Document:

Exhibit 10.3

 

POGO PRODUCING COMPANY

 

INDEMNIFICATION AGREEMENT

 

This Indemnification
Agreement (this “Agreement”), made and entered into as of the 25th day
of April, 2006, by and between Pogo Producing Company, a Delaware corporation
(the “Company”), and William L. Fisher (“Indemnitee”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS, Indemnitee is
currently serving or is about to begin serving as a director and/or officer of
the Company and/or in another Corporate Status, and Indemnitee is willing,
subject to, among other things, the Company’s execution and performance of this
Agreement, to continue in or assume such capacity or capacities; and

 

WHEREAS, the By-Laws of
the Company provide that the Company shall indemnify and advance expenses to
all directors and officers of the Company in the manner set forth therein and
to the fullest extent permitted by applicable law, and the Company’s Restated Certificate
of Incorporation provides for limitation of liability for directors; and

 

WHEREAS, in order to
induce Indemnitee to provide services as contemplated hereby, the Company has
deemed it to be in its best interests and the best interests of its
stockholders to enter into this Agreement with Indemnitee;

 

NOW, THEREFORE, in consideration of Indemnitee’s
agreement to provide services to the Company and/or certain of its affiliates
as contemplated hereby, the mutual agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto stipulate and agree as follows:

 

ARTICLE I

 

Certain Definitions

 

As used herein, the
following words and terms shall have the following respective meanings (whether
singular or plural):

 

“Change of Control” means
a change in control of the Company after the date Indemnitee acquired his
Corporate Status, which shall be deemed to have occurred upon the occurrence of
any of the following events:

 

(a)                                  The
acquisition by any Person of beneficial ownership of Outstanding Company Voting
Securities (including any such acquisition of beneficial ownership deemed to
have occurred pursuant to Rule 13d-5 under the Exchange Act) if,
immediately thereafter, such Person is the beneficial owner of 20% or more of
either (i) the then Outstanding Company Common Stock or (ii) the then
Outstanding Company Voting Securities, unless such acquisition

 

 

is made (A) directly from the Company in a
transaction approved by a majority of the members of the Incumbent Board, (B) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or (C) by a parent
corporation resulting from a Business Combination if, following such Business
Combination, the conditions specified in clauses (i), (ii) and (iii) of
subsection (c) of this definition are satisfied; or

 

(b)                                 Individuals
who, as of the date of this Agreement, constituted the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date of this Agreement whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, except that any such
individual shall not be considered a member of the Incumbent Board if his or
her initial assumption of office occurs as a result of an actual or threatened
election contest or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

 

(c)                                  Approval
by the shareholders of the Company of a Business Combination (or if there is no
such 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 resulting from such Business Combination and the combined voting
power of the then outstanding voting securities of such parent corporation
entitled to vote generally in the election of directors will be (or is) then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination in substantially the same
proportions as their ownership immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than any
employee benefit plan (or related trust) of the Company or any parent
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more, respectively, of the then outstanding
shares of common stock of the parent corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of directors and
(iii) at least a majority of the members of the board of directors of the
parent corporation resulting from such Business Combination were members of the
Incumbent Board immediately prior to the consummation of such Business
Combination; or

 

(d)                                 Approval
by the shareholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a Major Asset Disposition (or if there
is no such approval by shareholders, consummation of such Major Asset
Disposition) unless, immediately following such Major Asset Disposition, (A) individuals
and entities that were beneficial owners of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately prior to such
Major Asset Disposition beneficially own, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding shares of voting stock of the Company (if
it continues to exist) and of the Acquiring Entity; (B) no Person, other
than any employee benefit plan (or related trust) of

 

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the Company or such entity beneficially owns, directly
or indirectly, 20% or more of, respectively, the then outstanding shares of
common stock and the combined voting power of the then 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 the board of
directors of the Company (if it continues to exist) and of the Acquiring Entity
were members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such Major Asset Disposition.

 

For purposes of this
definition of Change of Control,

 

a                  the
term “Person” means an individual, entity or group;

 

b                 the
term “group” is used as it is defined for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934 (the “Exchange Act”);

 

c                  the
terms “beneficial owner”, “beneficially ownership” and “beneficially own” are
used as defined for purposes of Rule 13d-3 under the Exchange Act;

 

d                 the
term “Business Combination” means (x) a merger or consolidation involving the
Company or its stock or (y) an acquisition by the Company, directly or through
one or more subsidiaries, of another entity or its stock or assets;

 

e                  the
term “Outstanding Company Common Stock” shall mean the outstanding shares of
Common Stock, par value $1 per share, of the Company;

 

f                    the
term “Outstanding Company Voting Securities” means outstanding voting
securities of the Company entitled to vote generally in the election of
directors; and any specified percentage or portion of the Outstanding Company
Voting Securities (or of other voting stock or voting securities) shall be
determined based on the relative combined voting power of such securities;

 

g                 the
term “parent corporation resulting from a Business Combination” means the
Company if its stock is not acquired or converted in the Business Combination
and otherwise means the entity which as a result of such Business Combination
owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries;

 

h                 the
term “Major Asset Disposition” means the sale or other disposition in one
transaction or a series of related transactions of 60% or more of the
assets of the Company and its subsidiaries on a consolidated basis; and any
specified percentage or portion of the assets of the Company shall be based on
fair market value, as determined by a majority of the members of the Incumbent
Board; and

 

i                     “Acquiring
Entity” means the entity that acquires the largest portion of the assets sold
or otherwise disposed of in a Major Asset Disposition (or the entity, if any,
that owns a majority of the outstanding voting stock of such

 

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acquiring entity entitled to vote generally in the election of
directors or members of a comparable governing body).

 

“Corporate Status”
describes the status of Indemnitee as a director, officer,  employee, agent or fiduciary of the Company
or of any other company, partnership, limited liability company, association,
joint venture, trust, employee benefit plan or other enterprise that Indemnitee
is or was serving at the request of the Company.

 

“Court” means the Court
of Chancery of the State of Delaware or any other court of competent
jurisdiction.

