**EXHIBIT 10.8**

 

**AMENDED AND RESTATED**

**EXECUTIVE EMPLOYMENT AGREEMENT**

 

AGREEMENT by and between ***POGO PRODUCING COMPANY***,a Delaware corporation (the “Company”) and **PaulG. Van Wagenen** (the “Executive”), dated as of the 1st day ofFebruary, 2005.

 

The Board of Directors ofthe Company (the “Board”), has determined that it is in the best interests ofthe Company and its shareholders to assure that the Company will have thecontinued dedication of the Executive, and to provide the Executive withcompensation and benefits arrangements which are competitive with those ofother corporations and which ensure that the compensation and benefitsexpectations of the Executive will be satisfied.  The Board also believes it is imperative todiminish the inevitable distraction of the Executive by virtue of the personaluncertainties and risks created by a pending or threatened Change of Controland to encourage the Executive’s full attention and dedication to the Companycurrently and in the event of any threatened or pending Change of Control, andto insure the continuation of favorable compensation and benefits upon a Changeof Control.  Therefore, in order toaccomplish these objectives, the Board has caused the Company to enter into thisAgreement, which shall supersede both the Employment Agreement between Companyand Executive dated as of February 1, 2003 and extended and renewed mostrecently as of February 1, 2004.

 

NOW, THEREFORE, IT ISHEREBY AGREED AS FOLLOWS;

 

# 1.                                       Certain Definitions.

 

## (a)                                  The“Effective Date” shall mean the date of this Agreement.

##  

## (b)                                 The“Employment Period” shall mean the period commencing on the Effective Date andending on August 1, 2006.  On August 1,2005 and on each annual anniversary of such date (the “Renewal Date”), theEmployment Period shall be reviewed, to determine whether, in the discretion ofthe Company, it should be extended for one additional year so as to terminatetwo years from such Renewal Date.  Adetermination by the Company to extend the term for one year shall be effectiveonly if, prior to the Renewal Date, the Company shall give notice to theExecutive that the Employment Period shall be so extended.  Upon a Change of Control the EmploymentPeriod shall be extended to the fifth anniversary of the Change of Control.

##  

# 2.                                       Change of Control.  For thepurpose of this Agreement, a “Change of Control” shall mean:

#  

## (a)                                  Theacquisition by any Person of beneficial ownership of Outstanding Company VotingSecurities (including any such acquisition of beneficial ownership deemed tohave occurred pursuant to Rule 13d-5 under the Exchange Act) if, immediatelythereafter, such Person is the beneficial owner of 20% or more of either (i)the then Outstanding Company Common Stock or (ii) the then Outstanding CompanyVoting Securities, unless such acquisition is made (a) directly from theCompany in a transaction approved by a majority of the members

 

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## of the Incumbent Board, (b) by any employee benefitplan (or related trust) sponsored or maintained by the Company or anycorporation controlled by the Company, or (c) by a parent corporation resultingfrom a Business Combination if, following such Business Combination, theconditions specified in clauses (i), (ii) and (iii) of subsection (c) ofthis Section 2 are satisfied;

##  

## (b)                                 Individualswho, as of the date hereof, constitute the Board (the “Incumbent Board”) ceasefor any reason to constitute at least a majority of the Board; provided,however, that any individual becoming a director subsequent to the date hereofwhose election, or nomination for election by the Company’s shareholders, wasapproved by a vote of at least a majority of the directors then comprising theIncumbent Board shall be considered as though such individual were a member of theIncumbent Board, except that any such individual shall not be considered amember of the Incumbent Board if his or her initial assumption of office occursas a result of either an actual or threatened election contest (as such term isused in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) orother actual or threatened solicitation of proxies or consents by or on behalfof a Person other than the Board;

##  

## (c)                                  Approvalby the shareholders of the Company of a Business Combination (or if there is nosuch approval by shareholders, consummation of such Business Combination)unless, immediately following such Business Combination, (i) more than 60% of,respectively, the then outstanding shares of common stock of the parentcorporation resulting from such Business Combination and the combined votingpower of the then outstanding voting securities of such parent corporationentitled to vote generally in the election of directors will be (or is) thenbeneficially owned, directly or indirectly, by all or substantially all of theindividuals and entities who were the beneficial owners, respectively, of theOutstanding Company Common Stock and Outstanding Company Voting Securitiesimmediately prior to such Business Combination in substantially the sameproportions as their ownership immediately prior to such Business Combinationof the Outstanding Company Common Stock and Outstanding Company VotingSecurities, as the case may be, (ii) no Person (other than any employee benefitplan (or related trust) of the Company or any parent corporation resulting fromsuch Business Combination) beneficially owns, directly or indirectly, 20% ormore, respectively, of the then outstanding shares of common stock of theparent corporation resulting from such Business Combination or the combinedvoting power of the then outstanding voting securities of such corporationentitled to vote generally in the election of directors and (iii) at least amajority of the members of the board of directors of the parent corporation resultingfrom such Business Combination were members of the Incumbent Board immediatelyprior to the consummation of such Business Combination; or

##  

## (d)                                 Approvalby the shareholders of the Company of (i) a complete liquidation or dissolutionof the Company or (ii) a Major Asset Disposition (or if there is no suchapproval by shareholders, consummation of such Major Asset Disposition) unless,immediately following such Major Asset Disposition, (A) individuals andentities that were beneficial owners of the Outstanding Company Common Stockand the Outstanding Company Voting Securities immediately prior to such MajorAsset Disposition beneficially own, directly or indirectly, more than 60% of,respectively, the then outstanding shares of common stock and the combinedvoting power of the then outstanding shares of voting stock of the Company (ifit continues to exist) and of the Acquiring Entity; (B) no Person, other thanany employee benefit plan (or related trust) of the Company or such entitybeneficially owns, directly or indirectly, 20% or more of, respectively, thethen outstanding shares of common stock and the combined voting power of the 

 

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## then outstanding voting securities of the Company (ifit continues to exist) and of the Acquiring Entity and (C) at least a majorityof the members of the board of directors of the Company (if it continues toexist) and of the Acquiring Entity were members of the Incumbent Board at thetime of the execution of the initial agreement or action of the Board providingfor such Major Asset Disposition.

