Exhibit 10.1


Execution Copy


STOCKHOLDERS
AGREEMENT


This STOCKHOLDERS AGREEMENT (this “Agreement”) is made and entered into on
March 12, 2007, by and between Pogo Producing Company, a Delaware corporation
(the “Company”), and Third Point LLC, a
Delaware limited liability company (“Third Point”),
Mr. Daniel S. Loeb, Mr. Bradley L. Radoff, Third Point Offshore Fund, Ltd., a
Cayman Islands limited liability exempted company, Third Point Ultra Ltd., a
British Virgin Islands limited liability company, Third Point Partners LP, a
Delaware limited partnership, Third Point Partners Qualified LP, a Delaware
limited partnership and Lyxor/Third Point Fund Limited, a Jersey public company
with limited liability (each, including Third Point, a “Holder”
and, collectively, the “Holders”).


RECITALS


WHEREAS, certain Holders have filed with the
Commission a Schedule 13D and amendments thereto reporting, among other things,
their beneficial ownership of common stock and other securities of the Company
(as amended as of February 23, 2007, the “Third Point Schedule 13D”);


WHEREAS, in the Third Point Schedule 13D, the Holders
stated that they intend, at the Company’s 2007 annual meeting of stockholders
(the “2007 Annual Meeting”), to propose
nominees to be elected to seats on the Company’s board of directors (the “Board”) and certain amendments to the Bylaws (collectively,
the “Proposed Solicitation”);


WHEREAS, the Company and the Holders have each
determined that it is in their respective best interests and in the best
interests of their stockholders and/or investors to enter into this Agreement
whereby (i) the Company will expand the Board to add new members and (ii) the
Holders will abandon the Proposed Solicitation, in each case as more fully
provided herein;


NOW, THEREFORE, in consideration of the premises, the
mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:


ARTICLE I


DEFINITIONS


a)     Except as otherwise specifically indicated, the following terms
have the following meanings for all purposes of this Agreement:


“2008 Annual Meeting”
means the Company’s 2008 annual meeting of stockholders.


“Affiliate” has
the meaning assigned thereto in Rule 12b-2 promulgated under the Exchange Act.













“beneficially owns”
(or comparable variations thereof) has the meaning set forth in Rule 13d-3
promulgated under the Exchange Act.


“Board Designees”  means the Third Point Designees and the TRT Designee.


“Bylaws” means
the Amended and Restated Bylaws of the Company.


“Certificate of
Incorporation” means the Restated Certificate of Incorporation of
the Company.


“Confidential Information” means
all information, data, knowledge, documents, reports, interpretations, forecasts,
records, know-how (in whatever form and however communicated) and other written
or oral information and documents that are furnished to or otherwise disclosed
to or received by any of the Holders, any member of the Third Point Group or
their representatives, directly or indirectly from or on behalf of the Company,
whether furnished or otherwise disclosed or received before or after the date
of this Agreement, together with all analyses, compilations, studies,
memoranda, notes, evaluations or other documents, records or data (in whatever
form maintained) prepared or formed by any of the Holders, any member of the
Third Point Group or their representatives that contain or otherwise reflect or
are generated from, whether in whole or in part, such information or documents;
provided, however, that the term “Confidential
Information” does not include any information that, as demonstrated by the
Holders, (a) is or becomes generally available to and known by the public
(other than as a result of a disclosure directly or indirectly by any of the
Holders, any member of the Third Point Group or their representatives in breach
of this Agreement), (b) is or becomes available to any of the Holders, any
member of the Third Point Group or their representatives on a non-confidential
basis from a source other than the Company or a Person acting on behalf of the
Company, provided that such source is not and was not prohibited from
communicating the information by a contractual, legal, fiduciary or other
obligation known to any of the Holders, any member of the Third Point Group or
their representatives or (c) was in the possession of any of the Holders, any
member of the Third Point Group or their representatives prior to being
furnished or disclosed by or on behalf of the Company or was independently
developed by any such Persons without violation of this Agreement.


“Commission”
means the Securities and Exchange Commission.


“Equity Securities”
means Voting Securities and options and rights (whether presently exercisable
or not) to purchase Voting Securities.


“Exchange Act “
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.


“Holder Representative”
has the meaning given such term in Section 7.15.


“Governmental or Regulatory
Authority” means any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision, or any stock exchange or market in which Voting Securities are
listed for trading or traded.



