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    Exhibit
10.36

     

    INDEMNIFICATION
AGREEMENT

    

    

    INDEMNIFICATION
AGREEMENT (this “Agreement”), made and executed as of _________________, by and
between Rosetta Resources Inc., a Delaware corporation (the ”Company”), and
__________________________, an individual resident of the State of Texas
(the “Indemnitee”).

     

    WHEREAS,
the Company is aware that, in order to induce highly competent persons to serve
the Company as directors or officers or in other capacities, the Company must
provide such persons with adequate protection through insurance and
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the
Company;

     

    WHEREAS,
the Company recognizes that the increasing difficulty in obtaining directors'
and officers' liability insurance, the increasing cost of such insurance and the
general reductions in coverage of such insurance have made attracting and
retaining such persons more difficult;

     

    WHEREAS,
the Company recognizes the substantial increase in corporate litigation in
general, subjecting directors and officers to expensive litigation risks at the
same time as the availability and coverage of liability insurance has been
severely limited;

     

    WHEREAS,
the Board of Directors of the Company has determined that it is in the best
interests of the Company's stockholders that the Company act to assure such
persons that there will be increased certainty of such protection in the
future;

     

    WHEREAS,
it is reasonable, prudent and necessary for the Company to contractually
obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will continue to serve the Company free from undue
concern that they will not be so indemnified; and

     

    WHEREAS,
the Indemnitee is willing to serve, continue to serve and take on additional
service for or on behalf of the Company or any of its direct or indirect
wholly-owned subsidiaries on the condition that he/she be so
indemnified.

     

    NOW,
THEREFORE, in consideration of the premises and the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Indemnitee do hereby agree as follows:

     

    1.         DEFINITIONS.  For
purposes of this Agreement:

     

    (a)           “Change
in Control” shall mean:

     

    (i)    
       a “change in control” of the Company
of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A for a proxy statement filed under Section 14(a) of the Securities
Exchange Act of 1934, as amended (the “Act”), as in effect on the date of this
Agreement;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)           a
“person” (as that term is used in 14(d)(2) of the Act) becomes the beneficial
owner (as defined in Rule 13d-3 under the Act) directly or indirectly of
securities representing 30% or more of the combined voting power for election of
directors of the then outstanding securities of the Company;

     

    (iii)           the
individuals who at the beginning of any period of two consecutive years or less
(starting on or after the date of this Agreement) constitute the Company's Board
of Directors cease for any reason during such period to constitute at least a
majority of the Company's Board of Directors, unless the election or nomination
for election of each new member of the Board of Directors was approved in
advance by vote of a majority of the members of such Board of Directors then
still in office who were members of such Board of Directors at the beginning of
such period;

     

    (iv)           the
stockholders of the Company approve any reorganization, merger, consolidation or
share exchange as a result of which the common stock of the Company shall be
changed, converted or exchanged into or for securities of another organization
or any dissolution or liquidation of the Company or any sale or the disposition
of 50% or more of the assets or business of the Company; or

     

    (v)           the
stockholders of the Company approve any reorganization, merger, consolidation or
share exchange with another corporation unless (1) the persons who were the
beneficial owners of the outstanding shares of the common stock of the Company
immediately before the consummation of such transaction beneficially own more
than 60% of the outstanding shares of the common stock of the successor or
survivor corporation in such transaction immediately following the consummation
of such transaction and (2) the number of shares of the common stock of such
successor or survivor corporation beneficially owned by the persons described in
Section 1(a)(v)(1) immediately following the consummation of such transaction is
beneficially owned by each such person in substantially the same proportion that
each such person had beneficially owned shares of the Company common stock
immediately before the consummation of such transaction, provided (3) the
percentage described in Section 1(a)(v)(1) of the beneficially owned shares of
the successor or survivor corporation and the number described in Section
1(a)(v)(2) of the beneficially owned shares of the successor or survivor
corporation shall be determined exclusively by reference to the shares of the
successor or survivor corporation which result from the beneficial ownership of
shares of common stock of the Company by the persons described in Section
1(a)(v)(1) immediately before the consummation of such transaction.

     

    (b)           “Disinterested
Director” shall mean a director of the Company who is not or was not a party to
the action, suit, investigation or proceeding in respect of which
indemnification is being sought by the Indemnitee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           “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 incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating or being or preparing to be a
witness in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature.

     

    (d)           “Independent
Counsel” shall mean a law firm or a member of a law firm that neither is
presently nor in the past five years has been retained to represent (i) the
Company or the Indemnitee in any matter material to either such party or (ii)
any other party to the action, suit, investigation or proceeding giving rise to
a claim for indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or the Indemnitee in an action to
determine the Indemnitee's right to indemnification under this
Agreement.

