (s) "Window Period" shall mean the 30-day period immediately following the first anniversary of a Change in Control. Section 2. Notice of Termination. During any Applicable Period: (a) Any termination (other than for Retirement, death or Disability) of Executive's employment, whether by Employer or Executive, shall be communicated by the terminating party transmitting or sending the other party a written notice ("Notice of Termination") referencing this Agreement and, if such termination is for Cause or Good Reason, indicating in reasonable detail the facts and circumstances providing a basis for such termination. The failure of Executive or Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or Energen hereunder or preclude Executive or Energen from asserting or relying upon the omitted fact or circumstance in enforcing Executive's or Energen's rights hereunder. (b) Subject to (c) below, such termination of Executive's employment shall be effective upon delivery of a Notice of Termination or at such later date as may be specified in the Notice of Termination. (c) In the event that each party delivers a Notice of Termination, the Notice of Termination first delivered shall establish the effective date of such Notice of Termination. Section 3. Severance Payment. In the event of a Qualified Termination, then Executive shall, subject to the provisions of Sections 5 and 8 hereof, receive as severance pay an amount equal to his Compensation multiplied by a factor of [1.5 or 2 or 2.5]. Subject to Section 5 hereof, any severance payment to be made under this Section 3 shall be paid in one payment and in full on or prior to the thirtieth day following the Date of Termination. Section 4. Other Benefits. Subject to Sections 5 and 8 hereof, in the event of a Qualified Termination (other than Retirement), for a period of twenty-four months commencing with the Date of Termination, Executive and the Executive's family shall continue to be covered at the expense of Energen by the same or substantially equivalent hospital, medical, dental, vision, accident, disability and life insurance coverages as were provided to Executive and the Executive's family by Employer immediately prior to the Change in Control; provided, however, that if Executive becomes employed with another employer and is eligible to receive benefits of the type described above from such other employer, Energen's obligations under this Section 4 and the benefits described herein shall be secondary to those provided by such other employer. Section 5. Limitation on Benefits. (a) Basic Rule. Except as otherwise provided in paragraph (c) below, any benefits payable or to be provided to the Executive by Employer, whether pursuant to this Agreement or otherwise (including, without limitation, Awards under the Energen Corporation 1992 or 1996 Long-Range Performance Share Plans), which constitute Parachute Payments shall be modified or reduced as provided in paragraph (b) below to the extent necessary so that the benefits payable or to be provided to Executive under this Agreement that constitute Parachute Payments, as well as any payments or benefits provided outside of this Agreement that constitute Parachute Payments, shall not cause Employer to have paid an Excess Parachute Payment. All provisions of Section 280G of the Code, and the regulations (proposed, interim, or final) thereunder, shall be taken into account in computing such amount, including making appropriate adjustment to such calculation for amounts established to be Reasonable Compensation. (b) Reductions. In the event that the amount of any Parachute Payment otherwise payable to or for the benefit of the Executive must be modified or reduced to comply with paragraph (a) above, the Executive shall direct which Parachute Payments are to be modified or reduced; provided, however, that no increase in the amount of any payment or any change in the timing of payment shall be made without the consent of Energen. (c) Optimization. Prior to the first date any Parachute Payment is due to be made, Energen shall, at its own expense, cause the Independent Auditor to determine whether X exceeds Y, where (i) X is the total amount of Parachute Payments that would be made to the Executive, whether pursuant to this Agreement or otherwise, if the limitation provided for in paragraph (a) above were not applied, reduced by the total amount of applicable federal, state, and local income, payroll and excise taxes that would be payable by the Executive with respect to such Parachute Payments, and (ii) Y is the total amount of Parachute Payments that would be payable to the Executive, whether pursuant to this Agreement or otherwise, if the limitation provided for in paragraph (a) above were applied, reduced by the total amount of applicable federal, state and local income, payroll and excise taxes that would be payable by the Executive with respect to such Parachute Payments. If X exceeds Y, then the limitation provided for in paragraph (a) above shall not apply. For purposes of making the determination provided for in this paragraph (c), the Independent Auditor shall assume that all Parachute