8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report December 12, 2012

Commission File Number	Registrant	State of Incorporation	IRS Employer Identification Number
1-7810	Energen Corporation	Alabama	63-0757759
2-38960	Alabama Gas Corporation	Alabama	63-0022000
605 Richard Arrington Jr. Boulevard North Birmingham, Alabama			35203
(Address of principal executive offices)			(Zip Code)

(205) 326-2700

(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8–K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 23 0.425)

¨ Soliciting material pursuant to Rule 14a–12 under the Exchange Act (17 CFR 240.14a–12)

¨ Pre–commencement communications pursuant to Rule 14d–2(b) under the Exchange Act (17 CFR 240.14d–2(b))

¨ Pre–commencement communications pursuant to Rule 13e–4(c) under the Exchange Act (17 CFR 240.13e–4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(d) Election of New Director

On December 12, 2012, Energen Corporation (“Energen”) announced the election of Frances Powell Hawes to the Boards of Directors of Energen and Alabama Gas Corporation to serve for terms commencing January 1, 2013 and continuing until the next annual meetings of shareholders. The press release announcing the election is attached hereto as Exhibit 99.1. Beginning April 1, 2013, Ms. Powell Hawes will serve on the Audit Committee and the Finance Committee.

(e) Amendments to Compensatory Plan, Contract or Arrangement

On December 12, 2012, the Board of Directors of Energen approved amendments to the Energen Corporation Annual Incentive Compensation Plan (the “AICP”). The changes to the AICP include (i) adding definitions of “Cause” and “Change in Control” consistent with the definitions of such terms as used in the Energen Corporation Stock Incentive Plan and the Severance Compensation Agreements, each as described below, (ii) expanding the termination of employment language to provide for the payment of a target bonus if an executive is terminated following a Change in Control, and (iii) revising the performance objectives criteria to provide a more detailed list of performance objectives for use by the Officers Review Committee. The AICP, as amended, will be submitted for shareholder approval at the 2013 Annual Meeting for purposes of meeting the Internal Revenue Code Section 162(m) exemption for performance-based compensation. This summary of the amendments to the AICP is qualified in its entirety by reference to the full text of the AICP as amended, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

On December 12, 2012, the Board of Directors of Energen also approved amendments to the Energen Corporation Stock Incentive Plan (the “Stock Incentive Plan”) to incorporate certain clarifying and administrative changes. The changes to the Stock Incentive Plan include (i) providing for vesting of awards only in the event of retirement, death, disability or Change in Control, instead of upon any involuntary termination other than for cause, (ii) in the event of a termination upon retirement, death or disability, providing that vesting of performance share awards shall be limited to a pro rata portion based on the number of months of service during the applicable award period with payout at the end of such award period based on actual performance, and (iii) revising the “Change in Control” definition to increase the business combination trigger from 25% to 30%, and to remove the ability of the Board of Directors to specify a transaction or series of transactions as a Change in Control event by resolution, and, in the case of a Change in Control termination, providing for the vesting of performance shares and payment for such performance shares within thirty (30) days of termination based on target performance. This summary of the amendments to the Stock Incentive Plan is qualified in its entirety by reference to the full text of the Stock Incentive Plan as amended, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

On December 12, 2012, Energen Corporation approved amendments to its Severance Compensation Agreements (the “Severance Agreements”) with certain officers including each of Messrs. McManus, Porter, Richardson, Reynolds and Woodruff. The amendments to the Severance Agreements primarily incorporate certain clarifying and administrative changes. Additionally, the amendments revise the Change in Control definition to increase the business combination trigger from 25% to 30%, and to remove the ability of the Board of Directors to specify a transaction or series of transactions as a Change in Control event by resolution. Except as described herein, the Severance Agreements remain unchanged, and a fuller description of the terms of the Severance Agreements may be found in Energen Corporation’s proxy statement dated March 28, 2012, as filed with the Securities and Exchange Commission on March 23, 2012. A copy of the form of Severance Compensation Agreement, as revised, is attached hereto as Exhibit 10.3 and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

EXHIBIT NUMBER	DESCRIPTION
10.1	Energen Corporation Annual Incentive Compensation Plan as amended effective January 1, 2013.
10.2	Energen Corporation Stock Incentive Plan as amended effective December 1, 2012.
10.3	Form of Amended Severance Compensation Agreement.
99.1	Press Release dated December 12, 2012.

SIGNATURES

Pursuant to the requirements of the Securities 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
December 13, 2012	By	/s/ Charles W. Porter, Jr.
		Charles W. Porter, Jr.
		Vice President, Chief Financial Officer and
		Treasurer of Energen Corporation and Alabama
		Gas Corporation

EX-10.1

Exhibit 10.1

ENERGEN CORPORATION

ANNUAL INCENTIVE COMPENSATION PLAN

(As Amended Effective January 1, 2013)

1. PURPOSE.

The purposes of the Plan are to enable the Company and its subsidiaries to attract, retain, motivate and reward qualified executive officers and key employees by providing them with the opportunity to earn incentive compensation linked to the Company’s performance. The Plan contains provisions intended to allow such incentives to be structured in a manner that qualifies for the performance-based exception to Section 162(m) of the Internal Revenue Code.

2. DEFINITIONS.

Unless the context requires otherwise, the following words as used in the Plan shall have the meanings ascribed to each below, it being understood that masculine, feminine and neuter pronouns are used interchangeably and that each comprehends the others.

(a) “Board” shall mean the Board of Directors of the Company.

(b) “Cause” Termination of employment for “Cause” shall mean termination based on any of the following:

(1) The willful and continued failure by the Participant to substantially perform the Participant’s duties (other than any such failure resulting from the 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 the Participant has not substantially performed the Participant’s duties;

(2) The engaging by the Participant in willful misconduct which is demonstrably injurious to the Company monetarily or otherwise; or

(3) The conviction of the Participant 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 30% or more of

either (i) the then outstanding shares of common stock of the Company (the “Outstanding Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company 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 the Company or any corporation controlled by the Company shall not constitute a Change in Control;

(2) Individuals who, as of January 1, 2013, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of the Company (the “Board of Directors”); provided, however that any individual becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;

(3) Consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets, of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’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 the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of,

2

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; and

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

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

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

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

(d) “Committee” shall mean the Officers Review Committee of the Board (or such other committee of the Board that the Board shall designate from time to time) or any subcommittee thereof comprised of two or more directors each of whom is an “outside director” within the meaning of Section 162(m).