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“Person” means
any individual, corporation, limited liability company, partnership, trust,
other entity or group (within the meaning of Section 13(d)(3) of the Exchange
Act).


“representatives”
of any Person means such Person’s directors, officers, employees, legal,
investment banking and financial advisors, accountants and any other agents and
representatives of such Person.


“Resignation Date”
means the earliest of:


(a) the first date on which any member of the Third
Point Group engages in any of the activities prohibited by Article IV, if such
violation is not wholly cured within three business days following written
notice thereof by the Company,


(b) the first date on which any member of the Third
Point Group sells, transfers or otherwise disposes of Equity Securities such
that the Third Point Group’s aggregate beneficial ownership of Equity
Securities is reduced to less than 5% (calculated in accordance with Rule
13d-3(d)(1)(i) promulgated under the Exchange Act),


(c) the first date after the Standstill Termination
Date on which any member of the Third Point Group engages in any activity that
was, prior to the Standstill Termination Date, prohibited by Section 4.01, and


(d) the date on which this Agreement is terminated.


“Standstill Termination Date”
means December 31, 2007.


“Strategic Advisor”
means Goldman, Sachs & Co., in its capacity as financial advisor to the
Company in connection with the Strategic Alternatives Process, together with
any successors to such firm in such capacity.


“Strategic
Alternatives Process” means the evaluation of strategic
alternatives by the Board publicly announced by press release on February 15,
2007 or any similar process.


“Third Point Designees”
means Daniel S. Loeb, Bradley L. Radoff and any subsequent designee elected to
the Board pursuant to Section 2.03.


“Third Point Group”
means (a) the Holders, (b) any and all Affiliates of any Holder and any Person
as to which beneficial ownership of Equity Securities, directly or indirectly,
is controlled or shared by a Holder, (c) the then-current officers, directors
or managing members (or Persons serving in equivalent capacities) of any Person
described in clauses (a) or (b) above, (d) with respect to any Person described
in clauses (a) or (b) above who is an individual, (i) any and all immediate
family members of such Person, (ii) the heirs, executors, personal
representatives and administrators of such Person, (iii) any and all trusts
established for the benefit of such Person and (iv) any and all charitable
foundations the investment decisions of which are controlled by such Person and
(e) the other members of any and all groups (within the meaning of Section
13(d)(3) of the Exchange Act) of which any Holder or any Person described above
is a member.



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“Termination Event”
means the first date on which a Third Point Designee is neither employed by nor
affiliated with any of the other Holders.


“TRT Designee”
means Robert B. Rowling.


“TRT Vacancy Proposal” means a
stockholder proposal for the 2008 Annual Meeting by any of the Holders to
expand the Board by one directorship (including a proposal to expand the Board
by one directorship in excess of the number proposed in any prior proposal made
in accordance with the Bylaws by any of the Holders to expand the size of the
Board) and nominate an individual to fill such directorship in order to replace
the directorship terminated as a result of the occurrence of events specified
in the second and third sentences of Section 2.05(b).


“Voting Securities”
means the common stock, par value $1.00 per share, of the Company and any other
securities of the Company of any kind or class having the power generally to
vote for the election of directors.


b)    Unless the context of this Agreement otherwise requires, (i)
words of any gender include the other gender; (ii) words using the singular or
plural number also include the plural or singular number, respectively; (iii)
the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to
this entire Agreement; (iv) the terms “Article” or “Section” refer to the
specified Article or Section of this Agreement; and (v) all references to
statutes, rules and regulations are to the enumerated statutes, rules and
regulations and any successor statute, rule or regulation. Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless business or trading days are specified.


ARTICLE
II


BOARD
MATTERS AND RELATED AGREEMENTS


Section 2.01.
Board Matters


a)     Promptly after the execution and delivery of this Agreement by
all parties (and in no event later than March 15, 2007), pursuant to the powers
granted to it under the Bylaws, the Board shall create two additional
directorships, thereby increasing the size of the Board from eight to ten
directorships, and appoint the Third Point Designees to fill such new
directorships.  Upon such appointment,
one of such designees (the “First TP Designee”)
shall be a member of the class of directors designated as Class I in the
Certificate of Incorporation, with a term expiring at the 2008 Annual Meeting,
and the other designee (the “Second TP Designee”)
shall be a member of the class of directors designated as Class III in the
Certificate of Incorporation, with a term expiring at the 2007 Annual
Meeting.  Each Third Point Designee
agrees to serve as a director of the Company, subject to and in accordance with
the provisions of this Agreement and the written policies of the Board, any
committees thereof or the Company applicable to Board members.  Each Third Point Designee acknowledges that
his obligations under this Agreement are in addition to the fiduciary and
common law duties of any director of a Delaware corporation.