     

    2.         SERVICE
BY THE INDEMNITEE.  The Indemnitee agrees to serve as a director or
officer of the Company and will discharge his/her duties and responsibilities to
the best of his/her ability so long as the Indemnitee is duly elected or
qualified in accordance with the provisions of the Certificate of Incorporation,
as amended (the “Certificate”), and the Bylaws, as amended (the “Bylaws”), of
the Company and the General Corporation Law of the State of Delaware, as amended
(the “DGCL”), or until his/her earlier death, retirement, resignation or
removal. The Indemnitee may at any time and for any reason resign from such
position (subject to any other obligation, whether contractual or imposed by
operation of law), in which event this Agreement shall continue in full force
and effect after such resignation. Nothing in this Agreement shall confer upon
the Indemnitee the right to continue in the employ of the Company or as a
director of the Company, or affect the right of the Company to terminate, in the
Company's sole discretion (with or without cause) and at any time, the
Indemnitee's employment or position as a director, in each case, subject to any
contractual rights of the Indemnitee created or existing otherwise than under
this Agreement.

     

    3.         INDEMNIFICATION.  The
Company shall indemnify the Indemnitee and advance Expenses to the Indemnitee as
provided in this Agreement to the fullest extent permitted by the Certificate,
the Bylaws in effect as of the date hereof and the DGCL or other applicable law
in effect on the date hereof and to any greater extent that the DGCL or
applicable law may in the future from time to time permit. Without diminishing
the scope of the indemnification provided by this Section 3, the rights of
indemnification of the Indemnitee provided hereunder shall include, but shall
not be limited to, those rights hereinafter set forth, except that no
indemnification shall be paid to the Indemnitee:

     

    (a)           on
account of any action, suit or proceeding in which judgment is rendered against
the Indemnitee for disgorgement of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Act or similar provisions of any federal, state or local statutory
law;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)           on
account of conduct of the Indemnitee which is finally adjudged by a court of
competent jurisdiction to have been knowingly fraudulent or to constitute
willful misconduct;

     

    (c)           in
any circumstance where such indemnification is expressly prohibited by
applicable law;

     

    (d)           with
respect to liability for which payment is actually made to the Indemnitee under
a valid and collectible insurance policy or under a valid and enforceable
indemnity clause, Bylaw or agreement (other than this Agreement), except in
respect of any liability in excess of payment under such insurance, clause,
Bylaw or agreement;

     

    (e)           if
a final decision by a court having jurisdiction in the matter shall determine
that such indemnification is not lawful (and, in this respect, both the Company
and the Indemnitee have been advised that it is the position of the Securities
and Exchange Commission that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable, and that claims for indemnification should be submitted to the
appropriate court for adjudication); or

     

    (f)           in
connection with any action, suit or proceeding by the Indemnitee against the
Company or any of its direct or indirect wholly-owned subsidiaries or the
directors, officers, employees or other Indemnitees of the Company or any of its
direct or indirect wholly-owned subsidiaries, (i) unless such indemnification is
expressly required to be made by law, (ii) unless the action, suit or proceeding
was previously authorized by a majority of the Board of Directors of the
Company, (iii) unless such indemnification is provided by the Company, in its
sole discretion, pursuant to the powers vested in the Company under applicable
law or (iv) except as provided in Sections 12, 14 and 18 hereof.

     

    4.         ACTIONS
OR PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE
COMPANY.  The Indemnitee shall be entitled to the indemnification
rights provided in this Section 4 if the Indemnitee was or is a party or is
threatened to be a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative in nature,
other than an action by or in the right of the Company, by reason of the fact
that the Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any of its direct or indirect wholly-owned subsidiaries, or
is or was serving at the request of the Company, or any of its direct or
indirect wholly-owned subsidiaries, as a director, officer, employee, agent or
fiduciary of any other entity, including, but not limited to, another
corporation, partnership, limited liability company, employee benefit plan,
joint venture, trust or other enterprise, or by reason of any act or omission by
him/her in such capacity. Pursuant to this Section 4, the Indemnitee shall be
indemnified against all Expenses, judgments, penalties (including excise and
similar taxes), fines, liabilities and amounts paid in settlement which were
actually and reasonably incurred by the Indemnitee or on Indemnitee's behalf in
connection with such action, suit or proceeding (including, but not limited to,
the investigation, defense or appeal thereof), if the Indemnitee acted in good
faith and in a manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his/her conduct was
unlawful.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.         ACTIONS
BY OR IN THE RIGHT OF THE COMPANY.  The Indemnitee shall be entitled
to the indemnification rights provided in this Section 5 if the Indemnitee was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding brought by or in the right of the Company
to procure a judgment in its favor by reason of the fact that the Indemnitee is
or was a director, officer, employee, agent or fiduciary of the Company, or any
of its direct or indirect wholly-owned subsidiaries, or is or was serving at the
request of the Company, or any of its direct or indirect wholly-owned
subsidiaries, as a director, officer, employee, agent or fiduciary of another
entity, including, but not limited to, another corporation, partnership, limited
liability company, employee benefit plan, joint venture, trust or other
enterprise, or by reason of any act or omission by him/her in any such capacity.
Pursuant to this Section 5, the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him/her in connection with the
defense or settlement of such action, suit or proceeding (including, but not
limited to the investigation, defense or appeal thereof), if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company; provided, however, that no
such indemnification shall be made in respect of any claim, issue or matter as
to which the Indemnitee shall have been adjudged to be liable to the Company,
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action, suit or proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses which such court shall deem
proper.