3

(e) “Company” shall mean Energen Corporation.

(f) “Covered Employee” shall mean (i) the Company’s Chief Executive Officer and (ii), subject to change from time to time at the discretion of the Committee, the Company’s Chief Financial Officer, the Company’s General Counsel, the Chief Operating Officer of Alabama Gas Corporation, and the Chief Operating Officer of Energen Resources Corporation.

(g) “Participant” shall mean those executive officers and key employees of the Company or a Subsidiary designated by the Committee as participants under the Plan.

(h) “Performance-Based Exception” means the performance-based exception from the tax deductibility limitations of Section 162(m).

(i) “Plan” shall mean the Energen Corporation Annual Incentive Compensation Plan, as set forth herein and as it may be amended from time to time.

(j) “Plan Year” shall mean the fiscal year of the Company or such other period as may be determined by the Committee.

(k) “Section 162(m)” shall mean Section 162(m) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

(l) “Subsidiary” shall mean and include any corporation other than the Company which is included in the affiliated group of the Company, as such term is defined in Section 1504 of the Code, without regard to Section 1504(b

3. ADMINISTRATION.

The Committee shall administer and interpret the Plan. Any determination made by the Committee under the Plan shall be final and conclusive. The Committee may employ such legal counsel, consultants and agents (including counsel or agents who are employees of the Company or a Subsidiary) as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant or agent and any computation received from such consultant or agent. All expenses incurred in the administration of the Plan, including, without limitation, for the engagement of any counsel, consultant or agent, shall be paid by the Company. No member or former member of the Board or the Committee shall be liable for any act, omission, interpretation, construction or determination made in connection with the Plan other than as a result of such individual’s willful misconduct.

4

4. TERMS AND CONDITIONS OF INCENTIVES.

4.1 ESTABLISHMENT OF PERFORMANCE OBJECTIVES AND INCENTIVE OPPORTUNITY. Within 90 days of the commencement of each Plan Year (or such later time as may be permitted for performance-based compensation under Section 162(m)), the Committee shall establish written performance objectives and a cash incentive opportunity for each Participant chosen to receive an incentive for such Plan Year. At the time of setting the performance objectives, the Committee shall specify the formula to be used in calculating each of the criteria on which an incentive is based and their relative weights. The incentive opportunity shall be expressed as an amount of cash or percentage of salary. The Committee may also specify a minimum acceptable level of achievement of the relevant performance objectives, as well as one or more additional levels of achievement, and a formula to determine the percentage of the incentive opportunity earned by the employee upon attainment of each such level of achievement. The performance objectives and incentive opportunity relating to any particular incentive need not be the same as those relating to any other incentive, whether made at the same or a different time. The Committee may delegate to the Chief Executive Officer of the Company the establishment and measurement of such performance objectives for Participants who are not Covered Employees.

4.2 PERFORMANCE OBJECTIVES CRITERIA.

(a) Criteria. The performance objectives for Participants who are Covered Employees shall be specific, measurable goals set by the Committee, may include multiple objectives and may be based on one or more operational or financial criteria. In setting the performance objectives, the Committee shall select from one or more of the following criteria (the “Section 162(m) Criteria”) in either absolute or relative terms, for the Company or any subsidiary business unit:

(1) total shareholder return;

(2) return on assets, return on equity or return on capital employed;

(3) measures of profitability such as earnings per share, corporate or business unit net income, net income before extraordinary or one-time items, earnings before interest and taxes, earnings before interests, taxes, depreciation and amortization, or earnings before interest, depreciation, amortization, taxes and exploration expense;

(4) cash flow measures;

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

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

5

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

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

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

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

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

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

(13) Measures of distribution system throughput, customer count, use per customer and burner tip count; and capital expenditure.

(14) measures of customer satisfaction and customer service; and

(15) measures of safety.

(b) Adjustments. When provided for by the Committee at the time the performance objectives are established, the performance objectives may be adjusted to exclude the effect of any of one or more of the following events that occur during the Performance Period:

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

(2) litigation, claims, judgments or settlements;

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

(4) accruals for reorganization and restructuring programs;

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

6

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

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

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

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

(c) Per Share Adjustments. Performance objectives set on a per share basis such as earnings or cash flow per share shall be appropriately adjusted to reflect changes in outstanding shares resulting from stock dividends, splits or combinations or mergers, reorganizations or similar transactions.

(d) Non-Covered Employees. The performance objectives for Participants who are not Covered Employees may be based on Section 162(m) Criteria or on criteria different from or supplemental to the Section 162(m) Criteria.

4.3 EARNING OF INCENTIVE, INDIVIDUAL MAXIMUM. Promptly after the date on which the necessary information for a particular Plan Year becomes available, the Committee shall determine the extent to which the incentive opportunity for such Plan Year has been earned through the achievement of the relevant performance objectives by each Participant who was granted an incentive for such Plan Year. At its discretion, the Committee may reduce a Participant’s earned incentive by up to 25%. The Committee shall certify in writing the earned incentives adjusted for any discretionary reductions. Notwithstanding the terms of any incentive, the maximum incentive under this Plan to any individual for any one Plan Year shall not exceed $2.5 million.

4.4 PAYMENT OF INCENTIVES. Promptly after the Committee has certified in writing that an incentive has been earned and any discretionary reductions, such incentives shall be paid in cash in a lump sum, provided, that any amounts, the payment of which has been deferred under the Energen Corporation 1997 Deferred Compensation Plan or any successor plan, shall be credited to the Participant’s account in accordance with the terms of that plan.

4.5 TERMINATION OF EMPLOYMENT – COMPLETED PLAN YEAR. If Participant’s employment is terminated for any reason (including death, disability or retirement) other than Cause after the end of a Plan Year but before payment of incentives for such Plan Year, the Participant shall remain entitled to payment of incentives, if any, earned for such Plan Year. A Participant whose employment is terminated for Cause after the end of a Plan Year but before payment of incentives for such Plan Year shall not receive payment of any incentive for the completed Plan Year.

