ex10_2.htm


    
      
Exhibit
      10.2


    SECOND
      AMENDED AND RESTATED EMPLOYMENT AGREEMENT

    


    


    This
      Second Amended and Restated Employment Agreement (this “Agreement”), effective
      as of July 1,
      2007 (the “Second Amendment Date”), is between Rosetta Resources Inc., a
      Delaware corporation (“Employer”), and Michael J. Rosinski (“Executive”), and
      supersedes and replaces that certain Amended and Restated Employment Agreement
      between Executive and Employer which became effective on July 7, 2005 (the
      “Effective Date”).

    


    WHEREAS,
      Executive has been employed as Executive Vice President, Chief Financial
      Officer, Secretary and Treasurer of Employer pursuant to an Amended and Restated
      Employment Agreement dated July 7, 2005 between Executive and Employer (the
      “Superseded Agreement”); and

    


    WHEREAS,
      Executive and Employer desire to further amend and restate the Amended and
      Restated Employment Agreement to reflect the mutually agreed upon modifications
      to the terms and conditions of Executive’s continued employment with Employer;
      and

    


    WHEREAS,
      Executive and Employer have agreed to embody in this Agreement the mutually
      agreed upon modifications to the terms and conditions of Executive’s continued
      employment with Employer; and

    


    WHEREAS,
      except as expressly provided herein, this Agreement shall supersede all prior
      oral and written agreements, arrangements, and understandings, including without
      limitation the Superseded Agreement and any prior versions of the Superseded
      Agreement, and represents the entire agreement of the parties relating to the
      terms and conditions of Executive’s continued employment with
      Employer;

    


    NOW,
      THEREFORE, the parties hereto agree as follows:

    


    1.       
           Definitions.  As used in this
      Agreement, the following terms have the following meanings:

    


    (a)           “Affiliate”
      means, with respect to any entity, any other corporation, organization,
      association, partnership, sole proprietorship or other type of entity, whether
      incorporated or unincorporated, directly or indirectly controlling or controlled
      by or under direct or indirect common control with such entity.

    


    (b)           “Annual
      Period” means the time period of each year beginning on the first day of the
      Employment Term and ending on the day before the anniversary of that
      date.

    


    (c)           “Board”
      means the Board of Directors of Employer.

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    (d)           “Cause”
      means a finding by the Board of acts or omissions, whether occurring during
      or
      before the Employment Term, constituting, in the Board’s reasonable judgment,
      (i) a breach of duty by Executive in the course of his employment involving
      fraud, acts of dishonesty (other than inadvertent acts or omissions), disloyalty
      to Employer or its Affiliates, or moral turpitude constituting criminal felony;
      (ii) conduct by Executive that is materially detrimental to Employer, monetarily
      or otherwise, or reflects unfavorably on Employer or Executive to such an extent
      that Employer’s best interests reasonably require the termination of Executive’s
      employment; (iii) acts or omissions of Executive materially in violation of
      his
      obligations under this Agreement or at law; (iv) Executive’s failure to comply
      with or enforce Employer’s policies concerning equal employment opportunity,
      including engaging in sexually or otherwise harassing conduct; (v) Executive’s
      repeated insubordination; (vi) Executive’s failure to comply with or enforce, in
      any material respect, all other personnel policies of Employer or its
      Affiliates; (vii) Executive’s failure to devote his full working time and best
      efforts to the performance of his responsibilities to Employer or its
      Affiliates; (viii) Executive’s conviction of, or entry of a plea agreement or
      consent decree or similar arrangement with respect to a felony or any violation
      of federal or state securities laws; or (ix) Executive’s failure to cooperate
      with any investigation or inquiry authorized by the Board or conducted by a
      governmental authority related to the business or Executive’s
      conduct.

    


    (e)           “Corporate
      Change” means (i) the dissolution or liquidation of Employer; (ii) a
      reorganization, merger or consolidation of Employer with one or more
      corporations (other than a merger or consolidation effecting a reincorporation
      of Employer in another state or any other merger or consolidation in which
      the
      shareholders of the surviving corporation and their proportionate interests
      therein immediately after the merger or consolidation are substantially
      identical to the shareholders of Employer and their proportionate interests
      therein immediately prior to the merger or consolidation) (collectively, a
      “Corporate Change Merger”); (iii) the sale of all or substantially all of the
      assets of Employer or an affiliate as defined in the Rosetta Resources Inc.
      2005
      Long-Term Incentive Plan; or (iv) the occurrence of a Change in
      Control.  A “Change in Control” shall be deemed to have occurred if
      (x) individuals who were directors of Employer immediately prior to a Control
      Transaction shall cease, within two years of such Control Transaction to
      constitute a majority of the Board of Directors of Employer (or of the Board
      of
      Directors of any successor to Employer or to a company which has acquired all
      or
      substantially all its assets) other than by reason of an increase in the size
      of
      the membership of the applicable Board that is approved by at least a majority
      of the individuals who were directors of Employer immediately prior to such
      Control Transaction or (y) any entity, person or Group acquires shares of
      Employer in a transaction or series of transactions that result in such entity,
      person or Group directly or indirectly owning beneficially 50% or more of the
      outstanding shares of Common Stock.  As used herein, “Control
      Transaction” means (A) any tender offer for or acquisition of capital stock of
      Employer pursuant to which any person, entity, or Group directly or indirectly
      acquires beneficial ownership of 20% or more of the outstanding shares of Common
      Stock; (B) any Corporate Change Merger of Employer; (C) any contested election
      of directors of Employer; or (D) any combination of the foregoing, any one
      of
      which results in a change in voting power sufficient to elect a majority of
      the
      Board of Directors of Employer.  As used herein, “Group” means persons
      who act “in concert” as described in Sections 13(d)(3) and/or 14(d)(2) of the
      Securities Exchange Act of 1934, as amended.  Notwithstanding the
      foregoing, “Corporate Change” shall not include the Acquisition, the Offering or
      any public offering of equity of Employer pursuant to a registration that is
      effective under the Securities Act of 1933, as amended.  As used
      herein, “Acquisition” and “Offering” shall have the same meaning given to those
      terms in the Rosetta Resources
      Inc. 2005 Long-Term Incentive Plan.

    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    


    (f)           “Competitor”
      means any person or entity that is engaged in the acquisition, exploration,
      development and production of oil and gas properties in competition with the
      activities of Employer or an Affiliate.

    


    (g)           “Confidential
      Information” means, without limitation, all documents or information, in
      whatever form or medium, concerning or evidencing sales; costs; pricing;
      strategies; forecasts and long range plans; financial and tax information;
      personnel information; business, marketing and operational projections, plans
      and opportunities; customer, vendor, and supplier information; geological and
      geophysical maps, data, interpretations, and analyses; project and prospect
      locations and leads; well logs, interpretations, and analyses; and production
      information; but excluding any such information that is or becomes generally
      available to the public other than as a result of any breach of this Agreement
      or other unauthorized disclosure by Executive.

    


    (h)           “Employment
      Termination Date” means the effective date of termination of Executive’s
      employment as established under Paragraph 6(g).