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b)    On or at any time prior to the twentieth day after the 2007
Annual Meeting, pursuant to the powers granted to it under the Bylaws, the
Board shall be entitled to create a third additional directorship, thereby
increasing the size of the Board from ten to 11 directorships, and to offer to
appoint the TRT Designee to fill such new directorship.  If the TRT Designee accepts such offer, the
Board may appoint him to fill such directorship.  Upon such appointment, the TRT Designee shall
be a member of the class of directors designated as Class II in the Certificate
of Incorporation, with a term expiring at the annual meeting of the Company’s
stockholders in 2009.  If the TRT
Designee declines to accept any such offer, the Board shall not appoint any
person to fill such directorship, as more fully provided in Section 2.05.


c)     The Board shall (i) nominate the Second TP Designee to stand for
election as a director of the Company at the 2007 Annual Meeting, (ii)
recommend such election and solicit proxies in respect thereof in accordance
with its past practice and (iii) vote the Voting Securities represented by all
proxies granted by stockholders in connection with the solicitation of proxies
by the Board for such meeting in favor of the Second TP Designee, except to the
extent that the Board or its proxy holder(s) determine such proxies indicate a
vote to withhold authority or abstain with respect to the Second TP Designee.


d)    Except as otherwise provided in this Agreement, while serving on
the Board and any committee thereof, each Board Designee shall be entitled to
all the rights and privileges, and subject to all the duties and obligations,
of the other directors and committee members of the Board, in their capacities
as such.  The Company acknowledges that
the Board Designees, in their capacity as directors, shall have the right to
have direct access to the Strategic Advisor for informational purposes
regarding its work in its capacity as such; provided that
such access shall be at such times as such directors and the Strategic Advisor
determine to be mutually convenient.  It
is understood and agreed that the Strategic Advisor’s work shall continue to be
directed by the full Board, acting through the management of the Company, and
that such directors individually shall not be entitled to direct the Strategic
Advisor’s work.


e)     Upon the Board Designees’ becoming
members of the Board as provided above in this Section 2.01, the Board shall
appoint each Board Designee to the Management Committee.  Promptly after the Third Point Designees have
become members of the Board, the Board shall appoint Mr. Loeb to the Executive
Committee and Mr. Radoff to both the Compensation Committee and the Nominating
& Corporate Governance Committee. 
Neither of Messrs. Loeb and Radoff shall be removed from such committee
assignments without their consent so long as they remain members of the
Board.  Any replacement for either Mr.
Loeb or Mr. Radoff on the Board pursuant to Section 2.03 shall be appointed to
the Board committees on which the Third Point Designee being replaced served,
and no such replacement shall be removed from such committee assignments
without their consent so long as they remain members of the Board.  The two preceding sentences shall not affect
the Board’s ability to remove any such person from any such committee for an
intentional violation of law committed by such person that relates to such
person’s service on such committee.


f)     Each Third Point Designee acknowledges that the Board, in the
exercise of its fiduciary duties, may recuse either or both of them from any Board
or committee meeting or portion thereof at which the Board or any such
committee is evaluating and/or taking action with respect to (i) the ownership
of Equity Securities by any member of the Third Point Group, (ii) the



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exercise of any of
the Company’s rights or enforcement of any of the obligations under this
Agreement, (iii) any transaction with any member of the Third Point Group
or (iv) any other matter in which the interests of a member of the Third Point
Group are adverse to those of the Company, except for such matters that are
applicable to directors on the Board generally.