7

4.6 TERMINATION OF EMPLOYMENT – PARTIAL PLAN YEAR – NO CHANGE IN CONTROL. If prior to the last day of a Plan Year during which a Change in Control does not occur (a “Routine Plan Year”), a Participant’s employment terminates as a result of the Participant’s death, disability, or retirement under the terms of any retirement plan maintained by the Company or a Subsidiary, such Participant shall receive an incentive equal to the amount that the Participant would have received as an incentive if such Participant had remained an employee through the end of the Plan Year multiplied by a fraction, the numerator of which is the number of days that elapsed during the Plan Year in which the termination occurs prior to and including the date of the Participant’s termination of employment and the denominator of which is the number of days in the full Plan Year (a “pro rata incentive”). If a Participant’s employment terminates for any other reason during a Routine Plan Year, then no incentive shall be payable to the Participant for such Plan Year, provided, that at its discretion, the Committee may determine to pay such Participant (other than a Participant terminated for cause) up to a pro rata incentive.

4.7 TERMINATION OF EMPLOYMENT – PARTIAL PLAN YEAR – WITH CHANGE IN CONTROL. If prior to the last day of a Plan Year during which a Change in Control occurs (a “Change in Control Plan Year”),

(i) a Participant’s employment terminates as a result of the Participant’s death, disability, or retirement under the terms of any retirement plan maintained by the Company or a Subsidiary, or

(ii) after the occurrence of the Change in Control, the Participant’s employment is otherwise involuntarily terminated other than for Cause, including a termination for good reason entitling the Participant to severance compensation under a written change in control severance compensation agreement between the Company or a Subsidary and the Participant;

such Participant shall receive an incentive equal to the Participant’s target incentive for the Plan Year multiplied by a fraction, the numerator of which is the number of days that elapsed during the Plan Year in which the termination occurs prior to and including the date of the Participant’s termination of employment and the denominator of which is the number of days in the full Plan Year (a “pro rata incentive”). If a Participant’s employment terminates for any other reason during a Change in Control Plan Year, then no incentive shall be payable to the Participant for such Plan Year, provided, that at its discretion, the Committee may determine to pay such Participant (other than a Participant terminated for cause) up to a pro rata incentive.

8

5. GENERAL PROVISIONS.

5.1 EFFECTIVENESS OF THE PLAN. Subject to the approval by the holders of the Common Stock at the 2002 Annual Meeting of Stockholders, the Plan shall be effective with respect to Plan Years beginning on or after January 1, 2002.

5.2 AMENDMENT AND TERMINATION. The Board or the Committee may at any time amend, suspend, discontinue or terminate the Plan; provided, however, that no such amendment, suspension, discontinuance or termination shall adversely affect the rights of any Participant in respect of any Plan Year which has already commenced and no such action shall be effective without approval by the stockholders of the Company to the extent necessary to continue to qualify the amounts payable hereunder to Covered Employees as performance-based compensation under Section 162(m).

5.3 NO RIGHT OF CONTINUED EMPLOYMENT. Nothing in this Plan shall be construed as conferring upon any Participant any right to continue in the employment of the Company or any of its subsidiaries.

5.4 NO LIMITATION TO CORPORATION ACTION. Nothing in this Plan shall preclude the Committee or the Board, as each or either shall deem necessary or appropriate, from authorizing the payment of compensation outside the parameters of the Plan, including, without limitation, base salaries, incentives under any other plan of the Company and/or its Subsidiaries (whether or not approved by stockholders), any other incentives (whether or not based on the attainment of performance objectives) and retention or other special payments.

5.5 NONALIENATION OF BENEFITS. Except as expressly provided herein, no Participant shall have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under the Plan except by will or the laws of descent and distribution.

5.6 WITHHOLDING. Any amount payable to a Participant under this Plan shall be subject to any applicable Federal, state and local income and employment taxes and any other amounts that the Company or a Subsidiary is required at law to deduct and withhold from such payment.

5.7 SEVERABILITY. If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not contained in the Plan.

5.8 GOVERNING LAW. The Plan shall be construed in accordance with and governed by the laws of the State of Alabama, without reference to the principles of conflict of laws.

5.9 HEADINGS. Headings are inserted in this Plan for convenience of reference only and are to be ignored in a construction of the provisions of the Plan.

9

EX-10.2

Exhibit 10.2

ENERGEN CORPORATION

STOCK INCENTIVE PLAN

(As Amended and Restated Effective December 1, 2012)

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

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

(a) “Adjusted Option Expiration Date” means:

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

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

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

(4) in the event of a termination of employment not described in the foregoing

clauses, the ninetieth day following termination.

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

(c) “Award Period” means the 3-year period (Energen fiscal years) commencing with the first day of the fiscal year in which the applicable Performance Share Award is granted, except as otherwise determined by the Committee at the time of grant and subject to the other provisions of this Plan.

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

(e) “Cause” means any of the following:

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

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

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

(f) “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 30% or more of either (i) the then outstanding shares of common stock of Energen (the “Outstanding Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of Energen entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); provided, however, that for purposes of this subsection (1) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Energen or any corporation controlled by Energen shall not constitute a Change in Control;

(2) Individuals who, as of December 1, 2012, constitute the Board of Directors of Energen (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of Energen (the “Board of Directors”); provided, however that any individual becoming a director subsequent to such date whose election, or nomination for election by Energen’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;

(3) Consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets, of Energen (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Energen or all or substantially all of Energen’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Energen or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination;

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

2

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

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

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

(g) “Change in Control Termination” means termination of a Participant’s employment under either of the following circumstances:

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

(2) a voluntary termination for good reason entitling the Participant to severance compensation under a written change in control severance compensation agreement between Energen and the Participant.

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

(i) “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.

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

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

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

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

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

3

(o) “Fair Market Value” means, with respect to a share of Stock, the closing price of the Stock on the New York Stock Exchange (or such other exchange or system on which the Stock then trades or is quoted) or, if there is no trading of the Stock on the relevant date, then the closing price on the most recent trading date preceding the relevant date. With respect to other consideration, the term Fair Market Value means fair market value as may be reasonably determined by the Committee; provided that any valuation subject to Code Section 409A shall be made in accordance with Code Section 409A and the regulations thereunder.

(p) “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.