##  

For purposes of the foregoing definition,

 

### (1)                                  theterm “Person” means an individual, entity or group;

###  

### (2)                                  theterm “group” is used as it is defined for purposes of Section 13(d)(3) ofthe Securities Exchange Act of 1934 (the “Exchange Act”);

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### (3)                                  theterms “beneficial owner”, “beneficially ownership” and “beneficially own” areused as defined for purposes of Rule 13d-3 under the Exchange Act;

###  

### (4)                                  theterm “Business Combination” means (x) a merger or consolidation involving theCompany or its stock or (y) an acquisition by the Company, directly or throughone or more subsidiaries, of another entity or its stock or assets;

###  

### (5)                                  theterm “Outstanding Company Common Stock” shall mean the outstanding shares ofCommon Stock, par value $1 per share, of the Company;

###  

### (6)                                  theterm “Outstanding Company Voting Securities” means outstanding votingsecurities of the Company entitled to vote generally in the election ofdirectors; and any specified percentage or portion of the Outstanding CompanyVoting Securities (or of other voting stock or voting securities) shall bedetermined based on the relative combined voting power of such securities;

###  

### (7)                                  theterm “parent corporation resulting from a Business Combination” means theCompany if its stock is not acquired or converted in the Business Combinationand otherwise means the entity which as a result of such Business Combinationowns the Company or all or substantially all of the Company’s assets eitherdirectly or through one or more subsidiaries;

###  

### (8)                                  theterm “Major Asset Disposition” means the sale or other disposition in onetransaction or a series of related transactions of 60% or more of the assets ofthe Company and its subsidiaries on a consolidated basis; and any specifiedpercentage or portion of the assets of the Company shall be based on fairmarket value, as determined by a majority of the members of the IncumbentBoard; and

###  

### (9)                                  “AcquiringEntity” means the entity that acquires the largest portion of the assets soldor otherwise disposed of in a Major Asset Disposition (or the entity, if any,that owns a majority of the outstanding voting stock of such acquiring entityentitled to vote generally in the election of directors or members of acomparable governing body).

 

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# 3.                                       Employment Agreement.  TheCompany hereby agrees to continue the Executive in its employ in accordancewith the terms and provisions of this Agreement, for the Employment Period.

#  

# 4.                                       Terms of Employment.

#  

## (a)                                  Positionand Duties.

##  

#### (i)                                     Duringthe Employment Period, (A) the Executive’s position (including status,offices, titles and reporting requirements), authority, duties andresponsibilities shall be (x) prior to a Change of Control, at leastcommensurate in all material respects with the most significant of those held,exercised and assigned at any time during the 90-day period immediatelypreceding the later of the Effective Date or the most recent Renewal Date and (y)upon and after a Change of Control, the Executive’s position shall be at leastcommensurate in all respects (disregarding a change or changes that are in theaggregate de minimis) with the most significant of those held, exercised andassigned at any time during the 180-day period immediately preceding theApplicable Date and (B) the Executive’s services shall be performed at thelocation where the Executive was employed immediately preceding the ApplicableDate or any office which is the headquarters of the Company and is less than 25miles from such location.  For purposesof this Agreement, “Applicable Date” shall mean, at any time of determination,the latest to have occurred of the Effective Date, the most recent RenewalDate, or any date on which a Change of Control has occurred.

####  

#### (ii)                                  Duringthe Employment Period, and excluding any periods of vacation and sick leave towhich the Executive is entitled, the Executive agrees to devote reasonableattention and time during normal business hours to the business and affairs ofthe Company.  During the EmploymentPeriod it shall not be a violation of this Agreement for the Executive to(A) serve on corporate, civic or charitable boards or committees,(B) deliver lectures, fulfill speaking engagements or teach at educationalinstitutions and (C) manage personal investments, so long as suchactivities do not significantly interfere with the performance of the Executive’sresponsibilities as an employee of the Company in accordance with thisAgreement; provided Executive may not serve on the board of a publicly tradedfor profit corporation or similar body of a publicly traded for profit businessorganized in other than corporate form without the consent of the Nominatingand Corporate Governance Committee of the Board of Directors of theCompany.  It is expressly understood andagreed that to the extent that any such activities have been conducted by theExecutive prior to the Applicable Date, the continued conduct of such activities(or the conduct of activities similar in nature and scope thereto) subsequentto the Applicable Date shall not thereafter be deemed to interfere with theperformance of the Executive’s responsibilities to the Company.

 

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## (b)                                 Compensation.

##  

#### (i)                                     BaseSalary.  During the EmploymentPeriod, the Executive shall receive an annual base salary (“Annual Base Salary”),which shall be paid on a monthly basis, at least equal to twelve times thehighest monthly base salary paid or payable to the Executive by the Company andits affiliated companies in respect of the twelve-month period immediatelypreceding the month in which the Applicable Date occurs.  During the Employment Period, the Annual BaseSalary shall be reviewed at least annually and may be increased at any time andfrom time to time as shall be substantially consistent with increases in basesalary generally awarded in the ordinary course of business to other executivesof the Company and its affiliated companies. Following a Change of Control, Annual Base Salary shall be increased notless frequently than annually in an amount not less than the percentageincrease, if any, in the United States Department of Labor’s U.S. ConsumerPrice Index – All Items (All Urban Consumers) from the last day of the lastfull month preceding the Change of Control to the last month preceding the dateof increase.** **Anyincrease in Annual Base Salary shall not serve to limit or reduce any otherobligation to the Executive under this Agreement.  As used in this Agreement, the term “affiliatedcompanies” shall include any company controlled by, controlling or under commoncontrol with the Company.

####  

#### (ii)                                  AnnualBonus.  In addition to Annual BaseSalary, the Executive may be awarded at the discretion of the Company for anyfiscal year ending during the Employment Period, a bonus.

####  

#### (iii)                               Incentive, Savingsand Retirement Plans.  During theEmployment Period, the Executive shall be entitled to participate in allincentive, savings and retirement plans, practices, policies and programsapplicable generally to other executives of the Company and its affiliatedcompanies.  Such plans, practices,policies and programs shall provide the Executive with incentive opportunities(measured with respect to both regular and special incentive opportunities, tothe extent, if any, that such distinction is applicable), savings opportunitiesand retirement benefit opportunities, in each case, equal to the most favorableof those provided by the Company and its affiliated companies for the Executiveunder such plans, practices, policies and programs as in effect at any timeduring the 90-day period immediately preceding the Applicable Date.