Section 2.02.
Third Point Designee Resignations.


a)             Notwithstanding
any other provision of this Agreement to the contrary, each Third Point
Designee hereby irrevocably resigns as a director of the Company, effective
immediately upon the Resignation Date. 
The parties agree and acknowledge that the preceding sentence shall
serve as each Third Point Designee’s formal resignation delivered to the
Company and that no additional agreement, notice or action shall be necessary
to immediately effectuate such resignations in accordance therewith.  The Holders agree that they shall not contest or seek to contest
the validity or effectiveness of such resignations.


b)            Notwithstanding any other provision of this Agreement to
the contrary,  each Third
Point Designee hereby irrevocably resigns as a director of the Company,
effective immediately upon the occurrence of a Termination Event applicable to
such Third Point Designee.  The parties
agree and acknowledge that the preceding sentence shall serve as each Third
Point Designee’s formal resignation delivered to the Company and that no
additional agreement, notice or action shall be necessary to immediately
effectuate such resignations in accordance therewith.  The Holders agree that they shall not contest or seek to contest
the validity or effectiveness of such Third Point Designee’s resignation.


Section 2.03 Certain Third Point
Designee Replacements.


a)             If
a Third Point Designee dies or is disabled such that he is rendered unable to
serve on the Board, or following the resignation of a Third Point Designee
resulting from a Termination Event, the Holders shall be entitled to nominate a
replacement for the vacancy left by such death, disability or resignation of
such Third Point Designee.


b)            In
the event that a Third Point Designee resigns from the Board after the 2007
Annual Meeting and prior to the tenth day preceding the 2008 Annual Meeting,
other than as a result of the events specified in paragraph (a) of this
Section, the Holders shall be entitled to nominate a replacement for the
vacancy left by such resignation of such Third Point Designee.


c)             Nominations
pursuant to paragraph (a) or (b) of this Section 2.03 shall be made by written
notice delivered to the Company in accordance with Section 7.04.  Each such nominee shall be an individual of
high personal and professional integrity and ethics, relevant expertise and
professional experience and possess such other qualifications necessary for service
on the Board, as determined by the Nominating & Corporate Governance
Committee of the Board.  Each such
nominee shall be promptly reviewed by the Nominating & Corporate Governance
Committee and, subject to the approval of such committee, thereafter recommended
by such committee to the Board for election to the Board; provided
that the foregoing recommendation and election shall not be unreasonably
withheld or delayed; and provided further that
it shall be a condition to any such nominee’s election to the Board that such
nominee agree in writing to be bound by the provisions of this Agreement.



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d)            Once
a vacancy described in paragraph (b) of this Section has been filled a single
time in accordance with paragraph (c), the rights in paragraph (b) shall
terminate with respect to such directorship, such that the Holders shall have
no rights to nominate, and the Company shall have no obligations to review or
elect nominees, with respect to more than a total of two such vacancies (one
for each Third Point Designee directorship).


e)             For
the avoidance of doubt, any and all rights and obligations under this Section
2.03 terminate upon the Resignation Date.


Section 2.04  Board Committee Regarding Strategic Alternatives.
In the event that the Board forms a committee of the Board to oversee or
monitor the Strategic Alternatives Process, the Board shall, in connection with
the establishment of any such committee, cause the Third Point Designees to be
members of such committee; provided that
no Board Designee shall be entitled to be a member of any committee formed for
the purpose of evaluating and/or taking action with respect to any transaction
with such Board Designee or its respective Affiliates.


Section 2.05. Restrictions on Charter and Bylaw Amendments and
Board Size.


a)             The
Company agrees that it will not, prior to the 2008 Annual Meeting, adopt by
action of the Board any amendment to the Bylaws that would (i) affect the
ability of the stockholders to amend the Bylaws, (ii) change the advance notice
provisions of the Bylaws set forth in Section 9 or 10 of Article I thereof or
impose any other notification requirement on stockholders of the Company
regarding business to be conducted at stockholder meetings or (iii) prescribe
any qualifications for directors.  The
Company also agrees that it will not, prior to the 2008 Annual Meeting, (a)
create any additional directorship except as provided in this Agreement and
except for any directorship included in the class of directors that has a term
that ends at the 2008 Annual Meeting or (b) propose any amendment to the
Certificate of Incorporation.


b)            If
the TRT Designee declines to accept any offer made pursuant to Section 2.01(b),
the Board shall not appoint any person to fill such directorship and shall take
such action as necessary to keep the size of the Board at ten directors until
the 2008 Annual Meeting (subject to paragraph (a) of this Section).  If the TRT Designee accepts any such offer
and, prior to the 2008 Annual Meeting, dies, becomes disabled such that he is
rendered unable to serve on the Board or resigns from the Board, the Board
shall not appoint any person to fill such vacancy and shall take such action as
necessary to reduce the number of directorships by one and to keep the size of
the Board at ten directors until the 2008 Annual Meeting (subject to paragraph
(a) of this Section).  If such death,
disability or resignation occurs on or after the tenth day preceding the
stockholder notice deadline for proposals or director nominations in Sections 9
and 10 of Article I of the Bylaws, the Company agrees not to assert
noncompliance with such deadline with respect to a TRT Vacancy Proposal
otherwise compliant with Sections 9 and 10 of Article I of the Bylaws that is
delivered to the Company within ten days of notice to Third Point of such
death, disability or resignation.