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

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

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

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

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

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

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

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

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

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

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

(y) “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.

4

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

(aa) “Ten Percent Shareholder” means an individual who, at the time of grant, owns stock possessing more than ten (10) percent of the total combined voting power of all classes of stock of Energen.

2. Share Limitations.

2.1 Shares Subject to the Plan. Subject to adjustment in accordance with Section 3, as of April 27, 2011, 3,794,326 shares of Stock were reserved and available for issuance under the Plan for future Awards. (reflecting the original 650,000-share authorization, the 1998 stock split adjustment, an additional 1,500,000 shares authorized at the January 2002 shareholder meeting, the 2005 stock split adjustment and 3,000,000 shares authorized at the April 2011 shareholder meeting; reduced by prior Awards). Shares of Stock allocable to an Award or portion of an Award that is canceled by forfeiture, expiration or for any other reason (excepting pursuant to a stock appreciation right election under Section 6.2(i)) shall again be available for additional Awards. If any option granted under the Plan shall be canceled as to any shares of Stock pursuant to Section 6.2(i) (stock appreciation rights), then such shares of Stock shall not be available for the grant of another Award. Shares of Stock not issued as the result of the net exercise of a stock appreciation right, shares tendered by the Participant or retained by Energen as full or partial payment to Energen for the purchase of an Award or to satisfy tax withholding obligations in connection with an Award, or shares repurchased on the open market with the proceeds from the payment of an exercise price of an option shall not again be available for issuance under the Plan.

2.2 Limitations. Subject to adjustment in accordance with Section 3, (i) the maximum aggregate number of shares of Stock represented by all Awards granted to any one Participant during any one Energen fiscal year shall not exceed 400,000 calculated assuming maximum payout of the Awards and with each Performance Share representing one share of Stock; (ii) the maximum number of shares of Stock represented by all Restricted Stock and Performance Share Awards granted on or after April 27, 2011, shall not exceed 1,500,000; and (iii) the maximum number of shares of stock represented by Incentive Stock Options granted on or after April 27, 2011 shall not exceed 3,794,326.

3. Adjustments in Event of Change in Common Stock. In the event of any change in the Stock by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or rights offering to purchase Stock at a price substantially below fair market value, or of any similar change affecting the Stock, the number and kind of shares which thereafter may be available for issuance under the Plan, the terms of outstanding Awards shall be appropriately adjusted consistent with such change in such manner as 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.

5

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; provided, however, that (i) no Incentive Stock Option shall be granted after the expiration of ten years from the ISO Effective Date as defined in Section 14 and (ii) the aggregate Fair Market Value (determined as of the date the option is granted) of the Stock with respect to which Incentive Stock Options are exercisable for the first time by any employee during any calendar year (under all plans of Energen and its Subsidiaries) shall not exceed $100,000.

6.2 Terms and Conditions of Options. Each option granted under the Plan shall be evidenced by a written agreement. Such agreement shall be subject to the following express terms and conditions and to such other terms and conditions as the Committee may deem appropriate:

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

6

(b) Option Price, No Repricing. The option price per share shall be determined by the Committee at the time any option is granted, and shall be not less than (i) the Fair Market Value, or (ii) in the case of an Incentive Stock Option granted to a Ten Percent Shareholder, 110 percent of the Fair Market Value, (but in no event less than the par value) of one share of Stock on the date the option is granted, as determined by the Committee. Except as otherwise permitted by Section 3, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding options or stock appreciation rights or cancel outstanding options or stock appreciation rights in exchange for cash, other awards or options with an exercise price that is less than the exercise price of the original options or stock appreciation rights without shareholder approval.

(c) Exercise of Option. No part of any option may be exercised until the optionee shall have remained in the employ of Energen or of a Subsidiary for such period, if any, as the Committee may specify in the option agreement, and the option agreement may provide for exercisability in installments. The Committee shall have full authority to accelerate for any reason it deems appropriate the vesting schedule of all or any part of any option issued under the Plan. Each option shall be exercisable in whole or part on such date or dates and during such period and for such number of shares as shall be set forth in the applicable option agreement. An optionee electing to exercise an option shall give written notice to Energen of such election and of the number of shares the optionee has elected to purchase and shall at the time of exercise tender the full purchase price of the shares the optionee has elected to purchase plus any required withholding taxes in accordance with Sections 6.2(d) and 9.

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

(e) Exercise in the Event of Termination of Employment.

(1) Cause. If an optionee’s employment by Energen and all Subsidiaries shall

terminate for Cause, then all options held by the terminated Employee shall

immediately expire.

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

7

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

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

(5) Committee Authority. The foregoing provisions of this Section 6.2(e) notwithstanding, the Committee shall have full authority to accelerate the vesting schedule of all or any part of any option issued under the Plan and held by an employee who plans to terminate his or her employment, such that a terminated employee, his heirs or personal representatives may exercise (at such time or times on or prior to the applicable Expiration Dates as may be specified by the Committee) any part or all of any unvested option under the Plan held by such employee at the date of his or her termination of employment. Furthermore, the Committee may at the time of grant provide for different or supplemental terms and conditions with respect to termination of employment and any such terms and conditions expressly provided in the written option agreement shall be controlling with respect to that option.

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

(f) Nontransferability. Except as may otherwise be provided in this Section 6.2(f), no option granted under the Plan shall be transferable other than by will or by the laws of descent and distribution and, during the lifetime of the optionee, an option shall be exercisable only by the optionee. The foregoing notwithstanding, the optionee may transfer Nonqualified Stock Options to (i) the optionee’s spouse or natural, adopted or step-children or grandchildren (including the optionee, “Immediate Family Members”), (ii) a trust for the benefit of one or more of the Immediate Family Members, (iii) a family charitable trust established by one or more of the Immediate Family Members, or (iv) a partnership in which the only partners are (and, except as may be otherwise agreed by the Committee, will remain during the option period) one or more of the Immediate Family Members. Any options so transferred shall not be further transferable except in accordance with the terms of this Plan, shall remain subject to all terms and conditions of the Plan and the applicable option agreement, and may be exercised by the transferee only to the extent that the optionee would have been entitled to exercise the option had the option not been transferred.