Payments to be made to the Executive will be subject to federal income tax at the maximum rate in effect at the time the determination is made unless the Executive provides the Independent Auditor with evidence satisfactory to the Independent Auditor that it is more probable than not that one or more Parachute Payments will be taxable at a lower rate, or lower rates, in which case the Independent Auditor shall assume that such Parachute Payments will be taxed at the lower rate or rates. (d) Subsequent Payments. As a result of various incentive or other plans, Executive may be entitled to receive various Parachute Payments over a period of several years. In such event, the Independent Auditor may need to update its Section 5(c) calculations one or more times. In the event that all or a portion of a Parachute Payment is not made due to the limitations of this Section 5, Energen shall not be relieved of liability for such amount but such Parachute Payment shall be deferred and included in calculations with respect to subsequent Parachute Payments. (e) Overpayments and Underpayments. As a result of uncertainty in the application of section 280G of the Code at the time of determinations by the Independent Auditor hereunder, uncertainties in the valuation of future payments, and deferrals pursuant to Section 5(d), it is possible that Parachute Payments will have been made by Energen which should not have been made (an "Overpayment") or that additional Parachute Payments which will not have been made by Energen could have been made (an "Underpayment"), consistent in each case with the other provisions of this Section 5. In the event that the Independent Auditor, based upon the assertion of a deficiency by the Internal Revenue Service against Energen or the Executive which the Independent Auditor believes has a high probability of success, determines that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Executive which the Executive shall repay to Energen, together with interest at the applicable federal rate provided for in section 7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by the Executive to Energen if and to the extent that such payment would not reduce the amount which is subject to taxation under section 4999 of the Code. In the event that the Independent Auditor determines that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by Energen to or for the benefit of the Executive, together with interest at the applicable federal rate provided for in section 7872(f)(2)(A) of the Code. Section 6. No Obligation To Seek Further Employment; No Effect on Other Benefits. (a) Executive shall not be required to seek other employment, nor (except as otherwise provided under Section 4 with respect to insurance coverages) shall the amount of any severance payment or other benefit to be made or provided under this Agreement be reduced by any compensation or benefit earned by Executive as the result of employment by another employer after the Date of Termination, or otherwise. (b) Subject to Section 5 hereof, any severance payment or benefit to be made or provided under this Agreement is in addition to all other benefits, if any, to which Executive may be entitled under other agreements, plans or programs of Energen. Section 7. Continuing Obligations of Executive. As a result of and in connection with Executive's employment by Employer, Executive is involved in a number of matters of strategic importance and value to Employer 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 Employee is privy to proprietary and confidential information of Employer including without limitation, financial information and projections, business plans and strategies, customer and vendor lists and information, and oil and gas properties and prospects. The Executive agrees as follows: (a) Consulting Services. For a period of three years following the Date of Termination, Executive agrees to fully assist and cooperate with Employer and its representatives (including outside auditors, counsel and consultants) with respect to any matters with which the Executive was involved during the course of employment with Employer, including being available upon reasonable notice for interviews, consultation, and litigation preparation. Except as otherwise agreed by Executive, Executive's obligation under this Section 7 (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 Employer but scheduled to accommodate Executive's reasonable scheduling requirements. Executive 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, the Executive shall not Compete, (as defined below ) or assist others in Competing with the Employer. For purposes of this Agreement, "Compete" means (i) solicit in competition with Alabama Gas Corporation ("Alagasco") any person or entity which was a customer of Alagasco at the Date of Termination, (ii) offer to acquire any local gas distribution system in the State of Alabama; or (iii) offer to acquire any coalbed methane interest in the State of Alabama. Employment by, or an investment of less than one percent of equity capital in, a person or entity which Competes with Employer does not constitute