     

    6.         GOOD
FAITH DEFINITION.  For purposes of this Agreement, the Indemnitee
shall be deemed to have acted in good faith and in a manner the Indemnitee
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 the Indemnitee's conduct was unlawful, if such
action was based on any of the following: (a) the records or books of the
account of the Company or other enterprise, including financial statements; (b)
information supplied to the Indemnitee by the officers of the Company or other
enterprise in the course of his/her duties; (c) the advice of legal counsel for
the Company or other enterprise; or (d) information or records given in reports
made to the Company or other enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Company or other enterprise.  The provisions of this Section 6
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

     

    7.         INDEMNIFICATION
FOR EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this
Agreement, to the extent that the Indemnitee has served on behalf of the
Company, or any of its direct or indirect wholly-owned subsidiaries, as a
witness or other participant in any class action or proceeding, or has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 4 and 5 hereof, or in defense of any claim,
issue or matter therein, including, but not limited to, the dismissal of any
action without prejudice, the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by the Indemnitee in connection
therewith.

     

    8.         PARTIAL
INDEMNIFICATION.  If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by the Indemnitee in connection with the investigation,
defense, appeal or settlement of such suit, action, investigation or proceeding
described in Sections 4 and 5 hereof, but is not entitled to indemnification for
the total amount thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion of such Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by the Indemnitee to
which the Indemnitee is entitled.  For purposes of this Section 8 and
without limitation, the termination of any claim, issue, or matter in such a
proceeding described herein (a) by dismissal, summary judgment, judgment on the
pleading, or final judgment, with or without prejudice, or (b) by agreement
without payment or assumption or admission of liability by Indemnitee, shall be
deemed to be a successful determination or result as to such claim, issue or
matter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9.         PROCEDURE
FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.

     

    (a)           To
obtain indemnification under this Agreement, the Indemnitee shall submit to the
Company a written request, including documentation and information which is
reasonably available to the Indemnitee and is reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to
indemnification.  The Secretary of the Company shall, promptly upon
receipt of a request for indemnification, advise the Board of Directors in
writing that the Indemnitee has requested indemnification. Any Expenses incurred
by the Indemnitee in connection with the Indemnitee's request for
indemnification hereunder shall be borne by the Company. The Company hereby
indemnifies and agrees to hold the Indemnitee harmless for any Expenses incurred
by the Indemnitee under the immediately preceding sentence irrespective of the
outcome of the determination of the Indemnitee's entitlement to
indemnification.

     

    (b)           Upon
written request by the Indemnitee for indemnification pursuant to Sections 4 and
5 hereof, the entitlement of the Indemnitee to indemnification pursuant to the
terms of this Agreement shall be determined by the following person or persons,
who shall be empowered to make such determination: (i) if a Change in Control
shall have occurred, by Independent Counsel (unless the Indemnitee shall request
in writing that such determination be made by the Board of Directors (or a
committee thereof) in the manner provided for in clause (b)(ii) of this Section
9) in a written opinion to the Board of Directors, a copy of which shall be
delivered to the Indemnitee; (ii) if a Change in Control shall not have
occurred, (A) by the Board of Directors of the Company, by a majority vote of a
quorum consisting of Disinterested Directors, or (B) if a quorum consisting of
Disinterested Directors is not obtainable, or if a majority vote of a quorum
consisting of Disinterested Directors so directs, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be delivered to
the Indemnitee. The Independent Counsel shall be selected by the Board of
Directors and approved by the Indemnitee. Upon failure of the Board of Directors
to so select, or upon failure of the Indemnitee to so approve, the Independent
Counsel shall be selected by the Chancellor of the State of Delaware or such
other person as the Chancellor shall designate to make such selection. Such
determination of entitlement to indemnification shall be made not later than 45
days after receipt by the Company of a written request for
indemnification.  If the person making such determination shall
determine that the Indemnitee is entitled to indemnification as to part (but not
all) of the application for indemnification, such person shall reasonably
prorate such part of indemnification among such claims, issues or matters. If it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within 10 days after such determination.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           Indemnitee
shall be entitled to indemnification hereunder without a separate determination
by or on behalf of the Company, with respect to any proceeding and/or any claim,
issue, or matter with respect thereto: (i) which is resolved by agreement
without any payment or assumption or admission of liability by Indemnitee; or
(ii) as to which a final decision on the merits has been made by the court or
other body with jurisdiction over that proceeding, in which Indemnitee was not
determined to be liable with respect to such claim, issue, or matter asserted
against Indemnitee in the proceeding, or (iii) as to which a court or arbitrator
determines upon application that, despite such a determination of liability on
the part of Indemnitee, but in view of all the circumstances of the proceeding
and of Indemnitee’s conduct with respect thereto, Indemnitee is fairly and
reasonably entitled to indemnification for such judgments, penalties, fines,
amounts paid in settlement, and Expenses as such court or arbitrator shall deem
proper; provided, however, such decision shall have been rendered in or with
respect to the proceeding for which Indemnitee seeks indemnification under this
Agreement.