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

8

(h) Incentive Stock Options. Each option agreement which provides for the grant of an Incentive Stock Option to a participant shall contain such terms and provisions as the Committee may determine to be necessary or desirable in order to qualify such option as an “incentive stock option” within the meaning of Section 422 of the Code, or any amendment thereof or substitute therefor. As provided in Section 6.1, no Incentive Stock Option shall be granted after the expiration of ten years from the ISO Effective Date as defined in Section 14. Energen, in its discretion, may retain possession of any certificates for Stock delivered in connection with the exercise of an Incentive Stock Option or appropriately legend such certificates during the period that a disposition of such Stock would disqualify the exercised option from treatment as an incentive stock option under Section 422 of the Code (a “422 Option”). Subject to the other provisions of the Plan, Energen shall cooperate with the optionee should the optionee desire to make a disqualifying disposition. Any Incentive Stock Option which is disqualified from treatment as a 422 Option for whatever reason, shall automatically become a Nonqualified Stock Option. No party has any obligation or responsibility to maintain an Incentive Stock Option’s status as a 422 Option. The optionee shall, however, immediately notify Energen of any disposition of Stock which would cause an Incentive Stock Option to be disqualified as a 422 Option.

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

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

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

7. Restricted Stock

7.1 Grant of Restricted Stock. The Committee may make grants of Restricted Stock to Participants. Each Restricted Stock Award shall be evidenced by a written agreement setting forth the number of shares of Restricted Stock granted and the terms and conditions to which the Restricted Stock is subject. Restricted Stock may be awarded by the Committee in its discretion with or without cash consideration.

9

7.2 Terms and Conditions of Restricted Stock.

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

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

(c) Termination of Employment. In the event of a Qualified Termination, then all restrictions on the Participant’s outstanding Restricted Stock with a grant date at least ten months prior to the date of termination shall immediately lapse and Restricted Stock with a grant date less than ten months prior to the date of termination shall be forfeited and returned to Energen. In the event of a Change in Control Termination, all restrictions on the Participant’s outstanding Restricted Stock shall immediately lapse. Should a Participant’s employment with Energen and all Subsidiaries terminate for any reason other than a Qualified Termination or a Change in Control Termination, any shares of the Participant’s Stock which remain subject to Restrictions, shall be forfeited and returned to Energen. The foregoing notwithstanding, the Committee may at the time of grant provide for different or supplemental terms and conditions with respect to termination of employment and any such terms and conditions expressly provided in the written Restricted Stock agreement shall be controlling with respect to that grant of Restricted Stock.

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

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

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

10

8. Performance Shares

8.1 Grant of Performance Shares

(a) The Committee may from time to time select employees to receive Performance Shares under the Plan. An Employee may be granted more than one Performance Share Award under the Plan.

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

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

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

8.2 Payment of Performance Share Awards

Each Participant granted a Performance Share Award shall be entitled to payment on account thereof as of the close of the applicable Award Period, but only if the Committee has determined that the conditions for payment of the Award set by the Committee have been satisfied. Payment of Awards shall be made by Energen promptly following the determination by the Committee that payment has been earned and by March 15 of the year following the year in which the Award is earned. Payment shall be made in the form of shares of Stock.

8.3 Termination of Employment

Except in the case of a Qualified Termination or a Change in Control Termination, if, prior to the close of the Award Period with respect to a Performance Share Award, a Participant’s employment with Energen and all Subsidiaries terminates, then any unpaid portion of such Participant’s Performance Share Award shall be forfeited.

In the case of a Qualified Termination, the Participant shall remain entitled to payout of any outstanding Performance Share Awards with a grant date at least ten months prior to the date of termination (subject to the reduction described below) at the end of the applicable Award Period in accordance with the terms of this Plan including without limitation applicable performance conditions. Each of such outstanding Performance Share Awards shall be reduced to equal the number of Performance Shares originally granted multiplied by a fraction the numerator of which is the number of months from the grant date to the termination date and the denominator of which is the number of months in the applicable Award Period.

11

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

8.4 Consulting, Non-Compete and Confidentiality

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

(a) Consulting Services. For a period of three years following the termination of the Participant’s employment (“Date of Termination”), Participant will fully assist and cooperate with Energen, the Subsidiaries and their representatives (including outside auditors, counsel and consultants) with respect to any matters with which the Participant was involved during the course of employment, including being available upon reasonable notice for interviews, consultation, and litigation preparation. Except as otherwise agreed by Participant, Participant’s obligation under this Section 8.4(a) shall not exceed 80 hours during the first year and 20 hours during each of the following two years. Such services shall be provided upon request of Energen and the Subsidiaries but scheduled to accommodate Participant’s reasonable scheduling requirements. Participant shall receive no additional fee for such services but shall be reimbursed all reasonable out-of-pocket expenses.

(b) Non-Compete. For a period of twelve months following the Date of Termination, unless otherwise expressly approved in writing by Energen, the Participant shall not Compete, (as defined below) or assist others in Competing with Energen and the Subsidiaries. For purposes of this Agreement, “Compete” means (i) solicit in competition with Alabama Gas Corporation (“Alagasco”) any person or entity which was a customer of Alagasco at the Date of Termination; (ii) offer to acquire any local gas distribution system in the State of Alabama; or (iii) offer to acquire any oil or gas mineral interest (A) within an oil or gas unit for which Energen Resources Corporation is the operator of record or (B) within an oil or gas unit contiguous to an oil or gas unit for which Energen Resources Corporation is the operator of record. Employment by, or an investment of less than one percent of equity capital in, a person or entity which Competes with Energen or the Subsidiaries does not constitute Competition by Participant so long as Participant does not directly participate in, assist or advise with respect to such Competition.

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

12

8.5 No Assignment of Interest

Except as provided in Section 6.2(f), the interest of any person in the Plan shall not be assignable, either by voluntary assignment or by operation of law, and any assignment of such interest, whether voluntary or by operation of law, shall render the Award void. Amounts payable under the Plan shall be transferable only by will or by the laws of descent and distribution.