    


    (i)           
      “Good Reason” means any of the following actions if taken without Executive’s
      prior written consent: (i) any demotion of Executive as evidenced by a material
      diminution in Executive’s responsibilities or duties; (ii) a material diminution
      in Executive’s base compensation; (iii) any permanent relocation of Executive’s
      place of business to a location 50 miles or more from the then-current location,
      provided such relocation is a material change in geographic location at which
      Executive must provide services for purposes of Section 409A of the Internal
      Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder; or
      (iv) any other action or inaction by Employer that constitutes a material breach
      by Employer of its obligations under Paragraphs 12 or 20 of this
      Agreement.  Neither a transfer of employment among Employer and any of
      its Affiliates, a change in the co-employment relationship, nor a mere change
      in
      job title constitutes “Good Reason.”  Without limiting the generality
      of the forgoing provisions defining “Good Reason,” the parties hereto
      specifically agree that the subsequent election of a new Chief Executive Officer
      and President, pursuant to a search underway at the Second  Amendment
      Date, at which time the temporary supplemental executive compensation provided
      for herein shall cease, shall not constitute a material reduction in Executive’s
      responsibilities, duties, compensation, or benefits, and shall not otherwise
      constitute “Good Reason” for any purpose under this Agreement.

    


    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    


    (j)           “Inability
      to Perform” means and shall be deemed to have occurred if Executive has been
      determined under Employer’s long-term disability plan to be eligible for
      long-term disability benefits.  In the absence of Executive’s
      participation in, application for benefits under, or existence of such a plan,
      “Inability to Perform” means a finding by the Board in its sole judgment that
      Executive is, despite any reasonable accommodation required by law, unable
      to
      perform the essential functions of his position because of an illness or injury
      for (i) 60% or more of the normal working days during six consecutive
      calendar months or (ii) 40% or more of the normal working days during twelve
      consecutive calendar months.

    


    (k)           “Work
      Product” means all ideas, works of authorship, inventions, and other creations,
      whether or not patentable, copyrightable, or subject to other
      intellectual-property protection, that are made, conceived, developed or worked
      on in whole or in part by Executive while employed by Employer and/or any of
      its
      Affiliates, that relate in any manner whatsoever to the business, existing
      or
      proposed, of Employer and/or any of its Affiliates, or any other business or
      research or development effort in which Employer and/or any of its Affiliates
      engages during Executive’s employment.  Work Product includes any
      material previously conceived, made, developed, or worked on during Executive’s
      employment with Calpine and any Affiliate.

    


    2.           Employment.  Employer
      agrees to employ Executive (directly or through an Affiliate), and Executive
      agrees to be employed, for the period set forth in Paragraph
      3.  Executive will be employed in the position and with the duties and
      responsibilities set forth in Paragraph 4(a) and upon the other terms and
      conditions set out in this Agreement.  Employer and Executive agree
      that such employment may be through a co-employment relationship with a
      professional employer organization.

    


    3.           Term.  Executive’s
      employment shall commence on the Effective Date and shall be for an initial
      term
      of two consecutive Annual Periods (the “Employment Term”), unless sooner
      terminated as provided in this Agreement.  Subject to earlier
      termination as provided in this Agreement, the Employment Term shall be
      automatically extended for an additional Annual Period unless either Executive
      or Employer gives written notice to the other six months or more prior to the
      end of the initial term or, if the Agreement has been automatically extended
      beyond the initial term, six months or more prior to the end of the additional
      Annual Period.  In the event of such an automatic extension, each
      additional Annual Period shall be part of the “Employment Term.”  Upon
      such timely written notice, Executive’s employment and this Agreement will end
      upon the expiration of the Employment Term.  The ending of Executive’s
      employment as a result of the expiration of the Employment Term shall not
      constitute a termination of employment by either party under this
      Agreement.

    


    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    


    4.        
          Position and Duties.

    


    (a)           Executive
      shall be employed as Executive Vice President, Chief Financial Officer,
      Secretary and Treasurer.  In such capacity, Executive, subject to the
      ultimate control and direction of the Chief Executive Officer of Employer,
      shall
      have such duties, functions, responsibilities, and authority as are from time
      to
      time delegated to Executive by the Chief Executive Officer of Employer;
      provided, however, that such duties, functions, responsibilities, and authority
      are reasonable and customary for a person serving in the same or similar
      capacity of an enterprise comparable to Employer.

    


    (b)           During
      the Employment Term, Executive shall devote his full time, skill, and attention
      and his best efforts to the business and affairs of Employer to the extent
      necessary to discharge fully, faithfully, and efficiently the duties and
      responsibilities delegated and assigned to Executive in or pursuant to this
      Agreement, except for usual, ordinary, and customary periods of vacation and
      absence due to illness or other disability.

    


    (c)           In
      connection with Executive’s employment under this Agreement, Executive shall be
      based in Houston, Texas, or at any other place where the principal executive
      offices of Employer may be located during the Employment
      Term.  Executive also will engage in such travel as the performance of
      Executive’s duties in the business of Employer may require.

    


    (d)           All
      services that Executive may render to Employer or any of its Affiliates in
      any
      capacity during the Employment Term shall be deemed to be services required
      by
      this Agreement and the consideration for such services is that provided for
      in
      this Agreement.

    


    (e)           Executive
      hereby acknowledges that he has read and is familiar with Employer’s policies,
      including but not limited to those regarding business ethics and conduct and
      securities trading, and will comply with all such policies, and any amendments
      thereto, during the Employment Term.

    


    5.        
          Compensation and Related Matters.

    


    (a)           Base
      Salary; Temporary Supplemental Compensation.  During each
      Annual Period of the Employment Term, Employer shall pay to Executive for his
      services under this Agreement an annual base salary (“Base
      Salary”).  The Base Salary shall be $250,000 effective as of the
      Second Amendment Date.  The Base Salary is subject to annual
      adjustments beginning in January 2008, at the discretion of the Board, but
      in no
      event shall Employer pay Executive a Base Salary less than that set forth above
      without the consent of Executive.  The Base Salary shall be payable in
      installments in accordance with the general payroll practices of Employer,
      or as
      otherwise mutually agreed upon.  In addition to the Base Salary,
      commencing on the Second Amendment Date and continuing through the last day
      of
      the month in which Employer shall elect a successor Chief Executive Officer
      and
      President to succeed the acting Chief Executive Officer and President, Charles
      F. Chambers, Employer shall pay to Executive supplemental, temporary
      compensation of $5,000 per month, in addition to the Base Salary herein
      provided.  Such supplemental, temporary compensation shall be accrued
      monthly and payable at the end of each quarter in which it is
      earned.

    


    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    


    (b)           Annual
      Incentives.  During the Employment Term, Executive will
      participate in any incentive compensation plan (ICP) applicable to Executive’s
      position, as may be adopted by Employer from time to time and in accordance
      with
      the terms of such plan(s).  Executive’s target award opportunity for
      the year  ending on December 31, 2007, will be based upon 60% of
      Executive’s Base Salary paid to Executive by Employer prorated for the number of
      months in such period as compared to a full year and shall be subject to such
      other terms, conditions and restrictions as may be established by the Board
      or
      the ICP committee.

    


    (c)           Long-Term
      Incentives.  During the Employment Term, Executive will
      participate in Employer’s long-term incentive (LTI) plan applicable to
      Executive’s position, in accordance with the terms of such
      plan(s).  Except as provided in Paragraph 5(d), Executive will
      participate in such LTI plan award opportunities as may be determined by the
      Board or the LTI committee, as applicable.