    

    10.       PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS.

     

    (a)           In
making a determination with respect to entitlement to indemnification, the
Indemnitee shall be presumed to be entitled to indemnification hereunder and the
Company shall have the burden of proof in the making of any determination
contrary to such presumption.  Neither the failure of the Board of
Directors (or such other person or persons empowered to make the determination
of whether the Indemnitee is entitled to indemnification) to have made a
determination prior to the commencement of any action pursuant to this Agreement
that indemnification is proper in the circumstances because Indemnitee has met
the applicable standard of conduct, nor any determination thereby that
Indemnitee has not met such applicable standard of conduct, shall be a defense
or admissible as evidence in any action for any purpose or create a presumption
that Indemnitee has not acted in good faith or met any other applicable standard
of conduct.

     

    (b)           If
the Board of Directors, or such other person or persons empowered pursuant to
Section 9 to make the determination of whether the Indemnitee is entitled to
indemnification, shall have failed to make a determination as to entitlement to
indemnification within 45 days after receipt by the Company of such request, the
requisite determination of entitlement to indemnification shall be deemed to
have been made and the Indemnitee shall be absolutely entitled to such
indemnification, absent actual and material fraud in the request for
indemnification or a prohibition of indemnification under applicable
law.  The termination of any action, suit, investigation or proceeding
described in Sections 4 or 5 hereof by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself: (i) create a presumption that the Indemnitee did not act in good faith
and in a manner which he/she reasonably believed to be in or not opposed to the
best interests of the Company, or, with respect to any criminal action or
proceeding, that the Indemnitee has reasonable cause to believe that the
Indemnitee's conduct was unlawful; or (ii) otherwise adversely affect the rights
of the Indemnitee to indemnification, except as may be provided
herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.       ADVANCEMENT
OF EXPENSES.  Subject to applicable law, all reasonable Expenses
actually incurred by the Indemnitee in connection with any threatened or pending
action, suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding, if so requested by the
Indemnitee, within 20 days after the receipt by the Company of a statement or
statements from the Indemnitee requesting such advance or advances. The
Indemnitee may submit such statements from time to time. The Indemnitee's
entitlement to such Expenses shall include those incurred in connection with any
proceeding by the Indemnitee seeking an adjudication or award in arbitration
pursuant to this Agreement. Such statement or statements shall reasonably
evidence the Expenses incurred by the Indemnitee in connection therewith and
shall include or be accompanied by a written affirmation by the Indemnitee of
the Indemnitee's good faith belief that the Indemnitee has met the standard of
conduct necessary for indemnification under this Agreement and an undertaking by
or on behalf of the Indemnitee to repay such amount if it is ultimately
determined that the Indemnitee is not entitled to be indemnified against such
Expenses by the Company pursuant to this Agreement or otherwise. Each written
undertaking to pay amounts advanced must be an unlimited general obligation but
need not be secured, and shall be accepted without reference to financial
ability to make repayment.

     

    12.       REMEDIES
OF THE INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE
EXPENSES.  In the event that a determination is made that the
Indemnitee is not entitled to indemnification hereunder or if the payment has
not been timely made following a determination of entitlement to indemnification
pursuant to Sections 9 and 10, or if Expenses are not advanced pursuant to
Section 11, the Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware or any other court of competent
jurisdiction of the Indemnitee's entitlement to such indemnification or
advance.  Alternatively, the Indemnitee may, at the Indemnitee's
option, seek an award in arbitration to be conducted by a single arbitrator
chosen by the Indemnitee and approved by the Company, which approval shall not
be unreasonably withheld or delayed. If the Indemnitee and the Company do not
agree upon an arbitrator within 30 days following notice to the Company by the
Indemnitee that it seeks an award in arbitration, the arbitrator will be chosen
pursuant to the rules of the American Arbitration Association (the “AAA”). The
arbitration will be conducted pursuant to the rules of the AAA and an award
shall be made within 60 days following the filing of the demand for arbitration.
The arbitration shall be held in Houston, Texas.  The Company shall
not oppose the Indemnitee's right to seek any such adjudication or award in
arbitration or any other claim. Such judicial proceeding or arbitration shall be
made de novo, and the Indemnitee shall not be prejudiced by reason of a
determination (if so made) that the Indemnitee is not entitled to
indemnification. If a determination is made or deemed to have been made pursuant
to the terms of Section 9 or Section 10 hereof that the Indemnitee is entitled
to indemnification, the Company shall be bound by such determination and shall
be precluded from asserting that such determination has not been made or that
the procedure by which such determination was made is not valid, binding and
enforceable. The Company further agrees to stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement and is precluded from making any assertions to the contrary. If the
court or arbitrator shall determine that the Indemnitee is entitled to any
indemnification hereunder, the Company shall pay all reasonable Expenses
actually incurred by the Indemnitee in connection with such adjudication or
award in arbitration (including, but not limited to, any appellate
proceedings).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    13.       NOTIFICATION
AND DEFENSE OF CLAIM.  Promptly after receipt by the Indemnitee of
notice of the commencement of any action, suit or proceeding, the Indemnitee
will, if a claim in respect thereof is to be made against the Company under this
Agreement, notify the Company in writing of the commencement thereof. The
omission by the Indemnitee to so notify the Company will not relieve the Company
from any liability that it may have to the Indemnitee under this Agreement or
otherwise, except to the extent that the Company may suffer material prejudice
by reason of such failure. Notwithstanding any other provision of this
Agreement, with respect to any such action, suit or proceeding as to which the
Indemnitee gives notice to the Company of the commencement thereof:

     

    (a)           The
Company will be entitled to participate therein at its own expense.