Section 2.06. Designee Information. The Holders
agree to provide to the Company, without unreasonable delay, true and complete
information regarding each Third



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Point Designee required
for inclusion in the Company’s proxy statement relating to the 2007 Annual
Meeting.


ARTICLE III


VOTING


Until the
Standstill Termination Date, at each meeting of stockholders of the Company
held for the purpose of electing any member of the Board, the Holders shall
cause all Voting Securities beneficially owned by any member of the Third Point
Group, and with respect to which any such member has voting rights on the
applicable record date, to be present at such meeting for purposes of
establishing a quorum and to be voted (a) for the director nominees recommended
by the Board (provided such nominations do not constitute a violation of this
Agreement), (b) in accordance with the recommendation of the Board on any
proposals of any other stockholder of the Company who is proposing one or more
nominees for election as director in opposition to the nominees of the Board at
any such meeting and (c) as such member of the Third Point Group determines is
appropriate on all other proposals of the Board and any proposals by other
stockholders of the Company not covered by clause (a) or (b) above.  No later than five business days prior to
each such meeting of stockholders, the Holders shall cause all Voting
Securities beneficially owned by any member of the Third Point Group to be
voted in accordance with this Article III.  No Holder shall, and each Holder
agrees to cause each member of the Third Point Group not to, revoke or change
any vote or instruction to vote in connection with any such meeting of
stockholders unless such revocation or change is required or permitted in
accordance with the first sentence of this Article III.


ARTICLE
IV


OTHER
AGREEMENTS


Section 4.01.  Standstill. From the date hereof
through the Standstill Termination Date, no Holder shall, and each Holder
agrees to cause each member of the Third Point Group not to, directly or
indirectly,


(a)           (i) engage in any “solicitation” of “proxies”
(as such terms are defined in Rule 14a-1 promulgated under the Exchange Act) or
make any communication exempted from the definition of “solicitation” by Rule
14a-1(l)(2)(iv), (ii) submit any proposal for consideration at any annual or
special meeting of the stockholders of the Company (including pursuant to Rule
14a-8 promulgated under the Exchange Act), (iii) otherwise engage in any course
of conduct with the purpose of causing other Company stockholders to vote
contrary to the recommendation of the Board on any matter presented to them for
a vote or (iv) enter into any discussions, negotiations, arrangements or
understandings with any Person other than the Company with respect to any of
the foregoing, advise, assist, encourage or seek to persuade others to take any
action with respect to any of the foregoing or announce any plan or proposal to
take any action with respect to any of the foregoing; or


(b)           (i) otherwise act, alone or in
concert with others, to seek to control



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or influence the
management, Board or policies of the Company or (ii) enter into any
discussions, negotiations, arrangements or understandings with any Person other
than the Company with respect to any of the foregoing, advise, assist,
encourage or seek to persuade others to take any action with respect to any of
the foregoing or announce any plan or proposal to take any action with respect
to any of the foregoing; provided that
this clause (b) shall not apply to actions taken by a Third Point Designee
while serving as a member of the Board and in his capacity as such.


Section 4.02.  Expenses.  The
Company shall reimburse Third Point and its Affiliates for all out-of-pocket
costs and expenses actually and reasonably incurred by Third Point and its
Affiliates, to the extent such expenses (a) have been substantiated in
appropriate documentation provided to the Company and (b) are directly related
to (i) the preparation and filing of any proxy materials relating to the 2007
Annual Meeting by Third Point and its Affiliates, (ii) the preparation for and
the solicitation of proxies for such meeting, including without limitation
legal fees and the fees of the proxy solicitor retained by Third Point and its
Affiliates for such meeting or (iii) their efforts to cause the Company to
pursue the Strategic Alternatives Process; provided, that
reimbursement of such expenses shall not exceed $200,000 in the aggregate.


