Exhibit 10.2 Compensation Arrangements with named executive officers


    
      

    


    EXHIBIT
      10.2

    


    COMPENSATION
      ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS

    


    For
      2006, the Company’s named executive officers shall be paid salaries as follows:
      Mr. Corbett - $1,232,000; Mr. Hager - $745,000; Mr. Crouch - $670,000; Mr.
      Wohleber - $535,000; and Mr. Pilcher - $485,000. In addition, each officer
      is
      paid a stipend equal to 4% (net of taxes) of his annual salary to facilitate
      involvement in community activities.

    


    For
      2006, the target awards payable to the named executive officers under the
      Company’s Annual Incentive Compensation Plan (“AICP”)
      are as follows: Mr. Corbett - 125% of salary; Mr. Hager - 100% of salary; Mr.
      Crouch - 90% of salary; Mr. Wohleber - 90% of salary; and Mr. Pilcher - 90%
      of
      salary.
      The maximum award for each officer under the AICP for the 2006 performance
      year
      will be derived from four measurement criteria. Performance under the
      measurement criteria is determined by comparing actual results to budget.
      Depending on performance, an officer may be awarded up to 200% of his targeted
      award. The four measurement criteria are: (1) Operating Cash Flow Per
      Barrel of Oil Equivalent (weighted 40% of the AICP award); (2) Production
      Volume (weighted 20%); (3) Production Replacement Rate (weighted 20%);
      and
      (4) Unit Finding, Development and Acquisition Costs (weighted
      20%).

    


    The
      Executive Compensation Committee believes incentive or "at risk" compensation
      is
      a key ingredient in motivating executive performance to maximize stockholder
      value and align executive performance with Company objectives and stockholder
      interests. Awards of stock options, restricted stock and performance units
      granted in 2006 under the Long Term Incentive Plan for the named executive
      officers are as follows: Mr.
      Corbett - 116,350 stock options, 23,250 shares of restricted stock, and
      2,326,000 performance units; Mr. Hager - 47,900 stock options, 9,550 shares
      of
      restricted stock, and 957,000 performance units; Mr. Crouch - 26,900 stock
      options, 5,350 shares of restricted stock, and 538,000 performance units; Mr.
      Wohleber - 28,350 stock options, 5,650 shares of restricted stock, and 567,000
      performance units; and Mr. Pilcher - 18,100 stock options, 3,600 shares of
      restricted stock, and 362,000 performance units. Options have an exercise price
      of $94.095 (the fair market value on the date of the grant) and vest one-third
      each year on January 10, beginning in 2007. Restricted stock vests on January
      10, 2009. With respect to performance units, at the end of 2009, the Company’s
      total stockholder return (stockholder return assuming dividend reinvestment)
      will be compared to the total stockholder return of the Company’s peers during
      the same period, and final award payouts will be made based on the Company’s
      rank relative to its peers. Each unit is worth between $0.00 and $2.00,
      depending on performance, with payout targeted at $1.00 per unit.