     

    (b)           Except
as otherwise provided in this Section 13(b), to the extent that it may wish, the
Company, jointly with any other indemnifying party similarly notified, shall be
entitled to assume the defense thereof with counsel reasonably satisfactory to
the Indemnitee. After notice from the Company to the Indemnitee of its election
to so assume the defense thereof, Company shall not be liable to the Indemnitee
under this Agreement for any legal or other Expenses subsequently incurred by
the Indemnitee in connection with the defense thereof other than reasonable
costs of investigation or as otherwise provided below. The Indemnitee shall have
the right to employ the Indemnitee's own counsel in such action, suit or
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
the Indemnitee unless (i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of the defense of such action and such determination by the
Indemnitee shall be supported by an opinion of counsel, which opinion shall be
reasonably acceptable to the Company, or (iii) the Company shall not in fact
have employed counsel to assume the defense of the action, in each of which
cases the fees and Expenses of counsel shall be at the expense of the Company.
The Company shall not be entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Company or as to which the Indemnitee
shall have reached the conclusion provided for in clause (ii)
above.

     

    (c)           The
Company shall not be liable to indemnify the Indemnitee under this Agreement for
any amounts paid in settlement of any action, suit or proceeding affected
without its written consent, which consent shall not be unreasonably withheld.
The Company shall not be required to obtain the consent of the Indemnitee to
settle any action, suit or proceeding which the Company has undertaken to defend
if the Company assumes full and sole responsibility for such settlement and such
settlement grants the Indemnitee a complete and unqualified release in respect
of any potential liability.  The Company shall have no obligation to
indemnify Indemnitee under this Agreement with regard to any judicial award
issued in a proceeding, or any related Expenses of Indemnitee, if the Company
was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such proceeding, except to the extent the Company
was not materially prejudiced thereby.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)           If,
at the time of the receipt of a notice of a claim pursuant to this Section 13,
the Company has director and officer liability insurance in effect, the Company
shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective
policies.

     

    The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of the policies.

     

    14.       OTHER
RIGHT TO INDEMNIFICATION.  The indemnification and advancement of
Expenses provided by this Agreement are cumulative, and not exclusive, and are
in addition to any other rights to which the Indemnitee may now or in the future
be entitled under any provision of the Bylaws or Certificate of the Company, the
Certificate or Bylaws or other governing documents of any direct or indirect
wholly-owned subsidiary of the Company, any vote of the stockholders or
Disinterested Directors, any provision of law or otherwise. Except as required
by applicable law, the Company shall not adopt any amendment to its Bylaws or
Certificate the effect of which would be to deny, diminish or encumber the
Indemnitee's right to indemnification under this Agreement.

     

    15.       DIRECTOR
AND OFFICER LIABILITY INSURANCE.  The Company shall, from time to
time, make the good faith determination whether or not it is practicable for the
Company to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the officers and directors of the Company, and any
direct or indirect wholly-owned subsidiary of the Company, with coverage for
losses from wrongful acts, or to ensure the Company's performance of its
indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against
the protection afforded by such coverage. Notwithstanding the foregoing, the
Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not necessary or is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient benefit
or if the Indemnitee is covered by similar insurance maintained by a direct or
indirect wholly-owned subsidiary of the Company.  However, the
Company's decision whether or not to adopt and maintain such insurance shall not
affect in any way its obligations to indemnify its officers and directors under
this Agreement or otherwise. In all policies of director and officer liability
insurance, the Indemnitee shall be named as an insured in such a manner as to
provide the Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's directors, if the Indemnitee is a director;
or of the Company's officers, if the Indemnitee is not a director of the
Company, but is an officer. The Company agrees that the provisions of this
Agreement shall remain in effect regardless of whether liability or other
insurance coverage is at any time obtained or retained by the Company; except
that any payments made to, or on behalf of, the Indemnitee under an insurance
policy shall reduce the obligations of the Company hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    16.       SPOUSAL
INDEMNIFICATION.  The Company will indemnify the Indemnitee's spouse
to whom the Indemnitee is legally married at any time the Indemnitee is covered
under the indemnification provided in this Agreement (even if the Indemnitee did
not remain married to him or her during the entire period of coverage) against
any pending or threatened action, suit, proceeding or investigation for the same
period, to the same extent and subject to the same standards, limitations,
obligations and conditions under which the Indemnitee is provided
indemnification herein, if the Indemnitee's spouse (or former spouse) becomes
involved in a pending or threatened action, suit, proceeding or investigation
solely by reason of his or her status as the Indemnitee's spouse, including,
without limitation, any pending or threatened action, suit, proceeding or
investigation that seeks damages recoverable from marital community property,
jointly-owned property or property purported to have been transferred from the
Indemnitee to his/her spouse (or former spouse). The Indemnitee's spouse or
former spouse also may be entitled to advancement of Expenses to the same extent
that the Indemnitee is entitled to advancement of Expenses herein. The Company
may maintain insurance to cover its obligation hereunder with respect to the
Indemnitee's spouse (or former spouse) or set aside assets in a trust or escrow
funds for that purpose.