    


    (d)           Special
      Equity Grants.  On the Effective Date, Executive was granted the
      following awards pursuant to the terms of the LTI plan:

    


    (i)           A
      nonqualified stock option to purchase 30,800 shares of Employer’s common stock,
      which option have a ten year term and vest in accordance with the following
      schedule: (A) 25% of such shares (if a fractional number, then the next lower
      whole number) will vest and become purchasable on the Effective Date; (B) an
      additional 25% of such shares (if a fractional number, then the next lower
      whole
      number) will vest and become purchasable on the first anniversary of the
      Effective Date, provided Executive is in the continuous service of Employer
      or
      an Affiliate until such vesting date; (C) an additional 25% of such shares
      (if a
      fractional number, then the next lower whole number) will vest and become
      purchasable on the second anniversary of the Effective Date, provided Executive
      is in the continuous service of Employer or an Affiliate until such vesting
      date; and (D) the remaining shares will vest and become purchasable on the
      third
      anniversary of the Effective Date, provided Executive is in the continuous
      service of Employer or an Affiliate until such vesting date.

    


    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    


    (ii)           6,000
      shares of regular restricted common stock in Employer, which will vest as
      follows:  (A) 25% of such shares (if a fractional number, then the
      next lower whole number) will vest on the first anniversary of the Effective
      Date, provided Executive is in the continuous service of Employer or an
      Affiliate until such vesting date; (B) an additional 25% of such shares (if
      a
      fractional number, then the next lower whole number) will vest on the second
      anniversary of the Effective Date, provided Executive is in the continuous
      service of Employer or an Affiliate until such vesting date; and (C) the
      remaining shares will vest on the third anniversary of the Effective Date,
      provided Executive is in the continuous service of Employer or an Affiliate
      until such vesting date.

    


    (iii)           24,000
      shares of bonus restricted common stock in Employer, which will vest in full
      on
      the later to occur of (A) the day following the effective date of the Employer’s
      initial registration statement under the Securities Act of 1933, as amended,
      with respect to the Employer’s common stock or (B) the day following the
      expiration of any lock up or other restrictive agreement entered into by
      Executive with any investment banking firm in connection with
      such  initial registration, provided Executive is in the continuous
      service of Employer or an Affiliate until and on such vesting date.

    


    The
      special equity grants provided for in this Paragraph 5(d) shall be subject
      to
      the terms of the LTI plan and such other terms, conditions and restrictions
      as
      may be established by the Board or the LTI plan committee.

    


    (e)           Employee
      Benefits.  During the Employment Term, Executive shall be entitled
      to participate in all employee benefit plans, programs, and arrangements that
      are generally made available by Employer to its similarly situated employees,
      including without limitation Employer’s life insurance, long-term disability,
      and health plans.  Executive agrees to cooperate and participate in
      any medical or physical examinations as may be required by any insurance company
      in connection with the applications for such life and/or disability insurance
      policies.

    


    (f)           Expenses.  Executive
      shall be entitled to receive reimbursement for all reasonable expenses incurred
      by Executive during the Employment Term in performing his duties and
      responsibilities under this Agreement, consistent with Employer’s policies or
      practices for reimbursement of expenses incurred by other senior executives
      of
      Employer (“Business Expenses”).  Notwithstanding the foregoing, (i)
      the amount of expenses eligible for reimbursement during a calendar year may
      not
      affect the expenses eligible for reimbursement in any other calendar year,
      (ii)
      the reimbursement must be made on or before the last day of the calendar year
      following the calendar year in which the expense was incurred and (iii) the
      right to reimbursement shall not be subject to liquidation or exchange for
      any
      other benefit.

    


    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    


    (g)           Vacations.  During
      each Annual Period of the Employment Term, Executive shall be eligible for
      four
      weeks’ paid vacation, as well as sick pay and other paid and unpaid time off in
      accordance with the policies and practices of Employer.  Executive
      agrees to use his vacation and other paid time off at such times that are (i)
      consistent with the proper performance of his duties and responsibilities and
      (ii) mutually convenient for Employer and Executive.

    


    (h)           Fringe
      Benefits.  During the Employment Term, Executive shall be entitled
      to the perquisites and other fringe benefits that are made available by Employer
      to its senior executives generally and to such perquisites and fringe benefits
      that are made available by Employer to Executive in particular, subject to
      any
      applicable terms and conditions of any specific perquisite or other fringe
      benefit.

    


    6.       
           Termination of Employment and
      Agreement.

    


    (a)           Death.  Executive’s
      employment and this Agreement shall terminate automatically upon his
      death.

    


    (b)           Inability
      to Perform.  Employer may terminate this Agreement or this
      Agreement and Executive’s employment for Inability to Perform.

    


    (c)           Termination
      by Employer for Cause.  Employer may terminate Executive’s
      employment and this Agreement for Cause by providing Executive with a Notice
      of
      Termination as set out in Paragraph 6(f).  Before terminating
      Executive’s employment and this Agreement for Cause, Employer must provide
      Executive with written notice of its intent to do so, which notice must specify
      the particular circumstances or events that Employer contends gives rise to
      the
      existence of Cause; provided, however, that if Employer intends to exercise
      its
      right to terminate Executive’s employment and this Agreement in whole or part
      under provisions (v) or (vi) of the definition of Cause, Employer must first
      provide Executive with a reasonable period of time to correct those
      circumstances or events Employer contends give rise to the existence of Cause
      under such provision(s) (the “Correction Period”), but only to the extent
      Employer determines that they may reasonably be corrected.  A 30-day
      Correction Period shall be presumptively reasonable.  Executive will
      be given the opportunity within 30 calendar days of his receipt of Employer’s
      written notice of its intent to terminate Executive’s employment and this
      Agreement for Cause to defend himself with respect to the circumstances or
      events specified in such notice and in a manner and under such procedures as
      the
      Chief Executive Officer of Employer may establish.  Nothing in this
      Paragraph 6(c) precludes informal discussions between Executive and Employer
      regarding such circumstances or events.

    


    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    


    (d)           Termination
      by Executive for Good Reason.  Executive may terminate his
      employment and this Agreement for Good Reason.  To exercise his right
      to terminate for Good Reason, Executive must provide written notice to Employer
      of his belief that Good Reason exists within 60 days of the initial existence
      of
      the Good Reason condition, and that notice shall describe the condition(s)
      believed to constitute Good Reason.  Employer shall have 30 days to
      remedy the Good Reason condition(s).  If not remedied within that
      30-day period, Executive may submit a Notice of Termination; provided, however,
      that the Notice of Termination invoking Executive’s right to terminate his
      employment for Good Reason must be given no later than 100 days after the date
      the Good Reason condition first arose; otherwise, Executive is deemed to have
      accepted the condition(s), or the Employer’s correction of such condition(s),
      that may have given rise to the existence of Good Reason.

    


    (e)           Termination
      by Either Party Without Cause or Without Good Reason.  Either
      Employer or Executive may terminate Executive’s employment and this Agreement
      without Cause or Good Reason upon at least 60 days’ prior written notice to the
      other party.

    


    (f)           Notice
      of Termination.  Any termination of Executive’s employment or,
      pursuant to Paragraph 6(b), a termination of this Agreement alone, by Employer
      or by Executive (other than a termination pursuant to Paragraph 6(a)) shall
      be
      communicated by a Notice of Termination.  A “Notice of Termination” is
      a written notice that must (i) indicate the specific termination provision
      in
      this Agreement relied upon; (ii) in the case of a termination for Inability
      to
      Perform, Cause, or Good Reason, set forth in reasonable detail the facts and
      circumstances claimed to provide a basis for termination of Executive’s
      employment under the provision invoked; and (iii) if the termination is by
      Executive under Paragraph 6(e), or by Employer for any reason, specify the
      Employment Termination Date or, pursuant to Paragraph 6(b), the date of
      termination of this Agreement.  The failure by Employer or Executive
      to set forth in the Notice of Termination any fact or circumstance that
      contributes to a showing of Cause or Good Reason shall not waive any right
      of
      Employer or Executive or preclude either of them from asserting such fact or
      circumstance in enforcing or defending their rights.

    


    (g)           Employment
      Termination Date.  The Employment Termination Date, whether
      occurring before or after a Corporate Change, shall be as follows: (i) if
      Executive’s employment is terminated by his death, the date of his death; (ii)
      if Executive’s employment is terminated by Employer because of his Inability to
      Perform or for Cause, the date specified in the Notice of Termination, which
      date shall be no earlier than the date such notice is given; (iii) if
      Executive’s employment is terminated by Executive for Good Reason, the date on
      which the Notice of Termination is given; or (iv) if the termination is under
      Paragraph 6(e), the date specified in the Notice of Termination, which date
      shall be no earlier than 60 days after the date such notice is
      given.

    


    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    


    (h)           Deemed
      Resignation.  In the event of termination of Executive’s
      employment or the expiration of the Employment Term, Executive agrees that
      if at
      such time he is a member of the Board or is an officer of Employer or a director
      or officer of any of its Affiliates, he shall be deemed to have resigned from
      such position(s) effective on the Employment Termination Date or the expiration
      of the Employment Term, unless the Board notifies Executive prior to the
      Employment Termination Date or the expiration of the Employment Term of the
      Board’s desire that Executive remain a member of the Board, in which case
      Executive shall not be deemed to have resigned his position as a member of
      the
      Board merely by virtue of the termination of his employment or the expiration
      of
      the Employment Term.  Executive agrees to execute and deliver any
      documents evidencing his resignation from such positions that Employer may
      reasonably request.

    


    (i)           Investigation;
      Suspension.  Employer may suspend Executive with pay pending an
      investigation authorized by the Board or a governmental authority or a
      determination by the Board whether Executive has engaged in acts or omissions
      constituting Cause, and such paid suspension shall not constitute a termination
      of this Agreement or Executive’s employment, or Good
      Reason.  Executive agrees to cooperate with Employer in connection
      with any such investigation.

    


    7.         
         Compensation Upon Termination of Employment or Expiration
      of Employment Term.

    


    (a)           Death.  If
      Executive’s employment is terminated by reason of Executive’s death, Employer
      shall pay to such person as Executive shall designate in a written notice to
      Employer (or, if no such person is designated, to his estate) any unpaid portion
      of Executive’s Base Salary through the Employment Termination Date (the
“Compensation Payment”), any earned but unused vacation (the “Vacation
      Payment”), and any unreimbursed Business Expenses, at the time and in the manner
      required by applicable law.

    


    (b)           Inability
      to Perform.  If Executive’s employment and this Agreement is
      terminated by reason of Executive’s Inability to Perform, Employer shall pay to
      Executive the Compensation Payment, the Vacation Payment, and any unreimbursed
      Business Expenses at the time and in the manner required by applicable
      law.

    


    (c)           Termination
      by Executive Without Good Reason.  If Executive’s employment is
      terminated by Executive pursuant to and in compliance with Paragraph 6(e),
      Employer shall pay to Executive the Compensation Payment, the Vacation Payment,
      and any unreimbursed Business Expenses, at the time and in the manner required
      by applicable law.

    


    (d)           Termination
      for Cause.  If Executive’s employment is terminated by Employer
      for Cause, Employer shall pay to Executive the Compensation Payment, the
      Vacation Payment, and any unreimbursed Business Expenses, at the time and in
      the
      manner required by applicable law.

    


    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    


    (e)           Termination
      Without Cause or With Good Reason; Expiration of Employment
      Term.

    


    (i)           If
      Executive’s employment is terminated by Employer for any reason other than
      death, Inability to Perform, or Cause, or is terminated by Executive for Good
      Reason, during the Employment Term, or if either Employer or Executive gives
      timely notice pursuant to Paragraph 3 and Executive’s employment and this
      Agreement therefore ends upon the expiration of the Employment Term, Employer
      shall pay to Executive the Compensation Payment, the Vacation Payment, and
      any
      unreimbursed Business Expenses, at the time and in the manner required by
      applicable law.

    


    (ii)           In
      addition, if Executive’s employment is terminated by Employer for any reason
      other than death, Inability to Perform, or Cause, or is terminated by Executive
      for Good Reason, during the Employment Term, or if Employer gives timely notice
      pursuant to Paragraph 3 and Executive’s employment and this Agreement therefore
      ends upon the expiration of the Employment Term, Employer shall pay or provide
      to Executive in lieu of any other severance or separation benefits, at the
      time
      and in the manner provided in Paragraph 7(e)(iii), the following if, within
      45
      days after the Employment Termination Date or the expiration of the Employment
      Term, as applicable, Executive has signed a general release agreement in a
      form
      acceptable to Employer and Executive does not revoke such release:

     

    (A)          Executive’s
      Base Salary as in effect on the Employment Termination Date or the expiration
      of
      the Employment Term, as applicable, multiplied by two;

    


    (B)           ICP
      award at the target level for two years, based on the ICP award for the
      performance period in effect on the Employment Termination Date or the
      expiration of the Employment Term, as applicable;

    


    (C)           Full
      and immediate vesting of all Employer stock options and restricted stock awards
      held by Executive as of the Employment Termination Date or the expiration of
      the
      Employment Term, as applicable;

    


    (D)           With
      respect to Employer stock options that are vested prior to the Employment
      Termination Date or the expiration of the Employment Term, as applicable,
      Executive will have twelve months after the Employment Termination Date or
      the
      expiration of the Employment Term, as applicable, to exercise such stock
      options.

    


    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    


    Notwithstanding
      the foregoing, Employer’s obligation under this Paragraph 7(e)(ii) is limited as
      follows:

    


    (X)           If,
      in the reasonable judgment of Employer, Executive engages in any conduct that
      materially violates Paragraph 8 or engages in any of the
      Restricted Activities described in Paragraph 9, Employer’s obligation to make
      payments to Executive under this Paragraph 7(e)(ii), if any such obligation
      remains, shall end as of the date Employer so notifies Executive in writing;
      and

    


    (Y)           If
      Executive is found guilty or enters into a plea agreement, consent decree,
      or
      similar arrangement with respect to any felony criminal offense or any violation
      of federal or state securities laws, or has any civil enforcement action brought
      against him by any regulatory agency, for actions or omissions related to his
      employment with Employer or any of its Affiliates or if Employer reasonably
      believes that Executive has committed any act or omission that would have
      entitled Employer to terminate his employment for Cause, whether such act or
      omission was committed during his employment with Employer or any of its
      Affiliates or thereafter, (1) Employer’s obligation to make payments to
      Executive under this Paragraph 7(e)(ii) shall immediately end, and (2) Executive
      shall repay to Employer any amounts paid to him pursuant to this Paragraph
      7(e)(ii) within 30 days after a written request to do so by
      Employer.

    


    (iii)           The
      amounts provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) shall be
      paid
      as follows:

    


    (A)           An
      amount equal to (1) 25% of the amount provided for under Paragraph 7(e)(ii)(A)
      plus (2) the sum (to the extent that such sum exceeds zero) of the amounts
      provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) less the payment
      under
      Paragraph 7(e)(iii)(A)(1) less the Section 409A Exempt Amount, shall be paid
      in
      a single lump sum no later than 60 days after the Employment Termination Date
      or
      the expiration of the Employment Term, as applicable, provided that the
      Employment Termination Date or the expiration of the Employment Term, as
      applicable, constitutes a separation from service for purposes of Code Section
      409A and the regulations thereunder.  For purposes of this Agreement,
      the “Section 409A Exempt Amount” is two times the lesser of (x) Executive’s
      annualized compensation based upon the annual rate of pay for services provided
      to Employer for the calendar year preceding the calendar year in which Executive
      has a separation from service (as defined in Code Section 409A and the
      regulations thereunder) with Employer (adjusted for any increase during that
      year that was expected to continue indefinitely if the service provider had
      not
      separated from service) or (y) the maximum amount that may be taken into account
      under a qualified plan pursuant to Section 401(a)(17) of the Code for the year
      in which Executive has a separation from service.

    


    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    


    (B)           The
      Section 409A Exempt Amount or, if less, the excess of the amount provided for
      under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) over the amount paid under
      Paragraph 7(e)(iii)(A), shall be paid in equal monthly installments over a
      period of 18 months commencing on the first day of the sixth month following
      the
      Employment Termination Date or the expiration of the Employment Term, as
      applicable, provided that the Employment Termination Date or the expiration
      of
      the Employment Term, as applicable, constitutes a separation from service for
      purposes of Code Section 409A and the regulations thereunder.

    


    (C)           Notwithstanding
      the foregoing, if Executive separates from service during 2007, any amounts
      that
      would have been paid during 2007 under the terms of this Agreement as in effect
      on the day before the Second Amendment Date shall be paid at the same time
      and
      in the same manner as provided for under this Agreement as in effect on the
      day
      before the Second Amendment Date and the amount provided for under Paragraph
      7(e)(iii)(A) less any payments made during 2007 shall be paid between January
      1,
      2008 and January 10, 2008.

    


    (f)       
           Termination or Expiration of Employment Term
      Following Corporate Change.

    


    (i)           If,
      within the two-year period following a Corporate Change, Executive’s employment
      with Employer or an Affiliate or successor of Employer is terminated for any
      reason other than death, Inability to Perform, or Cause, is terminated by
      Executive for Good Reason, or if Employer or an Affiliate or successor of
      Employer gives timely notice pursuant to Paragraph 3 and Executive’s employment
      and this Agreement therefore ends upon the expiration of the Employment Term,
      Executive will be paid the Compensation Payment, the Vacation Payment and any
      unreimbursed Business Expenses, at the time and in the manner required by
      applicable law.  In addition, if, within 45 days after the Employment
      Termination Date or the expiration of the Employment Term, as applicable,
      Executive has signed a general release agreement in a form acceptable to
      Employer and Executive does not revoke such release, in lieu of any other
      payments under Paragraph 7(e)(ii), (A) Executive shall be paid a lump-sum amount
      equivalent to (x) 2 times the sum of Executive’s then-current Base Salary, and
      (y) 2 times the target ICP award for the performance period in which the
      Corporate Change occurs, and (B) any unvested Employer stock options and
      restricted stock will be immediately vested and Executive will have twelve
      months following the Employment Termination Date or expiration of the Employment
      Term, as applicable, to exercise the Employer stock options, provided that
      in no
      event may such stock options be exercised after the earlier of the latest date
      upon which the options could have expired by their original terms or the 10th anniversary
      of the
      original date of grant of the options.

    


    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    


    (ii)           The
      additional payments provided for in Paragraph 7(f)(i)(A) shall be paid in a
      single lump sum payment no later than 60 days after the Employment Termination
      Date or the expiration of the Employment Term, as applicable; provided, however,
      that if the Employment Termination Date or expiration of the Employment Term,
      as
      applicable, occurs during 2007, such single lump sum payment shall not be paid
      during 2007 but shall be paid between January 1, 2008 and January 10,
      2008.

    


    (iii)           In
      the event that it is determined that any payment (other than the Gross-Up
      payment provided for in this Paragraph 7(f)(iii)) or distribution by
      Employer or any of its Affiliates to or for the benefit of Executive, whether
      paid or payable or distributed or distributable pursuant to the terms of this
      Agreement or otherwise pursuant to or by reason of any other agreement, policy,
      plan, program or arrangement, including without limitation any stock option
      or
      similar right, or the lapse or termination of any restriction on or the vesting
      or exercisability of any of the foregoing (a “Payment”), would be subject to the
      excise tax imposed by Section 4999 of the Code (or any successor provision
      thereto) by reason of being considered “contingent on a change in ownership or
      control” of Employer, within the meaning of Section 280G of the Code or any
      successor provision thereto (such tax being hereafter referred to as the “Excise
      Tax”), then Executive will be entitled to receive an additional payment or
      payments (a “Gross-Up Payment”).  The Gross-Up Payment will be in an
      amount such that, after payment by Executive of all taxes, including any Excise
      Tax imposed upon the Gross-Up Payment, Executive retains an amount of the
      Gross-Up Payment equal to the Excise Tax imposed upon the
      Payment.  For purposes of determining the amount of the Gross-Up
      Payment, Executive will be considered to pay (x) federal income taxes at
      the highest rate in effect in the year in which the Gross-Up Payment will be
      made and (y) state and local income taxes at the highest rate in effect in
      the state or locality in which the Gross-Up Payment would be subject to state
      or
      local tax, net of the maximum reduction in federal income tax that could be
      obtained from deduction of such state and local taxes.  The
      determination of whether an Excise Tax would be imposed, the amount of such
      Excise Tax, and the calculation of the amounts referred to in this
      Paragraph 7(f)(iii) will be made at the expense of Employer by Employer’s
      regular independent accounting firm (the “Accounting Firm”), which shall provide
      detailed supporting calculations.  Any determination by the Accounting
      Firm will be binding upon Employer and Executive.  The Gross-Up
      Payment will be paid to Executive as soon as administratively practicable
      following, but no later than the end of the calendar year in which falls the
      date on
      which
      Executive remits the related taxes.

    


    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

     

    (g)           Health
      Insurance.  In addition, if Executive’s employment with Employer
      or an Affiliate or successor of Employer is terminated or ends under the
      circumstances set forth in Paragraph 7(f), Executive will receive, in addition
      to any other payments due under this Agreement, the following benefit: if,
      at
      the time of the Employment Termination Date or the expiration of the Employment
      Term, as applicable, Executive participates in one or more health plans offered
      or made available by Employer and Executive is eligible for and elects to
      receive continued coverage under such plans in accordance with the Consolidated
      Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any successor law,
      Employer will reimburse Executive during 12-month period following the
      Employment Termination Date or the expiration of the Employment Term, as
      applicable, for the difference between the total amount of the monthly COBRA
      premiums for the same coverage as in effect on the Employment Termination Date
      or the expiration of the Employment Term, as applicable, that are actually
      paid
      by Executive for such continued health plan benefits and the total monthly
      amount of the same premiums charged to active senior executives of Employer
      for
      health insurance coverage.  Such reimbursement shall be made within
      the 90-day period following Executive’s payment of each monthly COBRA
      premium.  Provided, however, that Employer’s reimbursement obligation
      under this Paragraph 7(g) shall terminate upon the earlier of (i) the expiration
      of the time period described above or (ii) the date Executive becomes eligible
      for health insurance coverage under a subsequent employer’s plan without being
      subject to any preexisting-condition exclusion under that plan, which occurrence
      Executive shall promptly report to Employer.

    


    (h)           Exclusive
      Compensation and Benefits.  The compensation and benefits
      described in this Paragraph 7, along with the associated terms for payment,
      constitute all of Employer’s obligations to Executive with respect to the
      termination of Executive’s employment with Employer and/or its Affiliates.
      However, nothing in this Agreement is intended to limit any earned, vested
      benefits (other than any entitlement to severance or separation pay, if any)
      that Executive may have under the applicable provisions of any benefit plan
      of
      Employer in which Executive is participating at the time of the termination
      of
      employment.

    


    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

     

    (i)        
         Compliance
      with
      Code Section 409A.  If
      Employer determines that Executive is a “specified employee” on the date of
      Executive’s “separation from service,” as those terms are defined in and
      pursuant to Code Section 409A and related Treasury guidance thereunder, then,
      notwithstanding any provision of this Agreement to the contrary, no payment
      of
      compensation under this Agreement shall be made to Executive during the period
      lasting six months from the date of Executive’s separation unless Employer
      determines that there is no reasonable basis for believing that making such
      payment would cause Executive to suffer adverse tax consequences pursuant to
      Code Section 409A.  If any payment to Executive is delayed pursuant to
      the foregoing sentence, such payment instead shall be paid, without interest,
      on
      the first day of the month following the expiration of the six-month period
      referred to in the prior sentence.

    


    (j)      
           Payment after Executive’s
      Death.  In the event of Executive’s death after he becomes
      entitled to a payment or payments pursuant to this Paragraph 7, any remaining
      unpaid amounts shall be paid, at the
      time
      and in the manner such payments otherwise would have been paid to Executive,
      to
such person
      as Executive shall designate in a written notice to Employer (or, if no such
      person is designated, to his estate).

    


    (k)           Offset.  The
      Executive agrees that Employer may set off against, and Executive authorizes
      Employer to deduct from, any payments due to the Executive, or to his heirs,
      legal representatives, or successors, as a result of the termination of the
      Executive’s employment any amounts which may be due and owing to Employer or any
      of its Affiliates by the Executive, whether arising under this Agreement or
      otherwise; provided, however, that any such set off and deduction shall be
      made
      in a manner that complies with Section 409A of the Code and the regulations
      thereunder to the extent applicable.

    


    8.          
        Confidential Information.

    


    (a)            Executive
      acknowledges and agrees that (i) Employer and its Affiliates are engaged in
      a
      highly competitive business; (ii) Employer and its Affiliates have expended
      considerable time and resources to develop goodwill with their customers,
      vendors, and others, and to create, protect, and exploit Confidential
      Information; (iii) Employer must continue to prevent the dilution of its and
      its
      Affiliates’ goodwill and unauthorized use or disclosure of its Confidential
      Information to avoid irreparable harm to its legitimate business interests;
      (iv)
      in the oil and gas acquisition, exploration, development and production
      business, his participation in or direction of Employer’s or its Affiliates’
day-to-day operations and strategic planning are an integral part of Employer’s
      continued success and goodwill; (v) given his position and responsibilities,
      he
      necessarily will be creating Confidential Information that belongs to Employer
      and enhances Employer’s goodwill, and in carrying out his responsibilities he in
      turn will be relying on Employer’s goodwill and the disclosure by Employer to
      him of Confidential Information; (vi) he will have access to Confidential
      Information that could be used by any Competitor of Employer in a manner that
      would irreparably harm Employer’s competitive position in the marketplace and
      dilute its goodwill; and (vii) he necessarily would use or disclose Confidential
      Information if he were to engage in competition with Employer.

    


    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    (b)           Employer
      acknowledges and agrees that Executive must have and continue to have throughout
      his employment the benefits and use of its and its Affiliates’ goodwill and
      Confidential Information in order to properly carry out his
      responsibilities.  Employer accordingly promises upon execution and
      delivery of this Agreement to provide Executive immediate and continuing access
      to Confidential Information and to authorize him to engage in activities that
      will create new and additional Confidential Information.

    


    (c)           Employer
      and Executive thus acknowledge and agree that during Executive’s employment with
      Employer, and upon execution and delivery of this Agreement, he (i) has
      received, will receive, and will continue to receive Confidential Information
      that is unique, proprietary, and valuable to Employer and/or its Affiliates;
      (ii) has created and will continue to create Confidential Information that
      is
      unique, proprietary, and valuable to Employer and/or its Affiliates; and (iii)
      has benefited and will continue to benefit, including without limitation by
      way
      of increased earnings and earning capacity, from the goodwill Employer and
      its
      Affiliates have generated and from the Confidential Information.

    


    (d)           Accordingly,
      Executive acknowledges and agrees that at all times during his employment by
      Employer and/or any of its Affiliates and thereafter:

    


    (i)         
         all Confidential Information shall remain and be the sole and
      exclusive property of Employer and/or its Affiliates;

    


    (ii)        
         he will protect and safeguard all Confidential
      Information;

    


    (iii)           he
      will hold all Confidential Information in strictest confidence and not, directly
      or indirectly, disclose or divulge any Confidential Information to any person
      other than an officer, director, or employee of, or legal counsel for, Employer
      or its Affiliates, to the extent necessary for the proper performance of his
      responsibilities unless authorized to do so by Employer or compelled to do
      so by
      law or valid legal process;

    


    (iv)           if
      he believes he is compelled by law or valid legal process to disclose or divulge
      any Confidential Information, he will notify Employer in writing sufficiently
      in
      advance of any such disclosure to allow Employer the opportunity to defend,
      limit, or otherwise protect its interests against such disclosure;

    


    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

     

    (v)           at
      the end of his employment with Employer for any reason or at the request of
      Employer at any time, he will return to Employer all Confidential Information
      and all copies thereof, in whatever tangible form or medium, including
      electronic; and

    


    (vi)           absent
      the promises and representations of Executive in this Paragraph 8 and in
      Paragraph 9, Employer would require him immediately to return any tangible
      Confidential Information in his possession, would not provide Executive with
      new
      and additional Confidential Information, would not authorize Executive to engage
      in activities that will create new and additional Confidential Information,
      and
      would not enter or have entered into this Agreement.

    


    9.        
          Nondisparagement and Nonsolicitation
      Obligations.  In consideration of Employer’s promises to provide
      Executive with Confidential Information and to authorize him to engage in
      activities that will create new and additional Confidential Information upon
      execution and delivery of this Agreement, and the other promises and
      undertakings of Employer in this Agreement, Executive agrees that, while he
      is
      employed by Employer and/or any of its Affiliates and for a 2-year period
      following the end of that employment for any reason, he shall not engage in
      any
      of the following activities (the “Restricted Activities”):

    


    (a)           He
      will not directly or indirectly disparage Employer or its Affiliates, any
      products, services, or operations of Employer or its Affiliates, or any of
      the
      former, current, or future officers, directors, or employees of Employer or
      its
      Affiliates;

    


    (b)           He
      will not, whether on his own behalf or on behalf of any other individual,
      partnership, firm, corporation or business organization, either directly or
      indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce,
      persuade, or entice, any person who is then employed by or otherwise engaged
      to
      perform services for Employer or its Affiliates to leave that employment or
      cease performing those services; and

    


    (c)           He
      will not, whether on his own behalf or on behalf of any other individual,
      partnership, firm, corporation or business organization, either directly or
      indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce,
      persuade, or entice, any person who is then a customer, supplier, or vendor
      of
      Employer or any of its Affiliates to cease being a customer, supplier, or vendor
      of Employer or any of its Affiliates or to divert all or any part of such
      person’s or entity’s business from Employer or any of its
      Affiliates.

    


    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

     

    Executive
      acknowledges and agrees that the restrictions contained in this Paragraph 9
      are
      ancillary to an otherwise enforceable agreement, including without limitation
      the mutual promises and undertakings set forth in Paragraph 8; that Employer’s
      promises and undertakings set forth in Paragraph 8 and Executive’s position and
      responsibilities with Employer give rise to Employer’s interest in restricting
      Executive’s post-employment activities; that such restrictions are designed to
      enforce Executive’s promises and undertakings set forth in this Paragraph 9 and
      his common-law obligations and duties owed to Employer and its Affiliates;
      that
      the restrictions are reasonable and necessary, are valid and enforceable under
      Texas law, and do not impose a greater restraint than necessary to protect
      Employer’s goodwill, Confidential Information, and other legitimate business
      interests; that he will immediately notify Employer in writing should he believe
      or be advised that the restrictions are not, or likely are not, valid or
      enforceable under Texas law or the law of any other state that he contends
      or is
      advised is applicable; that the mutual promises and undertakings of Employer
      and
      Executive under Paragraphs 8 and 9 are not contingent on the duration of
      Executive’s employment with Employer; that absent the promises and
      representations made by Executive in this Paragraph 9 and Paragraph 8, Employer
      would require him to return any Confidential Information in his possession,
      would not provide Executive with new and additional Confidential Information,
      would not authorize Executive to engage in activities that will create new
      and
      additional Confidential Information, and would not enter or have entered into
      this Agreement; and that his obligations under Paragraphs 8 and 9 supplement,
      rather than supplant, his common-law duties of confidentiality and loyalty
      owed
      to Employer.

    


    10.           Intellectual
      Property.

    


    (a)           In
      consideration of Employer’s promises and undertakings in this Agreement,
      Executive agrees that all Work Product will be disclosed promptly by Executive
      to Employer, shall be the sole and exclusive property of Employer, and is hereby
      assigned to Employer, regardless of whether (i) such Work Product was conceived,
      made, developed or worked on during regular hours of his employment or his
      time
      away from his employment, (ii) the Work Product was made at the suggestion
      of
      Employer; or (iii) the Work Product was reduced to drawing, written description,
      documentation, models or other tangible form.  Without limiting the
      foregoing, Executive acknowledges that all original works of authorship that
      are
      made by Executive, solely or jointly with others, within the scope of his
      employment and that are protectable by copyright are “works made for hire,” as
      that term is defined in the United States Copyright Act (17 U.S.C., Section
      101), and are therefore owned by Employer from the time of
      creation.

    


    (b)           Executive
      agrees to assign, transfer, and set over, and Executive does hereby assign,
      transfer, and set over to Employer, all of his right, title and interest in
      and
      to all Work Product, without the necessity of any further compensation, and
      agrees that Employer is entitled to obtain and hold in its own name all patents,
      copyrights, and other rights in respect of all Work
      Product.  Executive agrees to (i) cooperate with Employer during and
      after his employment with Employer in obtaining patents or copyrights or other
      intellectual-property protection for all Work Product; (ii) execute,
      acknowledge, seal, and deliver all documents tendered by Employer to evidence
      its ownership thereof throughout the world; and (iii) cooperate with Employer
      in
      obtaining, defending, and enforcing its rights therein.

    


    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

    


    (c)           Executive
      represents that there are no other contracts to assign inventions or other
      intellectual property that are now in existence between Executive and any other
      person or entity.  Executive further represents that he has no other
      employment or undertakings that might restrict or impair his performance of
      this
      Agreement.  Executive will not in connection with his employment by
      Employer, use or disclose to Employer any confidential, trade secret, or other
      proprietary information of any previous employer or other person that Executive
      is not lawfully entitled to disclose.

    


    11.           Reformation.  If
      the provisions of Paragraphs 8, 9, or 10 are ever deemed by a court to exceed
      the limitations permitted by applicable law, Executive and Employer agree that
      such provisions shall be, and are, automatically reformed to the maximum
      limitations permitted by such law.

    


    12.           Indemnification
      and Insurance.  Employer shall indemnify Executive to the fullest
      extent permitted by the laws of the State of Delaware.  In addition,
      Employer shall indemnify Executive in accordance with Employer’s certificate of
      incorporation and bylaws and pursuant to Employer’s standard indemnification
      agreement, and shall provide him with coverage under any directors’ and
      officers’ liability insurance policies, in each case on terms not less favorable
      than those provided to any of its other directors and officers as in effect
      from
      time to time.

    


    13.           Assistance
      in Litigation.  During the Employment Term and thereafter for the
      lifetime of Executive, Executive shall, upon reasonable notice, furnish such
      information and proper assistance to Employer or any of its Affiliates as may
      reasonably be required by Employer in connection with any litigation,
      investigations, arbitrations, and/or any other fact-finding or adjudicative
      proceedings involving Employer or any of its Affiliates.  This
      obligation shall include, without limitation, to promptly upon request meet
      with
      counsel for Employer or any of its Affiliates and provide truthful testimony
      at
      the request of Employer or as otherwise required by law or valid legal
      process.   Following the Employment Term, Employer shall
      reimburse Executive for all reasonable out-of-pocket expenses incurred by
      Executive and approved in advance by Employer in rendering such assistance
      (such
      as travel, parking, and meals but not attorney’s fees), but shall have no
      obligation to compensate Executive for his time in providing information and
      assistance in accordance with this Paragraph 13, provided that such
      reimbursement shall be made on or before the last day of the calendar year
      following the calendar year in which the expense is incurred.

    


    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    


    14.           No
      Obligation to Pay.  With regard to any payment due to Executive
      under this Agreement, it shall not be a breach of any provision of this
      Agreement for Employer to fail to make such payment to Executive if (i) Employer
      is legally prohibited from making the payment; (ii) Employer would be
      legally obligated to recover the payment if it was made; or (iii) Executive
      would be legally obligated to repay the payment if it was made.

    


    15.           
      Deductions and Withholdings.  With respect to any payment to be
      made to the Executive, Employer shall deduct, where applicable, any amounts
      authorized by Employee, and shall withhold and report all amounts required
      to be
      withheld and reported by applicable law.

    


    16.           Notices.  All
      notices, requests, demands, and other communications required or permitted
      to be
      given or made by either party shall be in writing and shall be deemed to have
      been duly given or made (a) when delivered personally, or (b) when deposited
      in
      the United States mail, first class registered or certified mail, postage
      prepaid, return receipt requested, to the party for which intended at the
      following addresses (or at such other addresses as shall be specified by the
      parties by like notice, except that notices of change of address shall be
      effective only upon receipt):

    


    (i)       
          If to Employer, at:

    


    Rosetta
      Resources Inc.

    Attn:
      General Counsel

    717
      Texas

    Suite
      2800

    Houston,
      Texas 77002

    


    (ii)           If
      to Executive, at Executive’s then-current home address on file with
      Employer.

    


    17.           Injunctive
      Relief.  Executive acknowledges and agrees that Employer would not
      have an adequate remedy at law and would be irreparably harmed in the event
      that
      any of the provisions of Paragraphs 8, 9, and 10 were not performed in
      accordance with their specific terms or were otherwise
      breached.  Accordingly, Executive agrees that Employer shall be
      entitled to equitable relief, including preliminary and permanent injunctions
      and specific performance, in the event Executive breaches or threatens to breach
      any of the provisions of such Paragraphs, without the necessity of posting
      any
      bond or proving special damages or irreparable injury.  Such remedies
      shall not be deemed to be the exclusive remedies for a breach or threatened
      breach of this Agreement by Executive, but shall be in addition to all other
      remedies available to Employer at law or equity.

    


    18.           Mitigation.  Executive
      shall not be required to mitigate the amount of any payment provided for in
      this
      Agreement by seeking other employment or otherwise, nor shall the amount of
      any
      payment provided for in this Agreement be reduced by any compensation earned
      by
      Executive as the result of employment by another employer after the date of
      termination of Executive’s employment with Employer, or otherwise.

    


    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

    


    19.           Binding
      Effect; No Assignment by Executive; No Third Party Benefit.  This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective heirs, legal representatives, successors, and assigns;
      provided, however, that Executive shall not assign or otherwise transfer this
      Agreement or any of his rights or obligations under this
      Agreement.  Employer is authorized to assign or otherwise transfer
      this Agreement or any of its rights or obligations under this Agreement to
      an
      Affiliate of Employer.  Executive shall not have any right to pledge,
      hypothecate, anticipate, or in any way create a lien upon any payments or other
      benefits provided under this Agreement; and no benefits payable under this
      Agreement shall be assignable in anticipation of payment either by voluntary
      or
      involuntary acts, or by operation of law, except by will or pursuant to the
      laws
      of descent and distribution.  Nothing in this Agreement, express or
      implied, is intended to or shall confer upon any person other than the parties,
      and their respective heirs, legal representatives, successors, and permitted
      assigns, any rights, benefits, or remedies of any nature whatsoever under or
      by
      reason of this Agreement.

    


    20.           Assumption
      by Successor.  Employer shall ensure that any successor or
      assignee (whether direct or indirect, by purchase, merger, consolidation, or
      otherwise) to all or substantially all the business and/or assets of the
      Employer or the oil
      and gas acquisition, exploration, development and production business of the
      Employer, either by operation of law or written agreement, assumes the
      obligations of this Agreement (the “Assumption Obligation”).  If
      Employer fails to fulfill the Assumption Obligation, such failure shall be
      considered Good Reason; provided, however, that the compensation to which
      Executive would be entitled to upon a termination for Good Reason pursuant
      to
      Paragraph 7(e) shall be the sole remedy of Executive for any failure by Employer
      to fulfill the Assumption Obligation.  As used in this Agreement,
“Employer” shall include any successor or assignee (whether direct or indirect,
      by purchase, merger, consolidation, or otherwise) to all or substantially all
      the business and/or assets of Employer or the oil
      and gas exploration, development and production business of the Employer
      that executes and delivers the agreement provided for in this Paragraph 20
      or
      that otherwise becomes obligated under this Agreement by operation of
      law.

    


    21.           Legal
      Fees and Expenses.  Employer will reimburse the Executive for all
      reasonable legal fees and expenses incurred by the Executive in connection
      with
      the preparation, review, and negotiation of this Agreement on or after January
      1, 2007 and prior to its execution, provided that any such reimbursement shall
      be made within the same calendar year in which falls the Second Amendment
      Date.

    


    22.           Governing
      Law; Venue.  This Agreement and the employment of Executive shall
      be governed by the laws of the State of Texas except for its laws with respect
      to conflict of laws.  The exclusive forum for any lawsuit arising from
      or related to Executive’s employment or this Agreement shall be a state or
      federal court in Harris County, Texas.  This provision does not
      prevent Employer from removing to an appropriate federal court any action
      brought in state court.  EXECUTIVE HEREBY CONSENTS TO, AND
      WAIVES ANY OBJECTIONS TO, REMOVAL TO FEDERAL COURT BY EMPLOYER OF ANY ACTION
      BROUGHT AGAINST IT BY EXECUTIVE.

    


    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

    


    23.           JURY
      TRIAL WAIVER.  IN THE EVENT THAT ANY DISPUTE ARISING FROM OR
      RELATED TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT WITH EMPLOYER RESULTS IN A
      LAWSUIT, BOTH EMPLOYER AND EXECUTIVE MUTUALLY WAIVE ANY RIGHT THEY MAY OTHERWISE
      HAVE FOR A JURY TO DECIDE THE ISSUES IN THE LAWSUIT, REGARDLESS OF THE PARTY
      OR
      PARTIES ASSERTING CLAIMS IN THE LAWSUIT OR THE NATURE OF SUCH
      CLAIMS.  EMPLOYER AND EXECUTIVE IRREVOCABLY AGREE THAT ALL ISSUES IN
      SUCH A LAWSUIT SHALL BE DECIDED BY A JUDGE RATHER THAN A
      JURY.

    


    24.           Entire
      Agreement.  This Agreement contains the entire agreement between
      the parties concerning the subject matter hereof and supersedes all prior
      agreements and understandings, written and oral, between the parties with
      respect to the subject matter of this Agreement.

    


    25.           Modification;
      Waiver.  No person, other than pursuant to a resolution duly
      adopted by the members of the Board, shall have authority on behalf of Employer
      to agree to modify, amend, or waive any provision of this
      Agreement.  Further, this Agreement may not be changed orally, but
      only by a written agreement signed by the party against whom any waiver, change,
      amendment, modification or discharge is sought to be
      enforced.  Executive acknowledges and agrees that no breach by
      Employer of this Agreement or failure to enforce or insist on its rights under
      this Agreement shall constitute a waiver or abandonment of any such rights
      or
      defense to enforcement of such rights.

    


    26.           Construction.  This
      Agreement is to be construed as a whole, according to its fair meaning, and
      not
      strictly for or against any of the parties.

    


    27.           Severability.  If
      any provision of this Agreement shall be determined by a court to be invalid
      or
      unenforceable, the remaining provisions of this Agreement shall not be affected
      thereby, shall remain in full force and effect, and shall be enforceable to
      the
      fullest extent permitted by applicable law.

    


    28.           Counterparts.  This
      Agreement may be executed by the parties in any number of counterparts, each
      of
      which shall be deemed an original, but all of which shall constitute one and
      the
      same agreement.

    


    
      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

    


    IN
      WITNESS WHEREOF, Employer has caused this Agreement to be executed on its behalf
      by its duly authorized officer, and Executive has executed this Agreement,
      effective as of the Second Amendment Date first set forth above.

    


    
      	
              EMPLOYER

            	 	
              EXECUTIVE

            
	 	 	 
	
              ROSETTA
                RESOURCES INC.

            	 	
              MICHAEL
                J. ROSINSKI

            
	 	 	 
	 	 	 
	 	 	 
	
              By:

            	
              /s/
                Charles F. Chambers

            	 	
              /s/
                Michael J. Rosinski

            
	 	 	 
	
              CHARLES
                F. CHAMBERS

            	 	 
	
              PRESIDENT
                & CHIEF EXECUTIVE OFFICER

            	 	 


    

     

     

    24