Section
4.03.  No Public Information.
Each Holder hereby agrees to keep confidential and not to disclose to any Person,
and to cause its representatives, each member of the Third Point Group and
their representatives to keep confidential and not to disclose to any Person,
all Confidential Information, in each case except to the extent the Company has
given its prior written consent.  This
Section 4.03 will survive termination of this Agreement for 18 months.


Section
4.04.  2008 Annual Meeting.
The Company agrees to hold the 2008 Annual Meeting no earlier than May 31, 2008
and no later than June 30, 2008.


ARTICLE V


REPRESENTATIONS
AND WARRANTIES OF THE HOLDERS


The Holders, jointly and severally, hereby represent
and warrant to the Company as follows:


Section 5.01.  Incorporation.
Each Holder, with the exception of the Third Point Designees, is a limited
liability company, a Cayman Islands limited liability exempted company, a
British Virgin Islands limited liability company, a Delaware limited
partnership or a Jersey public company with limited liability, each as the case
may be, duly formed, validly existing and in good standing under the laws of
the jurisdiction in which it was formed. Each Holder has the requisite power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.


Section 5.02.  Authority. This Agreement has been
duly and validly executed and delivered by each Holder and constitutes a legal,
valid and binding obligation of each such Holder enforceable against such
Holder in accordance with its terms, except as enforceability



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may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law).


Section 5.03.  No Conflicts. The execution and
delivery by each Holder of this Agreement do not, and the performance by each
Holder of such Holder’s obligations under this Agreement and the consummation
of the transactions contemplated hereby will not:


a)     conflict
with or result in a violation or breach of any term or provision of any law,
statute, rule or regulation or any order, judgment or decree of any
Governmental or Regulatory Authority applicable to such Holder or any of such Holder’s
properties or assets; or


b)    (i)
conflict with or result in a violation or breach of, (ii) constitute (with or
without notice or lapse of time or both) a default under, (iii) require such
Holder to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of or (iv) result
in the creation or imposition of any lien upon any of such Holder’s properties
or assets under, any contract, agreement, plan, permit or license to which such
Holder is a party.


Section 5.04.  Governmental Approvals and Filings. No
consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority on the part of any Holder is required in connection with
the execution and delivery of this Agreement, other than any filing with the
Commission required in connection with the execution and/or delivery of this
Agreement or the joint press release referred to in Section 7.01.


Section 5.05.  Third Point Shares. No member of the
Third Point Group beneficially owns any Equity Securities other than as
disclosed in the Schedule 13D.


Section 5.06.  Absence of Certain Events. No event
has occurred with respect to either Third Point Designee that would require
disclosure in the Company’s proxy statement for the 2007 Annual Meeting under
Item 401(f) of Regulation S-K promulgated by the Commission.


ARTICLE VI


REPRESENTATIONS AND WARRANTIES OF THE COMPANY


The Company hereby represents and warrants to the
Holders as follows:


Section 6.01.  Incorporation. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. the Company has the requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.


Section 6.02.  Authority. The execution and
delivery by the Company of this Agreement, and the performance by the Company
of its obligations hereunder, have been duly and validly authorized by the Board,
no other corporate action on the part of the Company or its stockholders being
necessary. This Agreement has been duly and validly executed and delivered



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by the Company and
constitutes a legal, valid and binding obligation of the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).


Section 6.03.  No Conflicts. The execution and
delivery by the Company of this Agreement do not, and the performance by the
Company of its obligations under this Agreement 
and the consummation of the transactions contemplated hereby will not:


a)     conflict
with or result in a violation or breach of any of the terms, conditions or
provisions of the Certificate of Incorporation or Bylaws;


b)    conflict
with or result in a violation or breach of any term or provision of any law,
statute, rule or regulation or any order, judgment or decree of any
Governmental or Regulatory Authority applicable to the Company or any of its
properties or asset; or


c)     (i)
conflict with or result in a violation or breach of, (ii) constitute (with or
without notice or lapse of time or both) a default under, (iii) require the
Company to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of or (iv) result
in the creation or imposition of any lien upon the Company or any of its
properties or assets under, any contract, agreement, plan, permit or license to
which the Company is a party, except, in the case of clause (iii), for filings
with the Commission in connection with the matters provided for in Article II.


Section 6.04.  Governmental Approvals and Filings.
No consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority on the part of the Company is required in connection with
the execution and delivery of this Agreement, other than any filing with the
Commission required in connection with the execution and/or delivery of this
Agreement or the press release referred to in Section 7.01.