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#### (iv)                              ExcessRetirement Benefit Payments.  Inaddition to the benefits available pursuant to Section 4(b)(iii):

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##### (A)                              Uponthe termination of the Executive’s services with the Company for any reasonother than death, the Company shall pay to the Executive a monthly benefit forlife (or the lump-sum equivalent thereof with the consent of the Executive’sspouse), in an amount equal to the monthly annuity payment that

 

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##### the Executive would be entitled to receive under the Retirement Planfor Pogo Producing Company (or any successor thereto) (the “Retirement Plan”)if the limitations on retirement benefits under Sections 415 and 401(a)(17) ofthe Internal Revenue Code of 1986, as amended (the “Code”), were notapplicable, less the monthly annuity payment actually payable to the Executiveunder the Retirement Plan.  Such monthlybenefit will commence on the same date that the Executive’s “RetirementAllowance” (as defined in the Retirement Plan) commences under the RetirementPlan, will be calculated using the actuarial assumptions utilized under theRetirement Plan and will be calculated as if cash bonus payments to theExecutive were includible as “considered compensation” under the RetirementPlan; and

#####  

##### (B)                                Uponthe death of the Executive while in the service of the Company or aftertermination of Service with the Company, the Company shall pay to the Executive’sspouse, if she survives the Executive and is eligible for a “Spouse’s Allowance”(as defined in the Retirement Plan) under the Retirement Plan, a monthlylifetime benefit (or the lump-sum equivalent thereof), in an amount equal tothe monthly installment that she would be entitled to receive as a Spouse’sAllowance under the Retirement Plan if the limitations on retirement benefitsprovided in Sections 415 and 401(a)(17) of the Code were not applicable, lessthe monthly annuity payment actually payable to her as a Spouse’s Allowanceunder the Retirement Plan. Such monthly benefit shall commence on first day ofthe month following the Executive’s death, will be calculated using theactuarial assumptions utilized under the Retirement Plan and will be calculatedas if cash bonus payments to the Executive were includible as “consideredcompensation” under the Retirement Plan.

#####  

#### (v)                                 WelfareBenefit Plans.  During the EmploymentPeriod, the Executive and/or the Executive’s family, as the case may be, shallbe eligible for participation in and shall receive all benefits under welfarebenefit plans, practices, policies and programs provided by the Company and itsaffiliated companies (including, without limitation, medical, prescription,dental, disability, salary continuance, employee life, group life, accidentaldeath and travel accident insurance plans and programs) to the extentapplicable generally to other executives of the Company and its affiliatedcompanies.  Such plans, practices,policies and programs shall provide the Executive with benefits which areequal, in the aggregate, to the most favorable of such plans, practices,policies and programs in effect for the Executive at any time during the 90-dayperiod immediately preceding the Applicable Date.

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#### (vi)                              Expenses.  During the Employment Period, the Executiveshall be entitled to receive prompt reimbursement for all reasonable

 

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#### expenses incurred by the Executive in accordance with the mostfavorable policies, practices and procedures of the Company and its affiliatedcompanies in effect for the Executive at any time during the 90-day periodimmediately preceding the Applicable Date.

####  

#### (vii)                           Fringe Benefits.  During the Employment Period, the Executiveshall be entitled to fringe benefits in accordance with the most favorableplans, practices, programs and policies of the Company and its affiliatedcompanies in effect for the Executive at any time during the 90-day periodimmediately preceding the Applicable Date.

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#### (viii)                        Office and Support Staff.  During the Employment Period, the Executiveshall be entitled to an office or offices of a size and with furnishings andother appointments, and to personal secretarial and other assistance, at leastequal to the most favorable of the foregoing provided to the Executive by theCompany and its affiliated companies at any time during the 90-day periodimmediately preceding the Applicable Date.

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#### (ix)                                Vacation.  During the Employment Period, the Executiveshall be entitled to paid vacation in accordance with the most favorable plans,policies, programs and practices of the Company and its affiliated companies asin effect for the Executive at any time during the 90-day period immediatelypreceding the Applicable Date.

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#### (x)                                   EquityAwards.  In addition to Annual BaseSalary and annual bonus, the Executive may be awarded an equity award at thediscretion of the Company for any fiscal year ending during the EmploymentPeriod.

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# 5.                                       Termination of Employment.

#  

## (a)                                  Deathor Disability.  The Executive’semployment shall terminate automatically upon the Executive’s death during theEmployment Period.  If the Companydetermines in good faith that the Disability of the Executive has occurredduring the Employment Period (pursuant to the definition of Disability setforth below), it may give to the Executive written notice in accordance with Section 12(c)of this Agreement of its intention to terminate the Executive’semployment.  In such event, the Executive’semployment with the Company shall terminate effective on the 30th day afterreceipt of such notice by the Executive (the “Disability Effective Date”),provided that, within the 30 days after such receipt, the Executive shall not havereturned to full-time performance of the Executive’s duties.  For purposes of this Agreement, “Disability”shall mean the absence of the Executive from the Executive’s duties with theCompany on a full-time basis for 180 consecutive business days as a result ofincapacity due to mental or physical illness which is determined to be totaland permanent by a physician selected by the Company or its insurers andacceptable to the Executive or the Executive’s legal representative (suchagreement as to acceptability not to be withheld unreasonably).

##  

## (b)                                 Cause.  The Company may terminate the Executive’semployment during the Employment Period for Cause.  For purposes of this Agreement, “Cause” shallmean (i) a

 

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## material violation by the Executive of the Executive’sobligations under Section 4(a) of this Agreement (other than as a resultof incapacity due to physical or mental illness) which is willful anddeliberate on the Executive’s part, which is committed in bad faith or withoutreasonable belief that such violation is in the best interests of the Companyand which is not remedied in a reasonable period of time after receipt ofwritten notice from the Company specifying such violation or (ii) the finaland non-appealable conviction by a court of competent jurisdiction of theExecutive of a felony involving moral turpitude.

##  

## (c)                                  GoodReason; Window Period; Other Terminations. The Executive’s employment may be terminated (i) during theEmployment Period by the Executive for Good Reason, (ii) during the WindowPeriod by the Executive without any reason or (iii) by Executive other than (A)for Good Reason or (B) during a Window Period.

##  

For purposes of thisAgreement, the “Window Period” shall mean the 30-day period immediatelyfollowing the first anniversary of the date a Change of Control occurs.  The Company shall inform the Executivepromptly following the occurrence of a Change of Control of the date on whichthe Change of Control occurred, with such supporting detail as may be necessaryto establish such date.  If, in thereasonable judgment of Executive, there exists uncertainty as to the date onwhich a Change of Control occurred and in the absence of agreement between theCompany and the Executive as to such date, the Executive shall be entitled, forpurposes of determining the Window Period, to treat the Change of Control ashaving occurred on such date as the Executive reasonably determines, it beingthe intention of the parties that Executive not be deprived of substantiverights hereunder by reason of uncertainties or disputes regarding the date onwhich a Change of Control occurred. Anything in this Agreement to the contrary notwithstanding, if a Changeof Control occurs and if the Executive’s employment with the Company isterminated prior to the date on which the Change of Control occurs, and if itis reasonably demonstrated by the Executive that such termination of employmentor cessation of status as an officer (i) was at the request of a third partywho has taken steps reasonably calculated to effect the Change of Control or(ii) otherwise arose in connection with or anticipation of the Change ofControl, then for all purposes of this Agreement the “date a Change of Controloccurs” shall mean the date immediately prior to the date of such terminationof employment or cessation of status as an officer.

 

For purposes of thisAgreement, “Good Reason” shall mean

 

#### (i)                                     theassignment to the Executive of any duties inconsistent with the Executive’sposition (including status, offices, titles and reporting requirements),authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in adiminution in such position, authority, duties or responsibilities excludingfor this purpose an insubstantial or inadvertent action which is remedied bythe Company promptly after receipt of notice thereof given by the Executive;

####  

#### (ii)                                  anyfailure by the Company to comply with any of the provisions of Section 4(b)of this Agreement, other than an insubstantial or inadvertent failure which isremedied by the Company promptly after receipt of notice thereof given by theExecutive;

 

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#### (iii)                               the Company’s requiringthe Executive to be based at any office or location other than that describedin Section 4(a)(i)(B) hereof;

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#### (iv)                              anypurported termination by the Company of the Executive’s employment otherwisethan as expressly permitted by this Agreement;

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#### (v)                                 anyfailure by the Company to comply with and satisfy Section 11(c) of thisAgreement; or

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#### (vi)                              followinga Change of Control, any failure to provide both an annual bonus (in cashand/or property) and equity award no less favorable to Executive than the singlehighest bonus and equity award provided to the Executive during the 24 monthsimmediately prior to a Change of Control, appropriately increased to reflectannual salary increases provided for in Section 4(b)(i) and/or additionalpositions or responsibilities.

####  

An extension of theEmployment Period pursuant to Section 1(b) will not, in itself, impair orrender invalid or defective a Notice of Termination given in connection withtermination of employment for Good Reason based on whole or in part on facts orcircumstances occurring prior to the extension.

 

## (d)                                 Noticeof Termination.  Any termination bythe Company for Cause, or by the Executive without any reason during the WindowPeriod or for Good Reason, shall be communicated by Notice of Termination tothe other party hereto given in accordance with Section 12(c) of thisAgreement.  For purposes of thisAgreement, a “Notice of Termination” means a written notice which(i) indicates the specific termination provision in this Agreement reliedupon, (ii) to the extent applicable, sets forth in reasonable detail thefacts and circumstances claimed to provide a basis for termination of theExecutive’s employment under the provision so indicated and (iii) if theDate of Termination (as defined below) is other than the date of receipt ofsuch notice, specifies the termination date (which date shall be not more thanfifteen days after the giving of such notice). The failure by the Executive or the Company to set forth in the Noticeof Termination any fact or circumstance which contributes to a showing of GoodReason or Cause shall not waive any right of the Executive or the Companyhereunder or preclude the Executive or the Company from asserting such fact orcircumstance in enforcing the Executive’s or the Company’s right hereunder.

##  

## (e)                                  Dateof Termination.  “Date of Termination”means (i) if the Executive’s employment is terminated by the Company forCause, or by the Executive during the Window Period or for Good Reason, thedate of receipt of the Notice of Termination or any later date specifiedtherein, as the case may be, (ii) if the Executive’s employment isterminated by the Company other than for Cause or Disability, the Date ofTermination shall be the date on which the Company notifies the Executive of suchtermination, (iii) if the Executive’s employment is terminated by reasonof death or Disability, the Date of Termination shall be the date of death ofthe Executive or the Disability Effective Date, as the case may be, and (iv) ifthe Executive’s employment is terminated by the Executive other than for GoodReason or during a Window Period, the date of the receipt of the Notice ofTermination or any later date specified therein.

 

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# 6.                                       Obligations of the Company upon Termination.

#  

## (a)                                  Priorto a Change of Control:  Good Reason;Other than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate theExecutive’s employment other than for Cause or Disability or the Executiveshall terminate employment for Good Reason:

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#### (i)                                     theCompany shall pay to the Executive in a lump-sum in cash within 30 days afterthe Date of Termination the aggregate of the following amounts:

####  

###### A.                                   thesum of (1) the Executive’s Annual Base Salary through the Date ofTermination to the extent not theretofore paid and (2) any compensationpreviously deferred by the Executive (together with any accrued interest orearnings thereon) and any accrued vacation pay, in each case to the extent nottheretofore paid (the sum of the amounts described in clauses (1) and (2) shallbe hereinafter referred to as the “Accrued Obligations”); and

######  

###### B.                                     theamount (such amount shall be hereinafter referred to as the “Severance Amount”)equal to the product of:

######  

(1)                                  three,and

 

(2)                                  thesum of

 

(x)                                   theExecutive’s Annual Base Salary, and

 

(y)                                 anybonus described in Section 4(b)(ii) paid or payable in respect of the mostrecently completed fiscal year of the Company or, if no such bonus has beenpaid or is payable in respect of such year, any bonus described in Section 4(b)(ii)paid or payable in respect of the next preceding fiscal year; and, providedfurther, that such amount shall be reduced by the present value (determined asprovided in Section 280G(d)(4) of the Code) of any other amount ofseverance relating to salary or bonus continuation to be received by theExecutive upon termination of employment of the Executive under any severanceplan, severance policy or severance arrangement of the Company; and

 

###### C.                                     aseparate lump-sum supplemental retirement benefit equal to the differencebetween (1) the actuarial equivalent (utilizing for this purpose theactuarial assumptions utilized with respect to the Retirement Plan

 

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###### during the 90-day period immediately preceding the Applicable Date) ofthe benefit payable under the Retirement Plan and/or Section 4(b)(iv)hereof which the Executive would receive if the Executive’s employmentcontinued at the compensation level provided for in Sections 4(b)(i) and4(b)(ii) of this Agreement for the 3-year period following termination ofemployment, assuming for this purpose that all accrued benefits are fullyvested and that benefit accrual formulas are no less advantageous to the Executivethan those in effect during the 90-day period immediately preceding theApplicable Date, and (2) the actuarial equivalent (utilizing for thispurpose the actuarial assumptions utilized with respect to the Retirement Planduring the 90-day period immediately preceding the Applicable Date) of theExecutive’s actual benefit (paid or payable), if any, under the Retirement Planand Section 4(b)(iv) (the amount of such benefit shall be hereinafterreferred to as the “Supplemental Retirement Amount”);

######  

###### D.                                    aseparate sum equal to the amount of any unvested and unpaid cash bonusesawarded to the Executive;

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#### (ii)                                  forthe remainder of the Employment Period, or such longer period as any plan,program, practice or policy may provide, the Company shall continue benefits tothe Executive and/or the Executive’s family at least equal to those which wouldhave been provided to them in accordance with the plans, programs, practicesand policies described in Section 4(b)(v) of this Agreement if theExecutive’s employment had not been terminated in accordance with the mostfavorable plans, practices, programs or policies of the Company and itsaffiliated companies as in effect and applicable generally to other executivesand their families during the 90-day period immediately preceding theApplicable Date, provided, however, that if the Executive becomes reemployedwith another employer and is eligible to receive medical or other welfarebenefits under another employer provided plan, the medical and other welfarebenefits described herein shall be secondary to those provided under such otherplan during such applicable period of eligibility (such continuation of suchbenefits for the applicable period herein set forth shall be hereinafterreferred to as “Welfare Benefit Continuation”). For purposes of determining eligibility of the Executive for retireebenefits pursuant to such plans, practices, programs and policies, theExecutive shall be considered to have remained employed until the end of theEmployment Period and to have retired on the last day of such period;

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#### (iii)                               to the extent nottheretofore paid or provided, the Company shall timely pay or provide to theExecutive and/or the Executive’s family

 

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#### any other amounts or benefits required to be paid or provided or whichthe Executive and/or the Executive’s family is eligible to receive pursuant tothis Agreement and under any plan, program, policy or practice or contract oragreement of the Company and its affiliated companies as in effect andapplicable generally to other executives and their families during the 90-dayperiod immediately preceding the Applicable Date (such other amounts andbenefits shall be hereinafter referred to as the “Other Benefits”);

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#### (iv)                              effectiveas of the Date of Termination, immediate vesting and exercisability of, andtermination of any restrictions on sale or transfer (other than any suchrestriction arising by operation of law) with respect to, each and every stockoption, restricted stock award, restricted stock unit award and otherequity-based award and performance award that is outstanding as of the Date ofTermination;

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#### (v)                                 theCompany shall timely pay to the Executive and/or his spouse any benefits duepursuant to the Retirement Plan and/or Section 4(b)(iv).

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## (b)                                 Followinga Change of Control:  During the WindowPeriod; Good Reason; Other than for Cause, Death or Disability.  If, during the Employment Period, the Companyshall terminate the Executive’s employment other than for Cause or Disabilityfollowing a Change of Control, the Executive shall terminate employment forGood Reason following a Change of Control or the Executive shall terminateemployment without any reason during the Window Period, then the Company shallpay or provide to the Executive all the amounts and benefits set forth in Section 6(a)above; provided however, that:

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#### (i)                                     insteadof the Severance Amount payable pursuant to Section 6(a)(i)(B) above, thecompany shall pay to the Executive a Severance Amount equal to the product of:

####  

(1)                                  five,and

 

(2)                                  thesum of

 

(x)                                   theExecutive’s Annual Base Salary, and

 

(y)                                 anybonus described in Section 4(b)(ii) paid or payable in respect of the mostrecently completed fiscal year of the Company or, if no such bonus has beenpaid or is payable in respect of such year, any bonus described in Section 4(b)(ii)paid or payable in respect of the next preceding fiscal year; and

 

#### (ii)                                  insteadof the Supplemental Retirement Amount payable pursuant to Section 6(a)(i)(C)above, the Company shall pay to the Executive a separate lump-sum supplementalretirement benefit equal to the difference between (1) the actuarialequivalent (utilizing for this

 

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#### purpose the actuarial assumptions utilized with respect to theRetirement Plan during the 90-day period immediately preceding the ApplicableDate) of the benefit payable under the Retirement Plan and Section 4(b)(iv)which the Executive would receive if the Executive’s employment continued atthe compensation level provided for in Sections 4(b)(i) and 4(b)(ii) ofthis Agreement for the 5-year period following termination of employment,assuming for this purpose that all accrued benefits are fully vested and thatbenefit accrual formulas are no less advantageous to the Executive than thosein effect during the 90-day period immediately preceding the Applicable Date,and (2) the actuarial equivalent (utilizing for this purpose the actuarialassumptions utilized with respect to the Retirement Plan during the 90-dayperiod immediately preceding the Applicable Date) of the Executive’s actualbenefit (paid or payable), if any, under the Retirement Plan and Section 4(b)(iv);

####  

#### (iii)                               in addition to theamounts payable pursuant to Section 6(a)(i)(A),  6(b)(i) and (ii), the Company shall pay tothe Executive a separate lump-sum amount equal to the value of the equityawards that the Executive would have received during the five years followingtermination, determined in accordance with Exhibit A attached hereto; and

####  

#### (iv)                              theCompany shall timely pay to the Executive and/or his spouse any benefits duepursuant to the Retirement Plan and/or Section 4(b)(iv).

####  

## (c)                                  Death.  If the Executive’s employment is terminatedby reason of the Executive’s death during the Employment Period, this Agreementshall terminate without further obligations to the Executive’s legalrepresentatives under this Agreement, other than for (i) payment ofAccrued Obligations (which shall be paid to the Executive’s estate orbeneficiary, as applicable, in a lump-sum in cash within 30 days of the Date ofTermination) and the timely payment or provision of the Welfare BenefitContinuation and Other Benefits, (ii) payment to the Executive’s estate orbeneficiary, as applicable, in a lump-sum in cash within 30 days of the Date ofTermination of an amount equal to the sum of the Severance Amount and theSupplemental Retirement Amount and (iii) timely payment to the Executiveand/or his spouse of any benefits due pursuant to the Retirement Plan and/or Section 4(b)(iv).  Upon the death of the Executive occurringafter the termination of the Executive’s employment, the Company shall timelypay to the Executive’s spouse benefits due, if any, pursuant to the RetirementPlan and Section 4(b)(iv).

##  

## (d)                                 Disability.  If the Executive’s employment is terminatedby reason of the Executive’s Disability during the Employment Period, thisAgreement shall terminate without further obligations to the Executive, otherthan for (i) payment of Accrued Obligations (which shall be paid to theExecutive in a lump-sum in cash within 30 days of the Date of Termination) andthe timely payment or provision of the Welfare Benefit Continuation and OtherBenefits (excluding, in each case, Disability Benefits (as defined below)),(ii) payment to the Executive in a lump-sum in cash within 30 days of theDate of Termination of an amount equal to the greater of (A) the sum ofthe Severance Amount and the Supplemental Retirement Amount and (B) thepresent value (determined as provided in Section 280G(d)(4) of the Code)of any cash amount to be received by the Executive as a disability benefitpursuant to the terms of any long term disability plan, policy or arrangementof the Company and its affiliated companies, but not

 

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## including any proceeds of disability insurancecovering the Executive to the extent paid for on a contributory basis by theExecutive (which shall be paid in any event as an Other Benefit) (the benefitsincluded in this clause (B) shall be hereinafter referred to as the “DisabilityBenefits”) and (iii) timely payment to the Executive and/or his spouse of anybenefits due pursuant to the Retirement Plan and/or Section 4(b)(iv)..

##  

## (e)                                  Cause;By Executive Other than for Good Reason And Other Than During a Window Period.  If the Executive’s employment shall beterminated for Cause during the Employment Period, this Agreement shallterminate without further obligations to the Executive other than theobligation to pay to the Executive Annual Base Salary through the Date ofTermination plus the amount of any compensation previously deferred by theExecutive, in each case to the extent theretofore unpaid and the obligation tomake timely payment to the Executive and/or his spouse of any benefits duepursuant to the Retirement Plan and/or Section 4(b)(iv).  If the Executive terminates employment duringthe Employment Period, excluding a termination either for Good Reason orwithout any reason during the Window Period, this Agreement shall terminatewithout further obligations to the Executive, other than for AccruedObligations, the timely payment or provision of Other Benefits and the timelypayment to the Executive and/or his spouse of any benefits due pursuant to theRetirement Plan and/or Section 4(b)(iv). In such case, all Accrued Obligations shall be paid to the Executive ina lump-sum in cash within 30 days of the Date of Termination.

##  

# 7.                                       Non-exclusivity of Rights.  Except asprovided in Section 6(a)(ii), 6(c) and 6(d) of this Agreement, nothing inthis Agreement shall prevent or limit the Executive’s continuing or futureparticipation in any plan, program, policy or practice provided by the Companyor any of its affiliated companies and for which the Executive may qualify, norshall anything herein limit or otherwise affect such rights as the Executivemay have under any contract or agreement with the Company or any of itsaffiliated companies.  Amounts which arevested benefits or which the Executive is otherwise entitled to receive under anyplan, policy, practice or program of or any contract or agreement with theCompany or any of its affiliated companies at or subsequent to the Date ofTermination shall be payable in accordance with such plan, policy, practice orprogram or contract or agreement except as explicitly modified by thisAgreement.

#  

# 8.                                       Full Settlement; Resolution of Disputes.

#  

## (a)                                  TheCompany’s obligation to make payments provided for in this Agreement andotherwise to perform its obligations hereunder shall not be affected by any set-off,counterclaim, recoupment, defense or other claim, right or action which theCompany may have against the Executive or others.  In no event shall the Executive be obligatedto seek other employment or take any other action by way of mitigation of theamounts payable to the Executive under any of the provisions of this Agreementand, except as provided in Section 6(a)(ii), 6(c) and 6(d) of thisAgreement, such amounts shall not be reduced whether or not the Executiveobtains other employment.  If there isany contest by the Company concerning the Payments or benefits to be providedto the Executive or his spouse hereunder whether through litigation,arbitration or mediation, or with respect to the validity or enforceability of,or liability under, any provision of this Agreement or any guarantee ofperformance thereof, and the Executive or his spouse is the prevailing party,the Company agrees to pay promptly upon conclusion of the contest all legalfees and expenses which the Executive may reasonably have incurred.

 

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## (b)                                 Ifthere shall be any dispute between the Company and the Executive (i) inthe event of any termination of the Executive’s employment by the Company,whether such termination was for Cause, or (ii) in the event of anytermination of employment by the Executive, whether Good Reason existed, then,unless and until there is a final, nonappealable judgment by a court ofcompetent jurisdiction declaring that such termination was for Cause or thatGood Reason did not exist, the Company shall pay all amounts, and provide allbenefits, to the Executive and/or the Executive’s family or otherbeneficiaries, as the case may be, that the Company would be required to pay orprovide pursuant to Section 6(a) or 6(b) hereof as though such terminationwere by the Company without Cause or by the Executive with Good Reason;provided, however, that the Company shall not be required to pay any disputedamounts pursuant to this paragraph except upon receipt of an undertaking (whichneed not be secured) by or on behalf of the Executive to repay all such amountsto which the Executive is ultimately adjudged by such court not to be entitled.

##  

# 9.                                       Certain Additional Payments by the Company.

#  

## (a)                                  Anythingin this Agreement to the contrary notwithstanding, in the event it shall bedetermined that any payment or distribution by the Company to or for thebenefit of the Executive (whether paid or payable or distributed ordistributable pursuant to the terms of this Agreement or otherwise, butdetermined without regard to any additional payments required under this Section 9)(a “Payment”) would be subject to the excise tax imposed by Section 4999of the Code or any interest or penalties are incurred by the Executive withrespect to such excise tax (such excise tax, together with any such interestand penalties, are hereinafter collectively referred to as the “Excise Tax”),then the Executive shall be entitled to receive an additional payment (a “Gross-UpPayment”) in an amount such that after payment by the Executive of all taxes(including any interest or penalties imposed with respect to such taxes),including, without limitation, any income taxes (and any interest and penaltiesimposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,the Executive retains an amount of the Gross-Up Payment equal to the Excise Taximposed upon the Payments.

##  

## (b)                                 Subjectto the provisions of Section 9(c), all determinations required to be madeunder this Section 9, including whether and when Gross-Up Payment isrequired and the amount of such Gross-Up Payment and the assumptions to beutilized in arriving at such determination, shall be made by the Company’s thencurrent independent public accountants (the “Accounting Firm”) which shallprovide detailed supporting calculations both to the Company and the Executivewithin 15 business days of the receipt of notice from the Executive that therehas been a Payment, or such earlier time as is requested by the Company.  In the event that the Accounting Firm isserving as accountant or auditor for the individual, entity or group effectingthe Change of Control, the Executive shall appoint another nationallyrecognized accounting firm to make the determinations required hereunder (whichaccounting firm shall then be referred to as the Accounting Firmhereunder).  All fees and expenses of theAccounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuantto this Section 9, shall be paid by the Company to the Executive withinfive days of the receipt of the Accounting Firm’s determination.  The Accounting Firm shall furnish theExecutive with a written opinion that reporting the Excise Tax, or the failureto report the Excise Tax, as applicable, on the Executive’s applicable federalincome tax return in accordance with the determination made by the AccountingFirm pursuant to this Section 9(b) should not result in the imposition ofa negligence or similar penalty.  Anydetermination by the Accounting Firm shall

 

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## be binding upon the Company and the Executive.  As a result of the uncertainty in theapplication of Section 4999 of the Code at the time of the initialdetermination by the Accounting Firm hereunder, it is possible that Gross-UpPayments which will not have been made by the Company should have been made (“Underpayment”),consistent with the calculations required to be made hereunder.  In the event that the Company exhausts itsremedies pursuant to Section 9(c) and the Executive thereafter is requiredto make a payment of any Excise Tax, the Accounting Firm shall determine theamount of the Underpayment that has occurred and any such Underpayment shall bepromptly paid by the Company to or for the benefit of the Executive.

##  

## (c)                                  TheExecutive shall notify the Company in writing of any claims by the InternalRevenue Service that, if successful, would require the payment by the Companyof the Gross-Up Payment.  Suchnotification shall be given as soon as practicable but no later than tenbusiness days after the Executive is informed in writing of such claim andshall apprise the Company of the nature of such claim and the date on whichsuch claim is requested to be paid.  TheExecutive shall not pay such claim prior to the expiration of the 30-day periodfollowing the date on which it gives such notice to the Company (or suchshorter period ending on the date that any payment of taxes with respect tosuch claim is due).  If the Companynotifies the Executive in writing prior to the expiration of such period thatit desires to contest such claim, the Executive shall:

##  

#### (i)                                     givethe Company any information reasonably requested by the Company relating tosuch claim,

####  

#### (ii)                                  takesuch action in connection with contesting such claim as the Company shallreasonably request in writing from time to time, including, without limitation,accepting legal representation with respect to such claim by an attorneyreasonably selected by the Company and reasonably acceptable to the Executive,

####  

#### (iii)                               cooperate with theCompany in good faith in order effectively to contest such claim, and

####  

#### (iv)                              permitthe Company to participate in any proceedings relating to such claim;

####  

provided, however, that the Company shall bear and pay directly allcosts and expenses (including additional interest and penalties) incurred inconnection with such contest and shall indemnify and hold the Executiveharmless, on an after-tax basis, for any Excise Tax or income tax (includinginterest and penalties with respect thereto) imposed as a result of suchrepresentation and payment of costs and expenses.  Without limitation on the foregoingprovisions of this Section 9(c), the Company shall control all proceedingstaken in connection with such contest and, at its sole option, may pursue orforego any and all administrative appeals, proceedings, hearings andconferences with the taxing authority in respect of such claim and may, at itssole option, either direct the Executive to pay the tax claimed and sue for arefund or contest the claim in any permissible manner, and the Executive agreesto prosecute such contest to a determination before any administrativetribunal, in a court of initial jurisdiction and in one or more appellatecourts, as the Company shall determine; provided, however, that if the Companydirects the Executive to pay such claim and sue for a refund, the Company shall

 

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advance the amount of such payment to the Executive, on aninterest-free basis and shall indemnify and hold the Executive harmless, on anafter-tax basis, from any Excise Tax or income tax (including interest orpenalties with respect thereto) imposed with respect to such advance or withrespect to any imputed income with respect to such advance; and furtherprovided that any extension of the statute of limitations relating to paymentof taxes for the taxable year of the Executive with respect to which suchcontested amount is claimed to be due is limited solely to such contestedamount.  Furthermore, the Company’scontrol of the contest shall be limited to issues with respect to which aGross-Up Payment would be payable hereunder and the Executive shall be entitledto settle or contest, as the case may be, any other issue raised by theInternal Revenue Service or any other taxing authority.

 

## (d)                                 If,after the receipt by the Executive of an amount advanced by the Companypursuant to Section (c), the Executive becomes entitled to receive anyrefund with respect to such claim, the Executive shall (subject to the Company’scomplying with the requirements of Section 9(c)) promptly pay to theCompany the amount of such refund (together with any interest paid or creditedthereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by theCompany pursuant to Section 9(c), a determination is made that theExecutive shall not be entitled to any refund with respect to such claim andthe Company does not notify the Executive in writing of its intent to contestsuch denial of refund prior to the expiration of 30 days after suchdetermination, then such advance shall be forgiven and shall not be required tobe repaid and the amount of such advance shall be offset, to the extentthereof, the amount of Gross-Up Payment required to be paid.

##  

# 10.                                 Confidential Information.  Exceptfor mental impressions retained by the Executive, the Executive shall hold in afiduciary capacity for the benefit of the Company all secret or confidentialinformation, knowledge or data relating to the Company or any of its affiliatedcompanies, and their respective businesses, which shall have been obtained bythe Executive during the Executive’s employment by the Company or any of itsaffiliated companies and which shall not be or become public knowledge (otherthan by acts by the Executive or representatives of the Executive in violationof this Agreement).  Except for mentalimpressions of confidential information retained by the Executive and utilizedin the ordinary course of business by the Executive in any subsequentemployment, after termination of the Executive’s employment with the Company,the Executive shall not, without the prior written consent of the Company or asmay otherwise be required by law or legal process, communicate or divulge anysuch information, knowledge or data to anyone other than the Company and thosedesignated by it.  In no event shall anasserted violation of the provisions of this Section 10 constitute a basisfor deferring or withholding any amounts otherwise payable to the Executiveunder this Agreement.

#  

# 11.                                 Successors.

#  

## (a)                                  ThisAgreement is personal to the Executive and without the prior written consent ofthe Company shall not be assignable by the Executive otherwise than by will orthe laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by theExecutive’s legal representatives.

##  

## (b)                                 ThisAgreement shall inure to the benefit of and be binding upon the Company and itssuccessors and assigns.

 

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## (c)                                  TheCompany will require any successor (whether direct or indirect, by purchase,merger, consolidation or otherwise) to all or substantially all of the businessand/or assets of the Company to assume expressly and agree to perform thisAgreement in the same manner and to the same extent that the Company would berequired to perform it if no such succession had taken place.  As used in this Agreement, “Company” shallmean the Company as hereinbefore defined and any successor to its businessand/or assets as aforesaid which assumes and agrees to perform this Agreementby operation of law, or otherwise.  If aBusiness Combination is consummated that would have resulted in a Change ofControl but for the satisfaction of the conditions specified in clauses (i),(ii) and (iii) of Section 2(c) and if the parent corporation resultingfrom the Business Combination is other than the Company (hereinafter a “NewParent”), then, as a condition to consummation of this Business Combination,the New Parent shall be considered a successor for purposes of this Section 11.

##  

# 12.                                 Miscellaneous.

#  

## (a)                                  ThisAgreement shall be an unfunded obligation of the Company.

##  

## (b)                                 ThisAgreement shall be governed by and construed in accordance with the laws of theState of Texas, without reference to principles of conflict of laws.  The captions of this Agreement are not partof the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modifiedotherwise than by a written agreement executed by the parties hereto or theirrespective successors and legal representatives.

##  

## (c)                                  Allnotices and other communications hereunder shall be in writing and shall begiven by hand delivery to the other party or by registered or certified mail,return receipt requested, postage prepaid, addressed as follows:

##  

If to the Executive:

 

Paul G. Van Wagenen

P.O. Box 2504

Houston, Texas 77252-2504

 

If to the Company:

 

Pogo Producing Company

P.O. Box 2504

Houston, Texas 77252-2504

Attention: Chief Administrative Officer

 

orto such other address as either party shall have furnished to the other inwriting in accordance herewith.  Noticeand communications shall be effective when actually received by the addressee.

 

## (d)                                 Theinvalidity or unenforceability of any provision of this Agreement shall notaffect the validity or enforceability of any other provision of this Agreement.

 

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## (e)                                  TheCompany may withhold from any amounts payable under this Agreement suchFederal, state or local taxes as shall be required to be withheld pursuant toany applicable law or regulation.

##  

## (f)                                    TheExecutive’s or the Company’s failure to insist upon strict compliance with anyprovision hereof or any other provision of this Agreement or the failure toassert any right the Executive or the Company may have hereunder, including,without limitation, the right of the Executive to terminate employment for GoodReason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not bedeemed to be a waiver of such provision or right or any other provision orright of this Agreement.

##  

## (g)                                 ThisAgreement supersedes the Employment Agreement between Company and the Executivedated as of February 1, 2003 and extended and renewed most recently as of February 1,2004, which shall no longer be of any force or effect.

 

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IN WITNESS WHEREOF, theExecutive has hereunto set the Executive’s hand and, pursuant to theauthorization from its Board of Directors, the Company has caused thesepresents to be executed in its name on its behalf, all as of the day and yearfirst above written.

 

 
|   |                         |                |
|--------|------------------------------|---------------------|
|   | Paul  G. Van Wagenen         |
|   |                         |
|   |                         |
|   | ***POGO PRODUCING COMPANY*** |
|   | *** ***                 |
|   |                         |
|   | By                           |                |   |
|   |                         | John  O. McCoy, Jr. |   |
|        |                              |                     |  |  |

 

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**EXHIBIT A**

 

For purposes of Section 6(b), the value of the equity awards thatthe Executive would have received in the five years following termination shallbe determined by multiplying the Fair Market Value of the Executive’s mostrecent annual equity award on the Grant Date of such award, (or, if greater,the most recent annual equity award prior to a Change of Control) by a factorof four; provided, however, that if the Executive has been promoted and/or hasreceived a salary increase since the date of the last annual equity award thatwould otherwise be determinative under this provision, the value shall beadjusted upward to reflect the anticipated increase in grant size associatedwith the promotion and/or salary increase, and the value shall also be adjustedupward to reflect at least the minimum annual salary increases provided for in Section 4(b)(i).  Terms used in this Exhibit A and nototherwise defined in this Agreement shall be used with the same meanings as setforth in the Company’s 2004 Incentive Plan.

 

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