     

    17.       INTENT.  This
Agreement is intended to be broader than any statutory indemnification rights
applicable in the State of Delaware and shall be in addition to any other rights
the Indemnitee may have under the Company's Certificate, Bylaws, applicable law
or otherwise. To the extent that a change in applicable law (whether by statute
or judicial decision) permits greater indemnification by agreement than would be
afforded currently under the Company's Certificate, Bylaws, applicable law or
this Agreement, it is the intent of the parties that the Indemnitee enjoy by
this Agreement the greater benefits so afforded by such change.

     

    18.       ATTORNEY'S
FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT.  In the event that the
Indemnitee is subject to or intervenes in any proceeding in which the validity
or enforceability of this Agreement is at issue or seeks an adjudication or
award in arbitration to enforce the Indemnitee's rights under, or to recover
damages for breach of, this Agreement the Indemnitee, if he/she prevails in
whole or in part in such action, shall be entitled to recover from the Company
and shall be indemnified by the Company against any actual expenses for
attorneys' fees and disbursements reasonably incurred by the
Indemnitee.

     

    19.       SUBROGATION.  In
the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of the Indemnitee,
who shall execute all documents required and shall do all acts that may be
necessary to secure such rights and to enable the Company effectively to bring
suit to enforce such rights.

     

    20. 
     EFFECTIVE DATE.  The provisions of this
Agreement shall cover claims, actions, suits or proceedings whether now pending
or hereafter commenced and shall be retroactive to cover acts or omissions or
alleged acts or omissions which heretofore have taken place. The Company shall
be liable under this Agreement, pursuant to Sections 4 and 5 hereof, for all
acts of the Indemnitee while serving as a director and/or officer,
notwithstanding the termination of the Indemnitee's service, if such act was
performed or omitted to be performed during the term of the Indemnitee's service
to the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    21.       GROSS
UP FOR TAXES.  In the event any payment of indemnity to an Indemnitee
under this Agreement shall be deemed to be income for federal, state or local
income tax purposes, then the Company shall pay to the Indemnitee, in addition
to any amount for indemnification provided for herein, an amount equal to the
amount of taxes for which such Indemnitee shall become liable (without offset
for any deductions which such Indemnitee may have not related to the
indemnification amount), promptly upon receipt from such Indemnitee of a copy of
such Indemnitee’s tax return, which shall be maintained in strictest confidence
by the Company.

     

    22.       DURATION
OF AGREEMENT.  This Agreement shall continue until and terminate upon
the later of: (a) ten years after the Indemnitee has ceased to occupy any of the
positions or have any relationships described in Sections 4 and 5 of this
Agreement and (b) the final termination of all pending or threatened actions,
suits, proceedings or investigations to which the Indemnitee may be subject by
reason of the fact that he/she is or was a director, officer, employee, agent or
fiduciary of the Company, or any direct or indirect wholly-owned subsidiary of
the Company, or is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary of any other entity, including, but not
limited to, another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or by reason of
any act or omission by the Indemnitee in any such capacity. The indemnification
provided under this Agreement shall continue as to the Indemnitee even though
he/she may have ceased to be a director or officer of the Company, or any direct
or indirect wholly-owned subsidiary of the Company. This Agreement shall be
binding upon the Company and its successors and assigns, including, without
limitation, any corporation or other entity which may have acquired all or
substantially all of the Company's assets or business or into which the Company
may be consolidated or merged, and shall inure to the benefit of the Indemnitee
and his/her spouse, successors, assigns, heirs, devisees, executors,
administrators or other legal representations. The Company shall require any
successor or assignee (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by written agreement in form and substance reasonably
satisfactory to the Company and the Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place.  No legal action shall be brought and no claim or cause
of action shall be asserted by or on behalf of the Company against Indemnitee or
any Indemnified Party based upon or arising out of a right of the Company or any
obligation of Indemnitee under this Agreement, after the later of one (1) year
following (i) the date of termination of Indemnitee’s service to the Company as
a director or officer, or (ii) with respect to a particular proceeding in
connection with which Indemnitee requests indemnification or advancement of
Expenses hereunder, the final termination of such proceeding, and any such claim
or cause of action of the Company shall be extinguished and deemed released
unless asserted by filing a legal action within such time.