Section
6.05.  No Other Representations
or Warranties. Neither the Company nor any other Person makes
any other express or implied representation or warranty on behalf of the
Company other than as expressly set forth in this Article VI.


ARTICLE
VII


GENERAL
PROVISIONS


Section 7.01.  Publicity. Promptly
after execution and delivery of this Agreement, the Company agrees to issue a
press release announcing the principal terms hereof in substantially the form
attached hereto as Exhibit A.


Section 7.02.  Amendment and Waiver. This Agreement
may not be amended or supplemented, and no waivers or consents to departures
from the provisions hereof will be effective, unless set forth in a writing
agreed to, signed by, and delivered to, the Company, on one hand, and the
Holders, on the other.  No failure or
delay of any party in exercising any power



 11
 









or right under this
Agreement will operate as a waiver thereof, nor will any single or partial
exercise of any right or power, or any abandonment or discontinuance of steps
to enforce such right or power, preclude any other or further exercise thereof
or the exercise of any other right or power.


Section
7.03.  Mutual Non-Disparagement.
Until the Standstill Termination Date, the Company and the Holders agree not
to, the Company agrees to cause each of its directors (excluding the Third
Point Designees and the TRT Designee) and officers not to, and each Holder
agrees to cause each member of the Third Point Group not to, make any
statement, written or oral, to any Person (i) reasonably likely to be harmful
to the other party or parties or its or their officers, directors or employees
or to be injurious to the goodwill, reputation or business standing of the
other party or parties or its or their officers, directors or employees or (ii)
that is disparaging or defamatory about the Company or the Holders, as the case
may be, or their respective officers, directors or employees; provided, however, that this Section 7.03 shall not preclude
(a) any party or its representatives from (i) any good faith response to any inquiries
under oath or in response to inquiry by a Governmental or Regulatory Authority
or (ii) any notification to a Governmental or Regulatory Authority reporting a
violation of applicable law, regulations or standards governed by such
authority, if such notification is, upon advice of counsel, required by such
Person to be so made, and provided that such Person uses reasonable best
efforts to keep such notification confidential or (b) any director, in the
exercise of his or her fiduciary duties, from making statements during meetings
of the board or any committees thereof of which he or she is a member.


Section 7.04.  Notices.


a)     For all purposes of this Agreement, the Company shall not be
required to recognize any notice purportedly delivered by or on behalf of any
Holder or any other member of the Third Point Group unless such notice is
delivered to the Company by or on behalf of Third Point.


b)    All notices, requests and other communications hereunder must be
in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or by reputable overnight courier
(costs prepaid) to the parties at the following addresses or facsimile numbers:


If to any Holder
or other member of the Third Point Group, to:


Third
Point LLC

390 Park Avenue

New York, New York 10022

Facsimile No.:  (212) 224-7401

Attn:  Daniel S. Loeb


with a copy to:


Willkie
Farr & Gallagher LLP

787 Seventh Avenue

New York, New York  10019

Facsimile No.:    (212) 728-9267

Attn:  Michael A. Schwartz



 12
 









If to the Company,
to:


Pogo
Producing Company

5 Greenway Plaza, Suite 2700

Houston, Texas 77064-0504

Facsimile No.:    (713) 297-4970

Attn:  General Counsel


with a copy to:


Baker
Botts L.L.P.

910 Louisiana Street

One Shell Plaza

Houston, Texas 77046-0504

Facsimile No.:   (713) 229-7775

Attn:    Stephen A. Massad


All such notices, requests and other communications
will (i) if delivered personally to the address as provided in this Section, be
deemed given upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided in this Section, be deemed given upon receipt, and
(iii) if delivered by overnight courier in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received
by any other person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section). Any party from time
to time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other parties hereto.


Section 7.05.  Entire Agreement. This Agreement,
including the Schedule attached hereto, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein.  This Agreement supersedes all
prior agreements, understandings and discussions between the parties hereto
with respect to such subject matter.


Section 7.06.  No Third Party Beneficiary. The
terms and provisions of this Agreement are intended solely for the benefit of
each party hereto, and it is not the intention of the parties to confer third
party beneficiary rights upon any other Person.