9. Withholding. Each Participant shall, no later than the date as of which the value of an Award first becomes includable in the gross income of the Participant for Federal, state or local income tax purposes, pay to Energen and Subsidiaries, or make arrangements satisfactory to the Committee, in its sole discretion, regarding payment of any Federal, state, or local taxes of any kind required by law to be withheld with respect to the Award together with any Federal (including FICA and FUTA), state, or local employment taxes required to be withheld. The obligations of Energen 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, state and local tax withholding obligations with respect to all Awards by the reduction, in an amount necessary to pay all said withholding tax obligations, of the number of shares of Stock or amount of cash otherwise issuable or payable to said Participants in respect of an Award.

10. Performance Measures. At its discretion, the Committee may make the Awards subject to the attainment of one or more Performance Measures designed to qualify for the performance-based exceptions from Section 162(m) of the Code. Unless and until Energen’s shareholders approve a change in the Performance Measures set forth in this Section 10, the Performance Measures to be used for purposes of such Awards shall be chosen from among the following alternatives, as measured with respect to Energen and/or any one or more of the Subsidiaries, with or without comparison to a peer group:

(a) return on shareholder’s equity;

(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.

13

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

11. No Rights to Continued Employment. The Plan and any Award granted under the Plan shall not confer upon any Participant any right with respect to continuance of employment by Energen or any Subsidiary or any right to further Awards under the Plan, nor shall they interfere in any way with the right of Energen or any Subsidiary by which a Participant is employed to terminate the Participant’s employment at any time.

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

13. Amendment and Discontinuance. The Board may from time to time amend, suspend or discontinue the Plan. Subject to Section 17, 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.

14. Effective Date of the Plan. The original effective date of the Plan was November 25, 1997, the date of its adoption by the Board, subject to approval by the shareholders of Energen holding not less than a majority of the shares present and voting at its January 1998 Annual Meeting. From time to time the Board has made amendments to the Plan that require shareholder approval for effectiveness and the shareholders of Energen have approved such amendments, each of which is deemed to be a re-adoption by the Board and re-approval by the shareholders of the Plan for the purposes of Code Section 422(b)(2). The “ISO Effective Date” is the earlier of the dates of such re-adoption and re-approval of the most recent shareholder approved Plan amendment or restatement.

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

16. 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.

14

17. Effect of Code Section 409A. Payments and benefits under this Plan are intended to be exempt from the requirements under Code section 409A (“Code Section 409A”) and all provisions of the Plan shall be interpreted in accordance with the applicable exemptions. To the extent any payment or benefit is subject to Code Section 409A, the Plan shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof. Notwithstanding any provision of the Plan to the contrary, in the event that Energen determines that any payments or benefits may or do not comply with Code Section 409A, Energen may amend the Plan (without Participant consent) or take any other actions that Energen determines are necessary or appropriate to (i) exempt the payments or benefits hereunder from the application of Code Section 409A or preserve the intended tax treatment of the payments and benefits provided hereunder, or (ii) comply with the requirements of Code Section 409A. Without limiting the generality of the foregoing, if and to the extent that any payment or benefit under this Plan is determined by Energen to constitute “nonqualified deferred compensation” subject to Code Section 409A, this Plan shall be administered accordingly, and any such payment provided to an employee who is a “specified employee” (within the meaning of Code Section 409A and as determined pursuant to procedures established by Energen) must be delayed for six months from the date of employment termination to comply with section 409A(a)(2)(B)(i) of the Code. Energen shall set aside those payments or benefits that would have been made but for payment delay required by the preceding sentence, and such amounts will be paid at the end of the delay.

15

EX-10.3

Exhibit 10.3

SEVERANCE COMPENSATION AGREEMENT

THIS AGREEMENT (“Agreement”) is made and entered into as of the date set forth below, by and between ENERGEN CORPORATION, an Alabama corporation (“Energen”), and the Executive identified below (“the Executive”).

Date:                     ,            

Executive:                         

Factor: [100,150, 200, 300]% (see Section 3)

Base Period [ 12, 18, 24, 36] months commencing on the date of a Change in Control (See Section 1(a))

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:

1

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 occurrence of a Change in Control and ending on the last day of the “Base Period” specified at the beginning of this Agreement.

(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 30% or more of either (i) the then outstanding shares of common stock of Energen (the “Outstanding Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of Energen entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); provided, however, that for purposes of this subsection (1) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Energen or any corporation controlled by Energen shall not constitute a Change in Control;

(2) Individuals who, as of January 1, 2007, constitute the Board of Directors of Energen (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of Energen (the “Board of Directors”); provided, however that any individual becoming a director subsequent to such date whose election, or nomination for election by Energen’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;

2

(3) Consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets, of Energen (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Energen or all or substantially all of Energen’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Energen or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination; and

(4) [Reserved]

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

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

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

3

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

(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 immediately prior to the Measurement Event, 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 Measurement Event occurs. Compensation shall be calculated without reduction for any amounts deferred by the Executive pursuant to the Energen Corporation 1997 Deferred Compensation Plan.

(f) “Date of Termination” means the first date on which Executive is no longer employed by any Employer.

(g) [Reserved]

(h) “Employer” means, severally and collectively as applicable, any one or more of the following entities: (i) Energen, (ii) Energen’s Subsidiaries, (iii) any party to a Change in Control and (iv) any entity controlled by or under common control with a party to a Change in Control.

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

(j) “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 authority, duties, and responsibilities with Energen and its Subsidiaries immediately prior to the Measurement Event, or a change in Executive’s titles or offices as in effect immediately prior to the Measurement Event, or any removal of Executive from or any failure to reelect or elect Executive to any of such positions, or comparable positions with Employer, if such assignment, change, or removal results in a material diminution in Executive’s authority, duties, or responsibilities with Employer as compared to Executive’s position with Energen and its Subsidiaries prior to the Measurement Event or any other action by Employer that results in a material diminution in Executive’s authority, duties, or responsibilities,

4

(2) A material diminution in Executive’s base compensation from that in effect prior to the Measurement Event;

(3) A failure by Employer to provide short and long-term incentive opportunities comparable to opportunities available to Executive prior to the Measurement Event, which failure results in a material diminution in the overall compensation payable to the 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 prior to the Measurement Event or a package of fringe benefits that, though one or more of such benefits may vary from those in effect immediately prior to the Measurement Event, is substantially comparable in all material respects to the fringe benefits (taken as a whole) in effect prior to the Measurement Event, which failure results in a material diminution in the overall compensation payable to the Executive.