 

“DGCL” means the Delaware
General Corporation Law.

 

“Expenses” shall include
all attorneys’ fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.

 

“Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in matters of
corporate law and neither currently is, nor in the five years previous to its
selection or appointment has been, retained to represent (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the rights of Indemnitee under this Agreement or
of other indemnitees under similar indemnification agreements) or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder.

 

“Matter” is a claim, a
material issue or a substantial request for relief.

 

“Proceeding” includes any
threatened, pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil (including intentional and unintentional tort
claims), criminal, administrative or investigative and whether instituted by or
on behalf of the Company or any other party, or any inquiry or investigation
that Indemnitee in good faith believes might lead to the institution of any
such action, suit or other proceedings hereinabove listed, except such as is
initiated by Indemnitee pursuant to Section 6.1 of this Agreement to
enforce his rights under this Agreement.

 

ARTICLE II

 

Services by Indemnitee

 

Section 2.1. Services by
Indemnitee. Indemnitee agrees to serve or continue to serve
in his current capacity or capacities as a director, officer, employee, agent
or fiduciary of the Company. Indemnitee may also agree to serve (the
agreement so to serve being in the sole discretion of Indemnitee), as the
Company may request from time to time, as a director, officer, employee,
agent or fiduciary of any other company, partnership, limited liability
company, association, joint venture, trust or other enterprise in which the
Company has an interest.

 

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Indemnitee and the Company each acknowledge that they
have entered into this Agreement as a means of inducing Indemnitee to serve the
Company in such capacities. Indemnitee may at any time and for any reason
resign from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law). The Company shall
have no obligation under this Agreement to continue Indemnitee in any such
position for any period of time and shall not be precluded by the provisions of
this Agreement from removing Indemnitee from any such position at any time.

 

ARTICLE III

 

Indemnification

 

Section 3.1. General. If
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding, the Company shall, to the fullest extent permitted by applicable
law in effect on the date hereof, and to such greater extent as applicable law may thereafter
permit, within 30 days after written demand is presented to the Company,
indemnify and hold Indemnitee harmless from and against any and all losses,
liabilities, claims, damages, judgments, fines, penalties, amounts paid in
settlement (subject to Section 7.2) and Expenses (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such listed items), whatsoever (i) arising out of any event or
occurrence related to the fact that Indemnitee is or was a director or officer
of the Company, is or was serving in another Corporate Status, consented to be
named as a person to be elected as a director of the Company, or by reason of
anything done or not done by Indemnitee in any such capacity and (ii) incurred
in connection with such Proceeding.

 

Section 3.2. Successful
Proceeding. Notwithstanding anything to the contrary set
forth herein (other than Section 3.3), if Indemnitee is, by reason of his
Corporate Status, a party to and is successful, on the merits or otherwise, in
any Proceeding, he shall be indemnified against all losses, liabilities,
claims, damages, judgments, fines, penalties, amounts paid in settlement
(subject to Section 7.2) and Expenses (including all interest, assessments
and other charges paid or payable in connection with or in respect of such listed
items), actually and reasonably incurred by him or on his behalf in connection
therewith. Notwithstanding anything to the contrary set forth herein (other
than Section 3.3), if Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to any Matter in
such Proceeding, the Company shall indemnify Indemnitee against all losses,
liabilities, claims, damages, judgments, fines, penalties, amounts paid in
settlement (subject to Section 7.2) and Expenses (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such listed items), actually and reasonably incurred by him or on his behalf
relating to such Matter. The termination of any Matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such Matter. To the extent that the Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding in which the Indemnitee is not a
party or threatened to be made a party, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
therewith.

 

Section 3.3. Claims
Initiated by Indemnitee. Notwithstanding anything to the
contrary set forth herein, prior to a Change of Control, Indemnitee shall not
be entitled to indemnification (including any advancement of Expenses) pursuant
to this Agreement in

 

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connection with any Proceeding initiated or claim made
by Indemnitee, unless either (i) the Board of Directors has authorized or
consented to the initiation of such Proceeding or the making of such claim or (ii) such
Proceeding or claim seeks to enforce Indemnitee’s rights under this Agreement.

 

ARTICLE IV

 

Advancement of Expenses

 

Section 4.1. Advances. In
the event of any threatened or pending Proceeding in which Indemnitee is a
party or is involved and that may give rise to a right of indemnification
under this Agreement, following written request to the Company by Indemnitee,
the Company shall pay to Indemnitee, within 10 days of such request, amounts to
cover Expenses incurred by Indemnitee in such Proceeding in advance of its
final disposition upon the receipt by the Company of (i) a written
undertaking executed by or on behalf of Indemnitee providing that Indemnitee
will repay the advance if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as provided in this Agreement and
(ii) evidence as to the amount of such Expenses.

 

Section 4.2. Repayment of
Advances or Other Expenses. Indemnitee agrees that Indemnitee
shall reimburse the Company for all Expenses advanced by the Company pursuant
to Section 4.1 in the event and only to the extent that it shall be
determined pursuant to the provisions of this Agreement or by final judgment or
other final adjudication under the provisions of any applicable law (as to
which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee is not entitled to be indemnified by the Company for such Expenses.

 

ARTICLE V

 

Procedure for
Determination of Entitlement

to Indemnification

 

Section 5.1. Request for
Indemnification. To obtain indemnification, Indemnitee shall
submit to the Secretary of the Company a written claim or request. Such written
claim or request shall contain sufficient information reasonably to inform the
Company about the nature and extent of the indemnification or advance sought by
Indemnitee. The Secretary of the Company shall promptly advise the Board of
Directors of such request.

 

Section 5.2. Determination
of Entitlement; No Change of Control. If there has been no
Change of Control at the time the request for indemnification is submitted,
Indemnitee’s entitlement to indemnification shall be determined in accordance
with Section 145(d) of the DGCL. If entitlement to indemnification is
to be determined by Independent Counsel pursuant to Section 145(d) of
the DGCL, the Company shall furnish written notice to Indemnitee within
10 days after receipt of the request for indemnification, specifying the
identity and address of Independent Counsel. The Indemnitee may, within 10 days
after such written notice of selection shall have been given, deliver to the
Company a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of “Independent Counsel” as defined
in Article I, and

 

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the objection shall set forth with particularity the
factual basis of such assertion. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit. If (i) the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant
to this Section  and (ii) within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 5.1,
no Independent Counsel shall have been selected and not objected to, the
Company or Indemnitee may petition the Court of Chancery or other court of
competent jurisdiction for resolution of any objection which shall have been
made by Indemnitee to the Company’s selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by the petitioned
court or by such other person as the petitioned court shall designate, and the
person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under this Section. If (i) Independent
Counsel does not make any determination respecting Indemnitee’s entitlement to
indemnification hereunder within 90 days after receipt by the Company of a
written request therefor and (ii) any judicial proceeding pursuant to Section 6.1
is then commenced, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

Section 5.3. Determination
of Entitlement; Change of Control. If there has been a Change
of Control at the time the request for indemnification is submitted, Indemnitee’s
entitlement to indemnification shall be determined in a written opinion by
Independent Counsel selected by Indemnitee. Indemnitee shall give the Company
written notice advising of the identity and address of the Independent Counsel
so selected. The Company may, within 10 days after such written notice of
selection shall have been given, deliver to the Indemnitee a written objection
to such selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in Article I, and the
objection shall set forth with particularity the factual basis of such
assertion. If such written objection is so made and substantiated, the
Independent Counsel so selected may not serve as Independent Counsel
unless and until such objection is withdrawn or a court has determined that
such objection is without merit. If (i) the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to this Section and
(ii) within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 5.1, no Independent Counsel shall
have been selected and not objected to, the Company or the Indemnitee may petition
the Court of Chancery or other court of competent jurisdiction for resolution
of any objection which shall have been made by the Company to Indemnitee’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the petitioned court or by such other person as
the petitioned court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under this Section. If (i) Independent Counsel does not make any
determination respecting Indemnitee’s entitlement to indemnification hereunder
within 90 days after receipt by the Company of a written request therefor and (ii) any
judicial proceeding or arbitration pursuant to Section 6.1 is then commenced,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

7

 

Section 5.4. Presumptions
and Burden of Proof; Procedures of Independent Counsel. In
making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement,
and the Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any
determination contrary to that presumption.

 

Except in the event that
the determination of entitlement to indemnification is to be made by
Independent Counsel, if the person or persons empowered under Section 5.2
to determine entitlement to indemnification shall not have made and furnished
to Indemnitee in writing a determination within 60 days after receipt by
the Company of the request therefor, the requisite determination of entitlement
to indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification. The termination of any Proceeding or of any
Matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall
not of itself adversely affect the right of Indemnitee to indemnification or
create a presumption that Indemnitee did not act in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of
the Company, or with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful. A person who acted
in good faith and in a manner he reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan of the Company
shall be deemed to have acted in a manner not opposed to the best interests of
the Company.

 

For purposes of any
determination hereunder, a person shall be deemed to have acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal action or
Proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on good faith reliance on the records or books
of account of the Company or another enterprise or on information supplied to
him by the officers of the Company or another enterprise in the course of their
duties or on the advice of legal counsel for the Company or another enterprise
or on information or records given or reports made to the Company or another
enterprise by an independent accountant or by an appraiser or other expert
selected with reasonable care by the Company or another enterprise. The term “another
enterprise” as used in this Section shall mean any other corporation or
any partnership, limited liability company, association, joint venture, trust,
employee benefit plan or other enterprise of which such person is or was
serving at the request of the Company as a director, officer, employee or agent.
The provisions of this paragraph shall not be deemed to be exclusive or to
limit in any way the circumstances in which an Indemnitee may be deemed to
have met the applicable standards of conduct for determining entitlement to
rights under this Agreement.

 

Section 5.5. Independent
Counsel Expenses. The Company shall pay any and all
reasonable fees and expenses of Independent Counsel incurred acting pursuant to
this Article and in any proceeding to which it is a party or witness in
respect of its investigation and written report and shall pay all reasonable
fees and expenses incident to the procedures in which such Independent Counsel
was selected or appointed. No Independent Counsel may serve if a timely
objection has been made to his selection until a court has determined that such
objection is without a reasonable basis.

 

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ARTICLE VI

 

Certain Remedies of
Indemnitee

 

Section 6.1. Adjudication. In
the event that (i) a determination is made pursuant to Section 5.2 or
5.3 that Indemnitee is not entitled to indemnification under this Agreement; (ii) advancement
of Expenses is not timely made pursuant to Section 4.1; (iii) Independent
Counsel is to determine Indemnitee’s entitlement to indemnification hereunder,
but does not make that determination within 90 days after receipt by the
Company of the request for that indemnification; or (iv) payment of
indemnification is not made within 10 days after a determination of entitlement
to indemnification has been made or deemed to have been made pursuant to Section 5.2,
5.3 or 5.4, Indemnitee shall be entitled to an adjudication in an appropriate
court of the State of Delaware, or in any other court of competent
jurisdiction, of his entitlement to such indemnification or advancement of
Expenses. In the event that a determination shall have been made that
Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 6.1 shall be conducted in all respects
as a de novo trial on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding commenced pursuant to this Section 6.1, the
Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be. If a
determination shall have been made or deemed to have been made that Indemnitee
is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding commenced pursuant to this Section 6.1,
or otherwise.

 

The Company shall be
precluded from asserting in any judicial proceeding commenced pursuant to this Section 6.1
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable, and shall stipulate in any such proceeding that the Company is
bound by all provisions of this Agreement. In the event that Indemnitee,
pursuant to this Section 6.1, seeks a judicial adjudication to enforce his
rights under, or to recover damages for breach of, this Agreement, (i) Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses actually and reasonably incurred by him
in such judicial adjudication, regardless of whether he prevails therein, and (ii) any
determination made pursuant to Section 5.2 or 5.3 that Indemnitee is not
entitled to indemnification under this Agreement shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expenses
advanced pursuant to Section 4.1 until it shall be determined by final
judgment or other final adjudication under the provisions of any applicable law
(as to which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee is not entitled to be indemnified by the Company for such Expenses.

 

ARTICLE VII

 

Participation by the
Company

 

Section 7.1. Participation
by the Company. With respect to any such Proceeding as to
which Indemnitee notifies the Company of the commencement thereof, the Company
will be entitled to participate therein at its own expense and, except as
otherwise provided below, to the extent that it may wish, the Company
(jointly with any other indemnifying party similarly

 

9

 

notified) will be entitled to assume the defense
thereof, with counsel reasonably satisfactory to Indemnitee. After receipt of
notice from the Company to Indemnitee of the Company’s election so to assume
the defense thereof, the Company will not be liable to Indemnitee under this
Agreement for any legal or other Expenses subsequently incurred by Indemnitee
in connection with the defense thereof other than reasonable costs of
investigation, Expenses incurred in being or preparing to be a witness or in
assisting, at the request of the Company, with the defense, and as otherwise
provided below. At the request of the Company, Indemnitee agrees to use his
reasonable efforts to assist in such defense. Indemnitee shall have the right
to employ his own counsel in such Proceeding but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee
shall have reasonably concluded that there is a conflict of interest between
the Company and Indemnitee in the conduct of the defense of such action or (iii) the
Company shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel employed by
Indemnitee shall be subject to indemnification pursuant to the terms of this
Agreement. The Company shall not be entitled to assume the defense of any
Proceeding brought in the name of or on behalf of the Company or as to which
Indemnitee shall have made the conclusion provided for in (ii) above.

 

Section 7.2. Settlements.
The Company shall not be liable to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any action or claim effected without its
written consent, which consent shall not be unreasonably withheld. The Company
shall not settle any action or claim in any manner that would impose any
limitation or unindemnified penalty on Indemnitee without Indemnitee’s written
consent, which consent shall not be unreasonably withheld.

 

ARTICLE VIII

 

Miscellaneous

 

Section 8.1. Nonexclusivity
of Rights. The rights of indemnification and advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled to under
applicable law, the Company’s Certificate of Incorporation, the Company’s
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or any
provision hereof shall be effective as to any Indemnitee for acts, events and
circumstances that occurred, in whole or in part, before such amendment,
alteration or repeal. The provisions of this Agreement shall continue in effect
as to an Indemnitee whose Corporate Status has ceased for any reason.

 

Section 8.2. Insurance and
Subrogation. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if,
but only to the extent that, Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.

 

In the event of any
payment hereunder, the Company shall be subrogated to the extent of such
payment to all the rights of recovery of Indemnitee, who shall execute all
papers

 

10

 

required and take
all action reasonably requested by the Company to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

Section 8.3. Acknowledgment
of Certain Matters. Both the Company and Indemnitee
acknowledge that in certain instances, applicable law or public policy may prohibit
indemnification of Indemnitee by the Company under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company has undertaken or may be
required in the future to undertake, by the Securities and Exchange Commission,
to submit the question of indemnification to a court in certain circumstances
for a determination of the Company’s right under public policy to indemnify
Indemnitee.

 

Section 8.4. Amendment. This
Agreement may not be modified or amended except by a written instrument
executed by or on behalf of each of the parties hereto.

 

Section 8.5. Waivers. The
observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) by the
party entitled to enforce such term only by a writing signed by the party
against which such waiver is to be asserted. Unless otherwise expressly
provided herein, no delay on the part of any party hereto in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party hereto of any right, power or
privilege hereunder operate as a waiver of any other right, power or privilege
hereunder nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

 

Section 8.6. Entire
Agreement. This Agreement and the documents referred to
herein constitute the entire agreement between the parties hereto with respect
to the matters covered hereby, and any other prior or contemporaneous oral or
written understandings or agreements with respect to the matters covered hereby
are superseded by this Agreement.

 

Section 8.7. Severability. If
any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby; and, to the fullest extent possible, the provisions of this
Agreement shall be construed so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable.

 

Section 8.8. Notices. Promptly
after receipt by Indemnitee of notice of the commencement of any action, suit
or proceeding, Indemnitee shall, if he anticipates or contemplates making a
claim for expenses or an advance pursuant to the terms of this Agreement,
notify the Company of the commencement of such action, suit or proceeding;
provided, however, that any delay in so notifying the Company shall not
constitute a waiver or release by Indemnitee of rights hereunder and that any omission
by Indemnitee so to notify the Company shall not relieve the Company from any
liability that it may have to Indemnitee otherwise than under this
Agreement. Any communication required or permitted to the Company shall be
addressed to the Secretary of the Company and any such communication to
Indemnitee shall be addressed to Indemnitee’s address as shown on the Company’s
records unless

 

11

 

Indemnitee specifies otherwise and shall be personally
delivered or delivered by overnight mail delivery. Any such notice shall be
effective upon receipt.

 

Section 8.9. Binding Effect.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.

 

Section 8.10. Governing Law.
This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to any principles
of conflict of laws that, if applied, might permit or require the application
of the laws of a different jurisdiction.

 

Section 8.11. Headings. The
Article and Section headings in this Agreement are for convenience of
reference only, and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.

 

Section 8.12. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed
to be an original and all of which together shall be deemed to be one and the
same instrument.

 

Section 8.13. Use of Certain
Terms. As used in this Agreement, the words “herein,” “hereof,”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular paragraph, subparagraph, section, subsection,
or other subdivision. Whenever the context may require, any pronoun used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.

 

IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered to be effective as of the date first above written.

 

	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Killelea

  	
   

  
	
   

  	
   

  	
  Name: Michael J. Killelea

  
	
   

  	
   

  	
  Title: Senior Vice President, General Counsel

  
	
   

  	
   

  	
  and Corporate Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William L. Fisher

  	
   

  
	
   

  	
   

  	
  William L. Fisher

  

 

12Exhibit 10.4

 

POGO PRODUCING COMPANY

 

INDEMNIFICATION AGREEMENT

 

This Indemnification
Agreement (this “Agreement”), made and entered into as of the 25th day
of April, 2006, by and between Pogo Producing Company, a Delaware corporation
(the “Company”), and Thomas A. Fry, III (“Indemnitee”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS, Indemnitee is
currently serving or is about to begin serving as a director and/or officer of
the Company and/or in another Corporate Status, and Indemnitee is willing,
subject to, among other things, the Company’s execution and performance of this
Agreement, to continue in or assume such capacity or capacities; and

 

WHEREAS, the By-Laws of
the Company provide that the Company shall indemnify and advance expenses to
all directors and officers of the Company in the manner set forth therein and
to the fullest extent permitted by applicable law, and the Company’s Restated Certificate
of Incorporation provides for limitation of liability for directors; and

 

WHEREAS, in order to
induce Indemnitee to provide services as contemplated hereby, the Company has
deemed it to be in its best interests and the best interests of its
stockholders to enter into this Agreement with Indemnitee;

 

NOW, THEREFORE, in consideration of Indemnitee’s
agreement to provide services to the Company and/or certain of its affiliates
as contemplated hereby, the mutual agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto stipulate and agree as follows:

 

ARTICLE I

 

Certain Definitions

 

As used herein, the
following words and terms shall have the following respective meanings (whether
singular or plural):

 

“Change of Control” means
a change in control of the Company after the date Indemnitee acquired his
Corporate Status, which shall be deemed to have occurred upon the occurrence of
any of the following events:

 

(a)                                  The
acquisition by any Person of beneficial ownership of Outstanding Company Voting
Securities (including any such acquisition of beneficial ownership deemed to
have occurred pursuant to Rule 13d-5 under the Exchange Act) if,
immediately thereafter, such Person is the beneficial owner of 20% or more of
either (i) the then Outstanding Company Common Stock or (ii) the then
Outstanding Company Voting Securities, unless such acquisition

 

 

is made (A) directly from the Company in a
transaction approved by a majority of the members of the Incumbent Board, (B) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or (C) by a parent
corporation resulting from a Business Combination if, following such Business
Combination, the conditions specified in clauses (i), (ii) and (iii) of
subsection (c) of this definition are satisfied; or

 

(b)                                 Individuals
who, as of the date of this Agreement, constituted the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date of this Agreement whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, except that any such
individual shall not be considered a member of the Incumbent Board if his or
her initial assumption of office occurs as a result of an actual or threatened
election contest or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

 

(c)                                  Approval
by the shareholders of the Company of a Business Combination (or if there is no
such 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 resulting from such Business Combination and the combined voting
power of the then outstanding voting securities of such parent corporation
entitled to vote generally in the election of directors will be (or is) then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination in substantially the same
proportions as their ownership immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than any
employee benefit plan (or related trust) of the Company or any parent
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more, respectively, of the then outstanding
shares of common stock of the parent corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of directors and
(iii) at least a majority of the members of the board of directors of the
parent corporation resulting from such Business Combination were members of the
Incumbent Board immediately prior to the consummation of such Business
Combination; or

 

(d)                                 Approval
by the shareholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a Major Asset Disposition (or if there
is no such approval by shareholders, consummation of such Major Asset
Disposition) unless, immediately following such Major Asset Disposition, (A) individuals
and entities that were beneficial owners of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately prior to such
Major Asset Disposition beneficially own, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding shares of voting stock of the Company (if
it continues to exist) and of the Acquiring Entity; (B) no Person, other
than any employee benefit plan (or related trust) of

 

2

 

the Company or such entity beneficially owns, directly
or indirectly, 20% or more of, respectively, the then outstanding shares of
common stock and the combined voting power of the then 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 the board of
directors of the Company (if it continues to exist) and of the Acquiring Entity
were members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such Major Asset Disposition.

 

For purposes of this
definition of Change of Control,

 

a                  the
term “Person” means an individual, entity or group;

 

b                 the
term “group” is used as it is defined for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934 (the “Exchange Act”);

 

c                  the
terms “beneficial owner”, “beneficially ownership” and “beneficially own” are
used as defined for purposes of Rule 13d-3 under the Exchange Act;

 

d                 the
term “Business Combination” means (x) a merger or consolidation involving the
Company or its stock or (y) an acquisition by the Company, directly or through
one or more subsidiaries, of another entity or its stock or assets;

 

e                  the
term “Outstanding Company Common Stock” shall mean the outstanding shares of
Common Stock, par value $1 per share, of the Company;

 

f                    the
term “Outstanding Company Voting Securities” means outstanding voting
securities of the Company entitled to vote generally in the election of
directors; and any specified percentage or portion of the Outstanding Company
Voting Securities (or of other voting stock or voting securities) shall be
determined based on the relative combined voting power of such securities;

 

g                 the
term “parent corporation resulting from a Business Combination” means the
Company if its stock is not acquired or converted in the Business Combination
and otherwise means the entity which as a result of such Business Combination
owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries;

 

h                 the
term “Major Asset Disposition” means the sale or other disposition in one
transaction or a series of related transactions of 60% or more of the
assets of the Company and its subsidiaries on a consolidated basis; and any
specified percentage or portion of the assets of the Company shall be based on
fair market value, as determined by a majority of the members of the Incumbent
Board; and

 

i                     “Acquiring
Entity” means the entity that acquires the largest portion of the assets sold
or otherwise disposed of in a Major Asset Disposition (or the entity, if any,
that owns a majority of the outstanding voting stock of such

 

3

 

acquiring entity entitled to vote generally in the election of
directors or members of a comparable governing body).

 

“Corporate Status”
describes the status of Indemnitee as a director, officer,  employee, agent or fiduciary of the Company
or of any other company, partnership, limited liability company, association,
joint venture, trust, employee benefit plan or other enterprise that Indemnitee
is or was serving at the request of the Company.

 

“Court” means the Court
of Chancery of the State of Delaware or any other court of competent
jurisdiction.

 

“DGCL” means the Delaware
General Corporation Law.

 

“Expenses” shall include
all attorneys’ fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.

 

“Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in matters of
corporate law and neither currently is, nor in the five years previous to its
selection or appointment has been, retained to represent (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the rights of Indemnitee under this Agreement or
of other indemnitees under similar indemnification agreements) or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder.

 

“Matter” is a claim, a
material issue or a substantial request for relief.

 

“Proceeding” includes any
threatened, pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil (including intentional and unintentional tort
claims), criminal, administrative or investigative and whether instituted by or
on behalf of the Company or any other party, or any inquiry or investigation
that Indemnitee in good faith believes might lead to the institution of any
such action, suit or other proceedings hereinabove listed, except such as is
initiated by Indemnitee pursuant to Section 6.1 of this Agreement to
enforce his rights under this Agreement.

 

ARTICLE II

 

Services by Indemnitee

 

Section 2.1. Services by
Indemnitee. Indemnitee agrees to serve or continue to serve
in his current capacity or capacities as a director, officer, employee, agent
or fiduciary of the Company. Indemnitee may also agree to serve (the
agreement so to serve being in the sole discretion of Indemnitee), as the
Company may request from time to time, as a director, officer, employee,
agent or fiduciary of any other company, partnership, limited liability
company, association, joint venture, trust or other enterprise in which the
Company has an interest.

 

4

 

Indemnitee and the Company each acknowledge that they
have entered into this Agreement as a means of inducing Indemnitee to serve the
Company in such capacities. Indemnitee may at any time and for any reason
resign from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law). The Company shall
have no obligation under this Agreement to continue Indemnitee in any such
position for any period of time and shall not be precluded by the provisions of
this Agreement from removing Indemnitee from any such position at any time.

 

ARTICLE III

 

Indemnification

 

Section 3.1. General. If
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding, the Company shall, to the fullest extent permitted by applicable
law in effect on the date hereof, and to such greater extent as applicable law may thereafter
permit, within 30 days after written demand is presented to the Company,
indemnify and hold Indemnitee harmless from and against any and all losses,
liabilities, claims, damages, judgments, fines, penalties, amounts paid in
settlement (subject to Section 7.2) and Expenses (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such listed items), whatsoever (i) arising out of any event or
occurrence related to the fact that Indemnitee is or was a director or officer
of the Company, is or was serving in another Corporate Status, consented to be
named as a person to be elected as a director of the Company, or by reason of
anything done or not done by Indemnitee in any such capacity and (ii) incurred
in connection with such Proceeding.

 

Section 3.2. Successful
Proceeding. Notwithstanding anything to the contrary set
forth herein (other than Section 3.3), if Indemnitee is, by reason of his
Corporate Status, a party to and is successful, on the merits or otherwise, in
any Proceeding, he shall be indemnified against all losses, liabilities,
claims, damages, judgments, fines, penalties, amounts paid in settlement
(subject to Section 7.2) and Expenses (including all interest, assessments
and other charges paid or payable in connection with or in respect of such
listed items), actually and reasonably incurred by him or on his behalf in
connection therewith. Notwithstanding anything to the contrary set forth herein
(other than Section 3.3), if Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to any Matter in
such Proceeding, the Company shall indemnify Indemnitee against all losses,
liabilities, claims, damages, judgments, fines, penalties, amounts paid in
settlement (subject to Section 7.2) and Expenses (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such listed items), actually and reasonably incurred by him or on his behalf
relating to such Matter. The termination of any Matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such Matter. To the extent that the Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding in which the Indemnitee is not a
party or threatened to be made a party, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
therewith.

 

Section 3.3. Claims
Initiated by Indemnitee. Notwithstanding anything to the
contrary set forth herein, prior to a Change of Control, Indemnitee shall not
be entitled to indemnification (including any advancement of Expenses) pursuant
to this Agreement in

 

5

 

connection with any Proceeding initiated or claim made
by Indemnitee, unless either (i) the Board of Directors has authorized or
consented to the initiation of such Proceeding or the making of such claim or (ii) such
Proceeding or claim seeks to enforce Indemnitee’s rights under this Agreement.

 

ARTICLE IV

 

Advancement of Expenses

 

Section 4.1. Advances. In
the event of any threatened or pending Proceeding in which Indemnitee is a
party or is involved and that may give rise to a right of indemnification
under this Agreement, following written request to the Company by Indemnitee,
the Company shall pay to Indemnitee, within 10 days of such request, amounts to
cover Expenses incurred by Indemnitee in such Proceeding in advance of its
final disposition upon the receipt by the Company of (i) a written
undertaking executed by or on behalf of Indemnitee providing that Indemnitee
will repay the advance if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as provided in this Agreement and
(ii) evidence as to the amount of such Expenses.

 

Section 4.2. Repayment of
Advances or Other Expenses. Indemnitee agrees that Indemnitee
shall reimburse the Company for all Expenses advanced by the Company pursuant
to Section 4.1 in the event and only to the extent that it shall be
determined pursuant to the provisions of this Agreement or by final judgment or
other final adjudication under the provisions of any applicable law (as to
which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee is not entitled to be indemnified by the Company for such Expenses.

 

ARTICLE V

 

Procedure for Determination of Entitlement

to Indemnification

 

Section 5.1. Request for
Indemnification. To obtain indemnification, Indemnitee shall
submit to the Secretary of the Company a written claim or request. Such written
claim or request shall contain sufficient information reasonably to inform the
Company about the nature and extent of the indemnification or advance sought by
Indemnitee. The Secretary of the Company shall promptly advise the Board of
Directors of such request.

 

Section 5.2. Determination
of Entitlement; No Change of Control. If there has been no
Change of Control at the time the request for indemnification is submitted,
Indemnitee’s entitlement to indemnification shall be determined in accordance
with Section 145(d) of the DGCL. If entitlement to indemnification is
to be determined by Independent Counsel pursuant to Section 145(d) of
the DGCL, the Company shall furnish written notice to Indemnitee within
10 days after receipt of the request for indemnification, specifying the
identity and address of Independent Counsel. The Indemnitee may, within 10 days
after such written notice of selection shall have been given, deliver to the
Company a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of “Independent Counsel” as defined
in Article I, and

 

6

 

the objection shall set forth with particularity the
factual basis of such assertion. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit. If (i) the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant
to this Section  and (ii) within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 5.1,
no Independent Counsel shall have been selected and not objected to, the
Company or Indemnitee may petition the Court of Chancery or other court of
competent jurisdiction for resolution of any objection which shall have been
made by Indemnitee to the Company’s selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by the petitioned
court or by such other person as the petitioned court shall designate, and the
person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under this Section. If (i) Independent
Counsel does not make any determination respecting Indemnitee’s entitlement to
indemnification hereunder within 90 days after receipt by the Company of a
written request therefor and (ii) any judicial proceeding pursuant to Section 6.1
is then commenced, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

Section 5.3. Determination
of Entitlement; Change of Control. If there has been a Change
of Control at the time the request for indemnification is submitted, Indemnitee’s
entitlement to indemnification shall be determined in a written opinion by
Independent Counsel selected by Indemnitee. Indemnitee shall give the Company
written notice advising of the identity and address of the Independent Counsel
so selected. The Company may, within 10 days after such written notice of
selection shall have been given, deliver to the Indemnitee a written objection
to such selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in Article I, and the
objection shall set forth with particularity the factual basis of such
assertion. If such written objection is so made and substantiated, the
Independent Counsel so selected may not serve as Independent Counsel
unless and until such objection is withdrawn or a court has determined that
such objection is without merit. If (i) the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to this Section and
(ii) within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 5.1, no Independent Counsel shall
have been selected and not objected to, the Company or the Indemnitee may petition
the Court of Chancery or other court of competent jurisdiction for resolution
of any objection which shall have been made by the Company to Indemnitee’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the petitioned court or by such other person as
the petitioned court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under this Section. If (i) Independent Counsel does not make any
determination respecting Indemnitee’s entitlement to indemnification hereunder
within 90 days after receipt by the Company of a written request therefor and (ii) any
judicial proceeding or arbitration pursuant to Section 6.1 is then commenced,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

7

 

Section 5.4. Presumptions
and Burden of Proof; Procedures of Independent Counsel. In
making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement,
and the Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any
determination contrary to that presumption.

 

Except in the event that
the determination of entitlement to indemnification is to be made by
Independent Counsel, if the person or persons empowered under Section 5.2
to determine entitlement to indemnification shall not have made and furnished
to Indemnitee in writing a determination within 60 days after receipt by
the Company of the request therefor, the requisite determination of entitlement
to indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification. The termination of any Proceeding or of any
Matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall
not of itself adversely affect the right of Indemnitee to indemnification or
create a presumption that Indemnitee did not act in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of
the Company, or with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful. A person who acted
in good faith and in a manner he reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan of the Company
shall be deemed to have acted in a manner not opposed to the best interests of
the Company.

 

For purposes of any
determination hereunder, a person shall be deemed to have acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal action or
Proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on good faith reliance on the records or books
of account of the Company or another enterprise or on information supplied to
him by the officers of the Company or another enterprise in the course of their
duties or on the advice of legal counsel for the Company or another enterprise
or on information or records given or reports made to the Company or another
enterprise by an independent accountant or by an appraiser or other expert
selected with reasonable care by the Company or another enterprise. The term “another
enterprise” as used in this Section shall mean any other corporation or
any partnership, limited liability company, association, joint venture, trust,
employee benefit plan or other enterprise of which such person is or was
serving at the request of the Company as a director, officer, employee or agent.
The provisions of this paragraph shall not be deemed to be exclusive or to
limit in any way the circumstances in which an Indemnitee may be deemed to
have met the applicable standards of conduct for determining entitlement to
rights under this Agreement.

 

Section 5.5. Independent
Counsel Expenses. The Company shall pay any and all
reasonable fees and expenses of Independent Counsel incurred acting pursuant to
this Article and in any proceeding to which it is a party or witness in
respect of its investigation and written report and shall pay all reasonable
fees and expenses incident to the procedures in which such Independent Counsel
was selected or appointed. No Independent Counsel may serve if a timely
objection has been made to his selection until a court has determined that such
objection is without a reasonable basis.

 

8

 

ARTICLE VI

 

Certain Remedies of Indemnitee

 

Section 6.1. Adjudication. In
the event that (i) a determination is made pursuant to Section 5.2 or
5.3 that Indemnitee is not entitled to indemnification under this Agreement; (ii) advancement
of Expenses is not timely made pursuant to Section 4.1; (iii) Independent
Counsel is to determine Indemnitee’s entitlement to indemnification hereunder,
but does not make that determination within 90 days after receipt by the
Company of the request for that indemnification; or (iv) payment of
indemnification is not made within 10 days after a determination of entitlement
to indemnification has been made or deemed to have been made pursuant to Section 5.2,
5.3 or 5.4, Indemnitee shall be entitled to an adjudication in an appropriate
court of the State of Delaware, or in any other court of competent
jurisdiction, of his entitlement to such indemnification or advancement of
Expenses. In the event that a determination shall have been made that
Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 6.1 shall be conducted in all respects
as a de novo trial on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding commenced pursuant to this Section 6.1, the
Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be. If a
determination shall have been made or deemed to have been made that Indemnitee
is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding commenced pursuant to this Section 6.1,
or otherwise.

 

The Company shall be
precluded from asserting in any judicial proceeding commenced pursuant to this Section 6.1
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable, and shall stipulate in any such proceeding that the Company is
bound by all provisions of this Agreement. In the event that Indemnitee,
pursuant to this Section 6.1, seeks a judicial adjudication to enforce his
rights under, or to recover damages for breach of, this Agreement, (i) Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses actually and reasonably incurred by him
in such judicial adjudication, regardless of whether he prevails therein, and (ii) any
determination made pursuant to Section 5.2 or 5.3 that Indemnitee is not
entitled to indemnification under this Agreement shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expenses
advanced pursuant to Section 4.1 until it shall be determined by final
judgment or other final adjudication under the provisions of any applicable law
(as to which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee is not entitled to be indemnified by the Company for such Expenses.

 

ARTICLE VII

 

Participation by the Company

 

Section 7.1. Participation
by the Company. With respect to any such Proceeding as to
which Indemnitee notifies the Company of the commencement thereof, the Company
will be entitled to participate therein at its own expense and, except as
otherwise provided below, to the extent that it may wish, the Company
(jointly with any other indemnifying party similarly

 

9

 

notified) will be entitled to assume the defense
thereof, with counsel reasonably satisfactory to Indemnitee. After receipt of
notice from the Company to Indemnitee of the Company’s election so to assume
the defense thereof, the Company will not be liable to Indemnitee under this
Agreement for any legal or other Expenses subsequently incurred by Indemnitee
in connection with the defense thereof other than reasonable costs of
investigation, Expenses incurred in being or preparing to be a witness or in
assisting, at the request of the Company, with the defense, and as otherwise
provided below. At the request of the Company, Indemnitee agrees to use his
reasonable efforts to assist in such defense. Indemnitee shall have the right
to employ his own counsel in such Proceeding but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee
shall have reasonably concluded that there is a conflict of interest between
the Company and Indemnitee in the conduct of the defense of such action or (iii) the
Company shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel employed by
Indemnitee shall be subject to indemnification pursuant to the terms of this
Agreement. The Company shall not be entitled to assume the defense of any
Proceeding brought in the name of or on behalf of the Company or as to which
Indemnitee shall have made the conclusion provided for in (ii) above.

 

Section 7.2. Settlements.
The Company shall not be liable to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any action or claim effected without its
written consent, which consent shall not be unreasonably withheld. The Company
shall not settle any action or claim in any manner that would impose any
limitation or unindemnified penalty on Indemnitee without Indemnitee’s written
consent, which consent shall not be unreasonably withheld.

 

ARTICLE VIII

 

Miscellaneous

 

Section 8.1. Nonexclusivity
of Rights. The rights of indemnification and advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled to under
applicable law, the Company’s Certificate of Incorporation, the Company’s
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or any
provision hereof shall be effective as to any Indemnitee for acts, events and
circumstances that occurred, in whole or in part, before such amendment,
alteration or repeal. The provisions of this Agreement shall continue in effect
as to an Indemnitee whose Corporate Status has ceased for any reason.

 

Section 8.2. Insurance and
Subrogation. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if,
but only to the extent that, Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.

 

In the event of any
payment hereunder, the Company shall be subrogated to the extent of such
payment to all the rights of recovery of Indemnitee, who shall execute all
papers

 

10

 

required and take
all action reasonably requested by the Company to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

Section 8.3. Acknowledgment
of Certain Matters. Both the Company and Indemnitee
acknowledge that in certain instances, applicable law or public policy may prohibit
indemnification of Indemnitee by the Company under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company has undertaken or may be
required in the future to undertake, by the Securities and Exchange Commission,
to submit the question of indemnification to a court in certain circumstances
for a determination of the Company’s right under public policy to indemnify
Indemnitee.

 

Section 8.4. Amendment. This
Agreement may not be modified or amended except by a written instrument
executed by or on behalf of each of the parties hereto.

 

Section 8.5. Waivers. The
observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) by the
party entitled to enforce such term only by a writing signed by the party
against which such waiver is to be asserted. Unless otherwise expressly
provided herein, no delay on the part of any party hereto in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party hereto of any right, power or
privilege hereunder operate as a waiver of any other right, power or privilege
hereunder nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

 

Section 8.6. Entire Agreement.
This Agreement and the documents referred to herein
constitute the entire agreement between the parties hereto with respect to the
matters covered hereby, and any other prior or contemporaneous oral or written
understandings or agreements with respect to the matters covered hereby are
superseded by this Agreement.

 

Section 8.7. Severability. If
any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby; and, to the fullest extent possible, the provisions of this
Agreement shall be construed so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable.

 

Section 8.8. Notices. Promptly
after receipt by Indemnitee of notice of the commencement of any action, suit
or proceeding, Indemnitee shall, if he anticipates or contemplates making a
claim for expenses or an advance pursuant to the terms of this Agreement,
notify the Company of the commencement of such action, suit or proceeding;
provided, however, that any delay in so notifying the Company shall not
constitute a waiver or release by Indemnitee of rights hereunder and that any omission
by Indemnitee so to notify the Company shall not relieve the Company from any
liability that it may have to Indemnitee otherwise than under this
Agreement. Any communication required or permitted to the Company shall be
addressed to the Secretary of the Company and any such communication to
Indemnitee shall be addressed to Indemnitee’s address as shown on the Company’s
records unless

 

11

 

Indemnitee specifies otherwise and shall be personally
delivered or delivered by overnight mail delivery. Any such notice shall be
effective upon receipt.

 

Section 8.9. Binding Effect.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.

 

Section 8.10. Governing Law.
This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to any principles
of conflict of laws that, if applied, might permit or require the application
of the laws of a different jurisdiction.

 

Section 8.11. Headings. The
Article and Section headings in this Agreement are for convenience of
reference only, and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.

 

Section 8.12. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed
to be an original and all of which together shall be deemed to be one and the
same instrument.

 

Section 8.13. Use of Certain
Terms. As used in this Agreement, the words “herein,” “hereof,”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular paragraph, subparagraph, section, subsection,
or other subdivision. Whenever the context may require, any pronoun used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.

 

IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered to be effective as of the date first above written.

 

	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Killelea

  	
   

  
	
   

  	
   

  	
  Name: Michael J. Killelea

  
	
   

  	
   

  	
  Title: Senior Vice President, General Counsel

  
	
   

  	
   

  	
  and Corporate Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas A. Fry, III

  	
   

  
	
   

  	
   

  	
  Thomas A. Fry, III

  

 

12

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