Section 7.07.  No Assignment; Binding Effect. Neither
this Agreement nor any right, interest or obligation hereunder may be assigned
by any parties hereto without the prior written consent of the other party
hereto and any attempt to do so will be void. 
Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns and legal representatives.  The obligations of the Holders in this Agreement
are joint and several.



 13
 









Section 7.08.  Specific Performance. The parties
acknowledge that money damages are not an adequate remedy for violations of any
provision of this Agreement and that any party may, in such party’s sole
discretion, apply to the Delaware Court of Chancery for specific performance
for injunctive or such other relief as such court may deem just and proper in
order to enforce any such provision or prevent any violation hereof and, to the
extent permitted by applicable law, each party waives any objection to the
imposition of such relief.


Section 7.09.  Headings. The headings used in this
Agreement have been inserted for convenience of reference only and do not
define or limit the provisions hereof.


Section 7.10.  Invalid Provisions. If any provision
of this Agreement is held to be illegal, invalid or unenforceable under any
present or future law, and if the intended rights of any party hereto under
this Agreement will not be forfeited in any material respect as a result
thereof, (i) such provision will be fully severable, (ii) this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof and (iii) the remaining provisions
of this Agreement will remain in full force and effect and will not be affected
by the illegal, invalid or unenforceable provision or by its severance
herefrom.


Section 7.11.  Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware applicable to a contract executed and performed in such State, without
giving effect to the conflicts of laws principles thereof.


Section
7.12.  Consent to Jurisdiction
and Service of Process. Each party hereby irrevocably submits to
the exclusive jurisdiction of the Delaware Court of Chancery in any action,
suit or proceeding arising out of or in connection with this Agreement, agrees
that any such action, suit or proceeding shall be brought only in such court
(and waives any objection based on forum non conveniens
or any other objection to venue therein to the extent permitted by law), and
agrees to delivery of service of process by any of the methods by which notices
may be given pursuant to Section 7.04, with such service being deemed given as
provided in such Section; provided, however, that such consent to jurisdiction is solely for the
purpose referred to in this Section 7.12 and shall not be deemed to be a
general submission to the jurisdiction of said courts or in the State of
Delaware other than for such purpose.


Section 7.13.  Counterparts.
This Agreement may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.


Section
7.14.  Termination.
This Agreement may be terminated (i) by mutual written agreement of the parties
hereto or (ii) by either the Company or the Holders if any material breach of
this Agreement has been committed by any of the Holders or the Company,
respectively, and such breach has not been waived.  The provisions of Section 2.02 shall survive
any termination of this Agreement indefinitely, and the provisions of Section
4.03 shall survive any termination of this Agreement for the period provided
therein.



 14
 









Section 7.15  Holder Representative; Appointment of
Attorney-in-Fact Each Holder, by its execution of this
Agreement, hereby irrevocably appoints Third Point LLC (the “Holder Representative”) as its agent, proxy and
attorney-in-fact for all purposes of this Agreement, including, without
limitation, entering into and granting any amendments, modifications, waivers
or consents hereunder or hereto.  The
Company and its representatives need not be concerned with, and shall be
entitled to rely on, the authority of the Holder Representative to act and communicate
on behalf of all Holders hereunder, and the Company and its representatives
shall not be held liable or accountable in any manner for any act or omission
of the Holder Representative in such capacity. 
The grant of authority provided for in this Section 7.15 is coupled with
an interest and is being granted, in part, as an inducement to the parties to
enter into this Agreement, shall be irrevocable and survive the death,
incompetency, bankruptcy or liquidation of any Holder and shall be binding on
any successor thereto.



 15














IN WITNESS WHEREOF, each party hereto has signed this
Agreement, or caused this Agreement to be signed on its behalf, on the date
first above written.


	
  

  	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Paul G. Van Wagenen

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Paul G. Van Wagenen

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Chairman, President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THIRD POINT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Daniel S. Loeb

  
	
   

  	
   

  	
  Daniel S. Loeb

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Bradley L. Radoff

  
	
   

  	
   

  	
  Bradley L. Radoff

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THIRD POINT OFFSHORE FUND, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THIRD POINT ULTRA LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  Third Point LLC, its Investment Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer

  



 











 


	
  

  	
   

  	
  THIRD POINT PARTNERS LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  Third Point Advisors LLC, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THIRD POINT PARTNERS QUALIFIED LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  Third Point Advisors LLC, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LYXOR/THIRD POINT FUND LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  Third Point LLC, its Investment Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Daniel S. Loeb

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer