**EXHIBIT 10.17**

 

**AMENDED AND RESTATED**

**EXECUTIVE EMPLOYMENT AGREEMENT**

 

AGREEMENT by and between ***POGO PRODUCING COMPANY***,a Delaware corporation (the “Company”) and **BarryW. Acomb** (the “Executive”), dated as of the first day of February,2005.

 

The Board of Directors of the Company (the “Board”),has determined that it is in the best interests of the Company and itsshareholders to assure that the Company will have the continued dedication ofthe Executive, and to provide the Executive with compensation and benefitsarrangements which are competitive with those of other corporations and whichensure that the compensation and benefits expectations of the Executive will besatisfied.  The Board also believes it isimperative to diminish the inevitable distraction of the Executive by virtue ofthe personal uncertainties and risks created by a pending or threatened Changeof Control and to encourage the Executive’s full attention and dedication tothe Company currently and in the event of any threatened or pending Change ofControl, and to insure the continuation of favorable compensation and benefitsupon a Change of Control.  Therefore, inorder to accomplish these objectives, the Board has caused the Company to enterinto this Agreement, which shall supersede the Employment Agreement betweenCompany and Executive dated as of February 1, 2004.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS;

 

# 1.                                       Certain Definitions.

#  

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

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## (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; provided, however, that oneach annual anniversary of the Effective 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.

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# 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 of the IncumbentBoard, (b) by any employee benefit plan (or related trust) sponsored ormaintained by the Company or any corporation controlled by the Company, or (c)by a parent

 

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## corporation resulting from a Business Combination if, following suchBusiness Combination, the conditions specified in clauses (i), (ii) and (iii)of subsection (c) of this 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 ofthe Incumbent 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 parent corporation resultingfrom such Business Combination and the combined voting power of the thenoutstanding voting securities of such parent corporation entitled to votegenerally in the election of directors will be (or is) then beneficially owned,directly or indirectly, by all or substantially all of the individuals andentities who were the beneficial owners, respectively, of the OutstandingCompany Common Stock and Outstanding Company Voting Securities immediatelyprior to such Business Combination in substantially the same proportions astheir ownership immediately prior to such Business Combination of theOutstanding Company Common Stock and Outstanding Company Voting Securities, asthe case may be, (ii) no Person (other than any employee benefit plan (orrelated trust) of the Company or any parent corporation resulting from suchBusiness Combination) beneficially owns, directly or indirectly, 20% or more,respectively, of the then outstanding shares of common stock of the parentcorporation resulting from such Business Combination or the combined votingpower of the then outstanding voting securities of such corporation entitled tovote generally in the election of directors and (iii) at least a majority ofthe members of the board of directors of the parent corporation resulting fromsuch Business Combination were members of the Incumbent Board immediately priorto the consummation of such Business Combination; or

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## (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 than anyemployee 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 thethen outstanding voting securities of the Company (if it continues to exist)and of the Acquiring Entity and (C) at least a majority of the members of theboard of directors of the Company (if it continues to exist) and of theAcquiring Entity were members of the Incumbent Board at the time

 

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## of the execution of the initial agreement or action of the Boardproviding for such Major Asset Disposition.

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For purposes of the foregoing definition,

 

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

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##### (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;

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##### (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;

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

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##### (6)                                  theterm “Outstanding Company Voting Securities” means outstanding voting securitiesof the Company entitled to vote generally in the election of directors; and anyspecified percentage or portion of the Outstanding Company Voting Securities(or of other voting stock or voting securities) shall be determined based onthe relative combined voting power of such securities;

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##### (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;

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##### (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

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##### (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.

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# 4.                                       Terms of Employment.

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## (a)                                  Positionand Duties.

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### (i)                                     Duringthe Employment Period, (A) the Executive’s position (including status,offices, titles and reporting requirements), authority, duties andresponsibilities shall be at least commensurate in all material respects withthe most significant of those held, exercised and assigned at any time duringthe 90-day period immediately preceding the Applicable Date and (B) theExecutive’s services shall be performed at the location where the Executive wasemployed immediately preceding the Applicable Date or any office which is theheadquarters of the Company and is less than 25 miles from such location.  For purposes of this Agreement, “ApplicableDate” shall mean, at any time of determination, the latest to have occurred ofthe Effective Date, the most recent Renewal Date, or any date on which a Changeof 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 Employment Periodit 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 the Company.  It is expressly understood and agreed that tothe extent that any such activities have been conducted by the Executive priorto the Applicable Date, the continued conduct of such activities (or theconduct of activities similar in nature and scope thereto) subsequent to the ApplicableDate shall not thereafter be deemed to interfere with the performance of theExecutive’s responsibilities to the Company.

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## (b)                                 Compensation.

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### (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 orpayable to the Executive by the Company and its affiliated companies in respectof the twelve-month period immediately preceding the month in which theApplicable Date occurs.  During theEmployment Period, the Annual Base Salary shall be reviewed at least annuallyand may be increased at any time and from time to time as shall be substantiallyconsistent with increases in base salary generally awarded in the ordinarycourse of business to other executives of the Company and its affiliatedcompanies.  Any increase in Annual BaseSalary shall not serve to limit or reduce any other obligation to the Executiveunder this Agreement.  As used in thisAgreement, the term “affiliated companies” shall include any company controlledby, controlling or under common control with the Company.

 

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### (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)                              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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### (v)                                 Expenses.  During the Employment Period, the Executiveshall be entitled to receive prompt reimbursement for all reasonable expensesincurred by the Executive in accordance with the most favorable policies,practices and procedures of the Company and its affiliated companies in effectfor the Executive at any time during the 90-day period immediately precedingthe Applicable Date.

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### (vi)                              FringeBenefits.  During the EmploymentPeriod, the Executive shall be entitled to fringe benefits in accordance withthe most favorable plans, practices, programs and policies of the Company andits affiliated companies in effect for the Executive at any time during the 90-dayperiod immediately preceding the Applicable Date.

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### (vii)                           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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### (viii)                        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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# 5.                                       Termination of Employment.

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## (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 nothave returned 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 and acceptableto the Executive or the Executive’s legal representative (such agreement as toacceptability not to be withheld unreasonably).

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## (b)                                 Cause.  The Company may terminate the Executive’semployment during the Employment Period for Cause.  For purposes of this Agreement, “Cause” shallmean (i) a 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) thefinal and non-appealable conviction by a court of competent jurisdiction of theExecutive of a felony involving moral turpitude.

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## (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.

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For purposes of this Agreement, the “Window Period”shall mean the 180-day period immediately following the date a Change ofControl occurs.  The Company shall informthe Executive promptly following the occurrence of a Change of Control of thedate on which the Change of Control occurred, with such supporting detail asmay be necessary to establish such date. If, in the reasonable judgment of Executive, there exists uncertainty asto the date on which a Change of Control occurred and in the absence ofagreement between the Company and the Executive as to such date, the Executiveshall be entitled, for purposes of determining the Window Period, to treat theChange of Control as having occurred on such date as the Executive reasonablydetermines, it being the intention of the parties that Executive not bedeprived of substantive rights hereunder by reason of uncertainties or disputesregarding the date on which a Change of Control occurred.  Anything in this Agreement to the contrarynotwithstanding, if a Change of Control occurs and if the Executive’semployment with the Company is terminated prior to the date on which the Changeof Control occurs, and if it is reasonably demonstrated by the Executive thatsuch termination of employment or cessation of status as an officer (i) was atthe request of a third party who has taken steps reasonably calculated toeffect the Change of Control or (ii) otherwise arose in connection with oranticipation of the Change of Control, then for all purposes of this Agreementthe “date a Change of Control occurs” shall mean the date immediately prior tothe date of such termination of employment or cessation of status as anofficer.

 

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For purposes of this Agreement, “Good Reason” shallmean

 

### (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) ofthis 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;

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### (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; or

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

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## (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.

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## (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 ofsuch termination, (iii) if the Executive’s employment is terminated byreason of death or Disability, the Date of Termination shall be the date ofdeath of the Executive or the Disability Effective Date, as the case may be,and (iv) if the Executive’s employment is terminated by the Executive otherthan for Good Reason or during a Window Period, the date of the receipt of theNotice of Termination or any later date specified therein.

 

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# 6.                                       Obligations of the Company upon Termination.

#  

## (a)                                  GoodReason or during the Window Period; Other than for Cause, Death or Disability.  If, during the Employment Period, the Companyshall terminate the Executive’s employment other than for Cause or Disabilityor the Executive shall terminate employment either for Good Reason or withoutany reason during the Window Period:

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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:

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#### (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

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

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##### (1)                                  three,and

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##### (2)                                  thesum of

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(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 Internal Revenue Code of 1986, asamended (the “Code”)) of any other amount of severance relating to salary orbonus continuation to be received by the Executive upon termination ofemployment of the Executive under any severance plan, severance policy orseverance 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 Employees Retirement Planfor Pogo Producing Company (or any successor plan thereto) (the “RetirementPlan”) during the 90-day period immediately preceding the Applicable Date) ofthe benefit payable under the Retirement Plan which the Executive would receiveif the Executive’s employment continued at the compensation level provided forin Sections 4(b)(i) and 4(b)(ii) of this Agreement for the remainder ofthe

 

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#### Employment Period,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 (the amount ofsuch benefit shall be hereinafter referred to as the “Supplemental RetirementAmount”); and

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#### (D)                               aseparate sum equal to the amount of any unvested and unpaid cash bonuses awardedto 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)(iv) 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 any other amounts or benefits requiredto be paid or provided or which the Executive and/or the Executive’s family iseligible to receive pursuant to this Agreement and under any plan, program,policy or practice or contract or agreement of the Company and its affiliatedcompanies as in effect and applicable generally to other executives and theirfamilies during the 90-day period immediately preceding the Applicable Date(such other amounts and benefits shall be hereinafter referred to as the “OtherBenefits”); and

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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 any otherequity based award and performance award that is outstanding as of the Date ofTermination.

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## (b)                                 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, and (ii) payment

 

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## to the Executive’s estate or beneficiary, as applicable, in a lump-sumin cash within 30 days of the Date of Termination of an amount equal to the sumof the Severance Amount and the Supplemental Retirement Amount.

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## (c)                                  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)), and(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 including any proceeds ofdisability insurance covering the Executive to the extent paid for on acontributory basis by the Executive (which shall be paid in any event as anOther Benefit) (the benefits included in this clause (B) shall behereinafter referred to as the “Disability Benefits”).

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## (d)                                 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.  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.  In such case, all Accrued Obligations shallbe paid to the Executive in a lump-sum in cash within 30 days of the Date ofTermination.

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# 7.                                       Non-exclusivity of Rights.  Except asprovided in Section 6(a)(ii), 6(b) and 6(c) 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 underany plan, 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.

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# 8.                                       Full Settlement; Resolution of Disputes.

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## (a)                                  TheCompany’s obligation to make payments provided for in this Agreement andotherwise to perform its obligations hereunder shall not be affected by anyset-off, counterclaim, recoupment, defense or other claim, right or actionwhich the Company 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

 

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## Section 6(a)(ii) of this Agreement, such amounts shall not bereduced whether or not the Executive obtains other employment.  If there is any contest by the Companyconcerning the Payments or benefits to be provided to the Executive hereunderwhether through litigation, arbitration or mediation, or with respect to thevalidity or enforceability of, or liability under, any provision of thisAgreement or any guarantee of performance thereof, and the Executive is theprevailing party, the Company agrees to pay promptly upon conclusion of thecontest all legal fees and expenses which the Executive may reasonably haveincurred.

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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) hereof as though such termination were bythe Company without Cause or by the Executive with Good Reason; provided,however, that the Company shall not be required to pay any disputed amountspursuant to this paragraph except upon receipt of an undertaking (which neednot be secured) by or on behalf of the Executive to repay all such amounts towhich the Executive is ultimately adjudged by such court not to be entitled.

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# 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

 

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## 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 be binding upon the Company and theExecutive.  As a result of theuncertainty in the application of Section 4999 of the Code at the time ofthe initial determination by the Accounting Firm hereunder, it is possible thatGross-Up Payments which will not have been made by the Company should have beenmade (“Underpayment”), consistent with the calculations required to be madehereunder.  In the event that the Companyexhausts its remedies pursuant to Section 9(c) and the Executivethereafter is required to make a payment of any Excise Tax, the Accounting Firmshall determine the amount of the Underpayment that has occurred and any suchUnderpayment shall be promptly paid by the Company to or for the benefit of theExecutive.

##  

## (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 such shorterperiod ending on the date that any payment of taxes with respect to such claimis due).  If the Company notifies theExecutive in writing prior to the expiration of such period that it desires tocontest 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 paydirectly all costs and expenses (including additional interest and penalties)incurred in connection with such contest and shall indemnify and hold theExecutive harmless, on an after-tax basis, for any Excise Tax or income tax(including interest and penalties with respect thereto) imposed as a result ofsuch representation 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

 

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to a determination before any administrative tribunal,in a court of initial jurisdiction and in one or more appellate courts, as theCompany shall determine; provided, however, that if the Company directs theExecutive to pay such claim and sue for a refund, the Company shall advance theamount of such payment to the Executive, on an interest-free basis and shallindemnify and hold the Executive harmless, on an after-tax basis, from anyExcise Tax or income tax (including interest or penalties with respect thereto)imposed with respect to such advance or with respect to any imputed income withrespect to such advance; and further provided that any extension of the statuteof limitations relating to payment of taxes for the taxable year of theExecutive with respect to which such contested amount is claimed to be due islimited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited toissues with respect to which a Gross-Up Payment would be payable hereunder andthe Executive shall be entitled to settle or contest, as the case may be, anyother issue raised by the Internal Revenue Service or any other taxingauthority.

 

## (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:

##  

Ifto the Executive:

 

BarryW. Acomb

P. O.Box 2504

Houston,Texas 77252-2504

 

Ifto the Company:

 

PogoProducing Company

P.O.Box 2504

Houston,Texas 77252-2504

Attention:Chief Administrative Officer

 

or to such other addressas either party shall have furnished to the other in writing in accordanceherewith.  Notice and communications shallbe 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.

##  

## (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.

 

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## (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, 2004, which shall no longer be of any force oreffect.

##  

IN WITNESS WHEREOF, the Executive has hereunto set theExecutive’s hand and, pursuant to the authorization from its Board ofDirectors, the Company has caused these presents to be executed in its name onits behalf, all as of the day and year first above written.

 

 
|   |                         |                           |
|--------|------------------------------|--------------------------------|
|   | Barry W. Acomb               |
|   |                         |
|   |                         |
|   | ***POGO PRODUCING COMPANY*** |
|   |                         |
|   |                         |
|   | By                           |                           |   |
|   |                         |   John O. McCoy, Jr. |
|        |                              |                                |  |  |

 

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