(5) Executive’s relocation by Employer to any place more than 50 miles from the location at which Executive performed the substantial portion of Executive’s duties prior to the Measurement Event, 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 Measurement Event;

(6) Any material breach by Energen of any provision of this Agreement or any other agreement between Energen and Executive.

(k) “Independent Auditor” means the firm of certified public accountants that 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 Executive.

(l) “Measurement Event” means the Change in Control.

(m) “Notice of Termination” has the meaning set forth in Section 2(a) of this Agreement.

(n) “Qualified Termination” means the occurrence during an Applicable Period of

(i) a termination by all Employers of Executive’s employment other than for Cause,

5

(ii) a termination of Executive’s employment with one or more Employers which Executive and Energen agree in writing will constitute a Qualified Termination for purposes of this Agreement, or

(iii) a voluntary termination of Executive’s employment by Executive for Good Reason.

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

Section 2. Notice of Cause or Good Reason Termination. During any Applicable Period:

(a) Any termination for Cause or Good Reason shall be communicated to the other party by written notice (“Notice of Termination”) referencing this Agreement and, indicating in reasonable detail the facts and circumstances providing a basis for such termination. For any termination for Good Reason: (i) the Executive must provide such Notice of Termination within 90 days of the initial existence of the fact or circumstance showing Good Reason; (2) the Employer shall have a period of at least 30 days during which it may remedy the condition; and (3) the Executive must terminate employment within six months of the initial existence of the fact or circumstance showing Good Reason. The failure of Executive or Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason 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 the requirements of Section 2(a), termination for Cause shall be effective upon delivery of a Notice of Termination and termination for Good Reason shall be effective upon delivery of a Notice of Termination or at such later date as may be specified in the 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 16 hereof, receive as severance pay an amount equal to the Executive’s Compensation multiplied by the “Factor” specified at the beginning of this Agreement. 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.

6

Section 4. Other Benefits. Subject to Sections 5 and 16 hereof, in the event of a Qualified Termination, 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 Measurement Event; 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 obligation to provide continued coverage under this Section 4 and the continued benefits described herein shall be secondary to those provided by such other employer. Except as may be otherwise agreed by the Executive, all such coverages shall be provided under insured plans.

To the extent any benefits provided under this Section 4 are taxable, such benefits are intended to remain exempt from the requirements of Code section 409A in accordance with the exemptions described in Treas. Reg. secs. 1.409A-1(a)(5) and (b)(9)(i)-(v). In the event any benefits provided under this Section 4 are not exempt from the requirements of Code section 409A, such benefits shall be subject to the limitations described in Section 16 of this Agreement.

THE FOLLOWING VERSION OF SECTION 5 APPLIES TO AGREEMENTS

ENTERED INTO AFTER 2007.

Section 5. Certain Payment Adjustments.

(a) In the event that the any portion of the payments and benefits provided to Executive herein or otherwise by the Employer (collectively “Covered Payments”) constitute “parachute payments” within the meaning of Code Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),and would, but for this provision, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the payments and benefits to the Executive payable under this Agreement shall be either:

(i) delivered in full; or

(ii) delivered to such lesser extent as would result in no portion of Covered Payments being subject to the Excise Tax;

whichever of the foregoing results in the receipt by Executive on an after-Excise Tax basis of the greatest amount, notwithstanding that all of some of the amounts may be taxable under Section 4999 of the Code. The reduction of the amounts or benefits payable hereunder, if applicable, shall be made by reducing first the benefits under Section 4, then the payments under Section 3. The determination of the required reduction, if any, shall be determined in the good faith judgment of the Independent Auditor or tax counsel selected by the Independent Auditor. The Employer at its expense shall cause the determination to be made as promptly as reasonably practical.

7

THE FOLLOWING VERSION OF SECTION 5 APPLIES TO AGREEMENTS

ENTERED INTO IN 2007 AND EARLIER.

Section 5. Certain Further Payments by the Company.

(a) Except as set forth below, in the event that any amount or benefit paid, distributed or accrued to or by the Executive pursuant to any provision of this Agreement, and/or any amounts or benefits otherwise paid, distributed or accrued to or by the Executive by the Employer or any affiliated company including, without limitation, any distribution, vesting or payment made pursuant to the terms of the Employer’s or an affiliated company’s compensation plans or arrangements (collectively, the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any similar tax that may hereafter be imposed, Energen shall pay to the Executive at the time specified in Section 5(d) below an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to Covered Payments, after deduction of any Excise Tax on Covered Payments and any Federal, state and local income or employment tax and Excise Tax on the Tax Reimbursement Payment provided for by this Section 5(a), but before deduction for any Federal, state or local income or employment tax withholding on Covered Payments, shall be equal to the amount of the Covered Payments. Notwithstanding the foregoing provisions of this Section 5(a), if it shall be determined that Executive is entitled to a Tax Reimbursement Payment, but that the Covered Payments would not be subject to the Excise Tax if the Covered Payments were reduced by an amount that is less than 10% of the portion of the Covered Payments that would be treated as “parachute payments” under Section 280G of the Code, then the amounts payable to Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the “Reduced Amount”“), and no Tax Reimbursement Payment shall be made to Executive. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the benefits under Section 4, then the payments under Section 3. For purposes of reducing the Payments to the Reduced Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Covered Payments to the Reduced Amount, no amounts payable under this Agreement shall be reduced pursuant to this provision.

(b) For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,

(i) such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company’s Independent Auditor or tax counsel selected by the Independent Auditor, Energen has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount”, or such “parachute payments” are otherwise not subject to such Excise Tax, and

8

(ii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Auditor in accordance with the principles of Section 280G of the Code.

(c) For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay:

(i) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and

(ii) any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year.

(d) The Tax Reimbursement Payment (or portion thereof) provided for in Section 5(a) above shall be paid to the Executive not later than ten business days following the payment of the Covered Payments (or, if earlier, the date described in subsection (g)); provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, Energen shall pay to the Executive by such date an amount estimated in good faith by the Independent Auditors to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 7872(f)(2)(A) of the Code) as soon as the amount thereof can be determined, but in no event later than 25 calendar days after payment of the related Covered Payment (or, if earlier, the date described in subsection (g)). In the event that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, such excess shall be repaid by Executive in accordance with Section 5(e) below.

(e) In the event that the Excise Tax is subsequently determined by the Independent Auditors or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, the Executive shall repay to Energen, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such Excise Tax had been applied in initially calculating such Tax Reimbursement Payment, plus interest on the amount of such repayment at the rate provided in Section 7872(f)(2)(A) of the Code. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be refunded to Energen has been paid or is payable to any Federal, state or local tax authority, repayment thereof shall not be required unless and until actual refund or credit of such portion has been made to the Executive, and interest payable to Energen shall not exceed interest received or credited to the Executive by such tax authority for the period it held such portion. The Executive and Energen shall mutually agree upon the course of action to be pursued in connection with a claim for refund or credit by Executive.

9

(f) In the event that the Excise Tax is later determined by the Independent Auditors or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), Energen shall, at that time (and subject to subsection (g)), make an additional payment to Executive in an amount equal to (i) such excess Excise Tax, plus (ii) any interest or penalty payable with respect to such excess Excise Tax plus (iii) any Federal, state and local income or employment tax and Excise Tax on all payments made under this Section 5(f), all such that Executive has no adverse economic consequences as a result of such excess Excise Tax determination.

(g) To the extent any payment required under Section 5(a) is subject to Code section 409A, payment shall be made no later than the end of the Executive’s taxable year next following the Executive’s taxable year in which the Executive remits the related taxes. In addition, a payment owed under Section 5(f) as a result of a tax audit or litigation addressing the existence or amount of a tax liability shall be made no later than the end of the Executive’s taxable year following the Executive’s taxable year in which the taxes that are the subject of the tax audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, the end of the Executive’s taxable year following the Executive’s taxable year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

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:

10

(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, unless otherwise expressly approved in writing by Employer, 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 Employer any person or entity which was a customer of Alabama Gas Corporation at the Date of Termination, (ii) offer to acquire any local gas distribution system in the State of Alabama; (iii) offer to acquire any oil or gas mineral interest in the State of Alabama, or (iv) offer employment to any active employee of Employer who was an employee of Energen Resources Corporation prior to the Measurement Event. 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. [RESERVED]

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 (“Professional Fees”) 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); 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 under Section 5

11

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. Energen will require any such successor to expressly assume and agree to perform Energen’s obligations under this Agreement.

(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

                         605 Richard Arrington Jr., Boulevard North

                         Birmingham, Alabama 35203

                         Attention: Chairman

If to Executive:                  The address for Executive in the Employer’s payroll records

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.

12

Section 13. Miscellaneous. Subject to Section 16, 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. Effect of Code Section 409A and other tax matters. Payments and benefits under this Agreement are intended to be exempt from the requirements under Code section 409A of the Code (“Code Section 409A”), and all provisions of the Agreement shall be interpreted in accordance with the applicable exemptions. To the extent any payment or benefit is subject to Code section 409A, the Agreement shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof.

Notwithstanding any provision of the Agreement to the contrary, in the event that Energen determines that any payments or benefits may or do not comply with Code Section 409A, Energen may amend this Agreement (without Executive consent) or take any other actions that Energen determines are necessary or appropriate to (i) exempt the payments of benefits hereunder from the application of Code Section 409A or preserve the intended tax treatment of the payment and benefits provided hereunder, or (ii) comply with the requirements of Code Section 409A.

Without limiting the generality of the foregoing, if and to the extent that any payment or benefit under this Agreement is determined by the Employer to constitute “nonqualified deferred compensation” subject to section 409A of the Code, this Agreement shall be administered accordingly, and any such payment provided to an employee who is a “specified employee” (within the meaning of section 409A of the Code and as determined pursuant to procedures established by the Employer) must be delayed for six months from the Date of Termination to comply with section 409A(a)(2)(B)(i) of the Code. The Employer shall set aside those payments or benefits that would have been made but for payment delay required by the preceding sentence, and such amounts will be paid at the end of the delay.

13

All reimbursements and in kind benefits provided under this Agreement, to the extent subject to the requirements of Code section 409A, shall be made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense shall be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit. The Executive’s right to a series of benefits or payments under the Agreement shall be treated as a right to a series of separate payments.

Section 17. 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

14

EX-99.1

Exhibit 99.1

For Immediate Release:	Contacts:     Julie S. Ryland
Wednesday, December 12, 2012	205.326.8421

Frances Powell Hawes to Join Energen Board of Directors

BIRMINGHAM, Alabama — Energen Corporation (NYSE: EGN) announced today that Frances Powell Hawes, chief financial officer of New Process Steel, LP, in Houston, Texas, will join the Board of Directors of Energen and its two operating subsidiaries effective January 1, 2013. She will stand for election at Energen’s Annual Meeting of Shareholders on April 24, 2013.

New Process Steel is a leader in flat rolled steel distribution, processing, and manufacturing, with operations in the United States and Mexico. Ms. Powell Hawes also serves on the Board of Express Energy Services, an oilfield services company specializing in drilling support, completion, production, and decommissioning.

Ms. Powell Hawes has served as CFO for numerous publicly traded companies, including NCI Building Systems, Inc. She also has served as a financial advisor to London Merchant Securities PLC, a real estate and investment company. Until 2001 she was CFO of Grant Prideco, a manufacturer of engineered tubular products for the energy industry. In 2000 she played a major role in Grant Prideco’s 100 percent public spin-off from Weatherford International, an oilfield services company. Prior to the spin-off, she was Chief Accounting officer for Weatherford.

“We are very fortunate to have Frances on the Energen team,” said James McManus, Energen’s chairman and chief executive officer. “She brings with her an extensive corporate financial background in the energy industry. Frances will be a tremendous asset and complement to our strong Board of Directors.”

Ms. Powell Hawes is a Certified Public Accountant and earned her bachelor’s degree at the University of Houston. A member of the National Association of Corporate Directors, she serves on the Board of the Houston Financial Executive Institute and the Steering Committee of the United Way of Greater Houston Women’s Initiative.

Energen Corporation is an oil and gas exploration and production company with headquarters in Birmingham, Alabama. Through Energen Resources Corporation, the company has approximately 950 million barrels of oil-equivalent proved, probable, and possible reserves. These all-domestic reserves are located mainly in the Permian and San Juan basins. For more information, go to http://www.energen.com.

-o0o-