Competition by Executive so long as Executive does not directly participate in, assist or advise with respect to such Competition. (c) Confidentiality. Executive agrees that at all times following the Date of Termination, Executive will not, without the prior written consent of Energen, disclose to any person, firm or corporation any confidential information of Employer which is now known to Executive or which hereafter may become known to Executive as a result of Executive's employment or association with Employer, 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 Agreement. Section 8. Board Resignation. Energen shall have no obligation under Sections 3 and 4 hereof if Executive shall not, promptly after the Date of Termination and upon receiving a written request to do so, resign from each officer and/or director position which Executive then holds with Energen and any Subsidiary. Section 9. Payment of Professional Fees and Expenses. Energen agrees to pay promptly as incurred, to the full extent permitted by law, all legal, accounting and other professional fees and expenses which Executive may reasonably incur (i) as a result of any contest (regardless of the outcome thereof) by Energen, 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); plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; or (ii) as a result of any contest by a taxing authority of Executive's tax treatment of any amounts received under this or any other Employer agreement or plan to the extent such tax treatment is consistent with the determinations made by the Independent Auditor under Section 5. Section 10. Term. This Agreement shall terminate (except to the extent of any unpaid or unfulfilled obligation with respect to a prior termination of Executive's employment) on the first to occur of (i) any termination of Executive's employment with Employer which does not constitute a Qualified Termination or (ii) expiration of the Term. The initial "Term" of this Agreement shall be for a period of three years from the date hereof. On each anniversary of the date hereof, the Term shall automatically extend by one year unless at least thirty days prior to such an anniversary Energen notifies Executive that there will be no such extension, in which event the term shall continue until the later to occur of (i) two years from such anniversary or (ii) three years from the date of the most recent Change in Control, if any. Section 11. Binding Effect; Successors. (a) This Agreement shall be binding upon and inure to the benefit of Executive and Executive's personal representative and heirs, and Energen and its successors and assigns including any successor organization or organizations which shall succeed to substantially all of the business and property of Energen, whether by means of merger, consolidation, acquisition of assets or otherwise, including operation of law. (b) Without the prior consent of Energen, Executive may not assign the Agreement, except by will or the laws of descent and distribution. Section 12. Notice. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as follows: If to Energen or Employer: Energen Corporation 2101 Sixth Avenue North Birmingham, Alabama 35203 Attention: Chairman If to Executive: _________________________ _________________________ _________________________ or such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. Section 13. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Executive and Energen. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama. Section 14. Validity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. Section 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. Section 16. Amendment and Restatement of Prior Agreement. This agreement constitutes a complete amendment and restatement and fully supersedes that certain Severance Compensation Agreement between the parties dated , 19 . IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. ENERGEN CORPORATION By Its EXECUTIVE EX-27.1 4
UT This schedule contains summary financial information extracted from the Form 10Q for June 30,1996, and is qualified in its entirety by reference to such financial statements. 0000277595 ENERGEN CORPORATION 1,000 9-MOS SEP-30-1996 OCT-01-1995 Jun-30-1996 PER-BOOK 270,187 97,671 105,775 13,716 240 487,589 111 87,314 107,232 194,657 0 0 130,652 19,000 0 0 1,825 0 0 0 141,455 487,589 336,940 7,688 294,513 302,201 34,739 1,966 36,705 9,926 26,779 0 26,779 9,567 7,406 63,940 2.44 2.44
EX-27.2 5
UT This schedule contains summary financial information extracted from the Form 10Q for June 30,1996, and is qualified in its entirety by reference to such financial statements. 0000003146 ALABAMA GAS CORPORATION 1,000 9-MOS SEP-30-1996 OCT-01-1995 Jun-30-1996 PER-BOOK 270,187 398 83,213 7,652 0 361,450 20 34,484 100,095 134,599 0 0 100,000 0 0 0 0 0 0 0 126,851 361,450 312,553 12,177 271,343 283,520 29,033 290 29,323 7,311 22,012 0 22,012 9,555 5,605 48,754 0 0 Earnings per share is calculated for Energen Corporation (parent company of Alagasco) and is not calculated for Alagasco separately as amount would not be meaningful.
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