     

    23.       DISCLOSURE
OF PAYMENTS.  Except as expressly required by any federal securities
laws or other federal or state law, neither party hereto shall disclose any
payments under this Agreement unless prior approval of the other party is
obtained.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    24.       CONTRIBUTION.  To
the fullest extent permissible under applicable law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to
the amount incurred by Indemnitee, whether for judgments, fines, penalties,
excise taxes, amounts paid or to be paid in settlement, and/or for Expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such proceeding in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event(s)
and/or transaction(s) giving rise to such proceeding, and/or (ii) the relative
fault of the Company (and its directors, officers, employees, and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).

     

    25.       SEVERABILITY.  If
any provision or provisions of this Agreement shall be held invalid, illegal or
unenforceable for any reason whatsoever, (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, but not
limited to, all portions of any sections of this Agreement containing any such
provision held to be invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby and (b) to the fullest extent possible, the
provisions of this Agreement (including, but not limited to, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifest by
the provision held invalid, illegal or unenforceable.

     

    26.       COUNTERPARTS.  This
Agreement may be executed by one or more counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall
constitute one and the same agreement. Only one such counterpart signed by the
party against whom enforceability is sought shall be required to be produced to
evidence the existence of this Agreement.

     

    27.       CAPTIONS.  The
captions and headings used in this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

     

    28.       ENTIRE
AGREEMENT, MODIFICATION AND WAIVER.  This Agreement constitutes the
entire agreement and understanding of the parties hereto regarding the subject
matter hereof, and no supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver. No supplement, modification or amendment
to this Agreement shall limit or restrict any right of the Indemnitee under this
Agreement in respect of any act or omission of the Indemnitee prior to the
effective date of such supplement, modification or amendment unless expressly
provided therein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    29.       NOTICES.  All
notices, requests, demands or other communications hereunder shall be in writing
and shall be deemed to have been duly given if (a) delivered by hand with
receipt acknowledged by the party to whom said notice or other communication
shall have been directed, (b) mailed by certified or registered mail, return
receipt requested with postage prepaid, on the date shown on the return receipt
or (c) delivered by facsimile transmission on the date shown on the facsimile
machine report:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        (i)

                                      	
                                        If
      to the Indemnitee to:

                                      
	 
      	
                                         

                                      	 
      
	 
      	
                                         

                                      	 
      
	 
      	
                                         

                                      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        (ii)

                                      	
                                        If
      to the Company to:

                                      
	 
      	 
      	 
      
	 
      	
                                        Rosetta
      Resources Inc.

                                      
	 
      	
                                        717
      Texas, Suite 2800

                                      
	 
      	
                                        Houston,
      Texas 77002

                                      
	 
      	
                                        Attention:  Vice
      President and General Counsel

                                      
	 
      	
                                        Facsimile:
      (713)
481-8561

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    or to
such other address as may be furnished to the Indemnitee by the Company or to
the Company by the Indemnitee, as the case may be.

    

    30.       GOVERNING
LAW.  The parties hereto agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware, applied without giving effect to any conflicts of law
principles.

     

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.

     

    
      
        
          
            
              
                
                  
                    
                      	 
      	
                              THE
      COMPANY

                            
	 
      	
                              ROSETTA
      RESOURCES INC.

                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                              By:

                            	 
      
	 
      	
                              Name:

                            	 
      
	 
      	
                              Title:

                            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                              INDEMNITEE

                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                              By:ex10_37.htm

    
      
        

      
Exhibit 10.37

       

      SECOND
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

      

      

      This Second Amended and Restated
Employment Agreement (this “Agreement”), effective as of December 31, 2008 (the
“Amendment Date”) is between Rosetta Resources Inc., a Delaware corporation
(“Employer”), and Michael H. Hickey (“Executive”), and supersedes and replaces
that certain Amended and Restated Employment Agreement between Employer and
Executive dated September 1, 2007.

      

      WHEREAS, Executive has been employed as
Vice President and General Counsel of Employer; and

      

      WHEREAS, the parties desire to amend
and restate the Amended and Restated Employment Agreement dated as of September
1, 2007, all as herein provided;

      

      NOW, THEREFORE, the parties hereto
agree as follows:

      

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

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

      (i)           “Good
Reason” means any of the following actions if taken without Executive’s prior
written consent: (i) any demotion of Executive as evidenced by a material
diminution in Executive’s responsibilities or duties; (ii) a material diminution
in Executive’s base compensation; (iii) any permanent relocation of Executive’s
place of business to a location 50 miles or more from the then-current location,
provided such relocation is a material change in geographic location at which
Executive must provide services for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder; or
(iv) any other action or inaction by Employer that constitutes a material breach
by Employer of its obligations under Paragraphs 12 or 20 of this
Agreement.  Neither a transfer of employment among Employer and any of
its Affiliates, a change in the co-employment relationship, nor a mere change in
job title constitutes “Good Reason.”

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

      3.     
       Term.  Executive’s
employment under this Agreement shall commence on August 1, 2005 and shall be
for an initial term of one Annual Period (the “Employment Term”), unless sooner
terminated as provided in this Agreement.  Subject to earlier
termination as provided in this Agreement, the Employment Term shall be
automatically extended for an additional Annual Period unless either Executive
or Employer gives written notice to the other six months or more prior to the
end of the initial term or, if the Agreement has been automatically extended
beyond the initial term, six months or more prior to the end of the additional
Annual Period.  In the event of such an automatic extension, each
additional Annual Period shall be part of the “Employment Term.”  Upon
such timely written notice, Executive’s employment and this Agreement will end
upon the expiration of the Employment Term.  The ending of Executive’s
employment as a result of the expiration of the Employment Term shall not
constitute a termination of employment by either party under this
Agreement.

      

      4.        
    Position and
Duties.

       

      (a)           Executive
shall be employed as Vice President and General Counsel.  In such
capacity, Executive, subject to the ultimate control and direction of the Chief
Executive Officer of Employer, shall have such duties, functions,
responsibilities, and authority as are from time to time delegated to Executive
by the Chief Executive Officer of Employer; provided, however, that such duties,
functions, responsibilities, and authority are reasonable and customary for a
person serving in the same or similar capacity of an enterprise comparable to
Employer, and provided further, however, that Executive shall not be
directed by the Chief Executive Officer or Board to take any action that would
reasonably require Executive to withdraw from representation of the Company
(other than a withdrawal
due to an actual or potential conflict of interest) or that could reasonably be
expected to result in sanctions under the Texas Disciplinary Rules of
Professional Conduct to the extent that such direction is provided or continues
to be provided after Executive has notified the chairman of the Board in writing
that the contemplated actions would require withdrawal and/or could reasonably
be expected to result in sanctions

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

      5.        
    Compensation and Related
Matters.

      

      
        (a)           
Base
Salary.  During each Annual Period of the Employment Term,
Employer shall pay to Executive for his services under this Agreement an annual
base salary (“Base Salary”).  The Base Salary effective as of
Amendment Date shall be $240,000.  The Base Salary is subject to
adjustments at the discretion of the Board, but in no event shall Employer pay
Executive a Base Salary less than that set forth above without the consent of
Executive.  The Base Salary shall be payable in installments in
accordance with the general payroll practices of Employer, or as otherwise
mutually agreed upon.

      

      

      (b)           Annual
Incentives.  During the Employment Term, Executive will
participate in any incentive compensation plan (ICP) or retention bonus
arrangement applicable to Executive’s position, as may be adopted by Employer
from time to time and in accordance with the terms of such
plan(s).  Executive’s target award opportunity for the year ending on
December 31, 2007, will be based upon 65%
of Executive’s Base Salary paid to Executive by Employer prorated for the number
of months in such period as compared to a full year and shall be subject to such
other terms, conditions and restrictions as may be established by the Board or
the compensation committee.

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

      6.          
  Termination of Employment
and Agreement.

      

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

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

      

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

         

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

      

      

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

      

      

      
         (E)
With
respect to the special bonus arrangement provided to Executive effective August
14, 2006, any amounts that remain unpaid as of the Employment Termination
Date.

      

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

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

      

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

      

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

      

      (A)           An
amount equal to (1) 50% of the amount provided for under Paragraph 7(e)(ii)(A)
plus (2) the sum (to the extent that such sum exceeds zero) of the amounts
provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) less the payment under
Paragraph 7(e)(iii)(A)(1) less the Section 409A Exempt Amount, shall be paid in
a single lump sum no later than 60 days after the Employment Termination Date or
the expiration of the Employment Term, as applicable, provided that the
Employment Termination Date or the expiration of the Employment Term, as
applicable, constitutes a separation from service for purposes of Code Section
409A and the regulations thereunder.  For purposes of this Agreement,
the “Section 409A Exempt Amount” is two times the lesser of (x) Executive’s
annualized compensation based upon the annual rate of pay for services provided
to Employer for the calendar year preceding the calendar year in which Executive
has a separation from service (as defined in Code Section 409A and the
regulations thereunder) with Employer (adjusted for any increase during that
year that was expected to continue indefinitely if the
service provider had not separated from service) or (y) the maximum amount that
may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which Executive has a separation from
service.

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

      (B)           The
Section 409A Exempt Amount or, if less, the excess of the amount provided for
under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) over the amount paid under
Paragraph 7(e)(iii)(A), shall be paid in equal monthly installments over a
period of 6 months commencing on the first day of the sixth month following the
Employment Termination Date or the expiration of the Employment Term, as
applicable, provided that the Employment Termination Date or the expiration of
the Employment Term, as applicable, constitutes a separation from service for
purposes of Code Section 409A and the regulations thereunder.

      

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

      

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

      

      (i)      
      If, within the two-year period following a
Corporate Change, Executive’s employment with Employer or an Affiliate or
successor of Employer is terminated by Employer or an Affiliate for any reason
other than death, Inability to Perform, or Cause, is terminated by Executive for
Good Reason, or if Employer or an Affiliate or successor of Employer gives
timely notice pursuant to Paragraph 3 and Executive’s employment and this
Agreement therefore ends upon the expiration of the Employment Term, Executive
will be paid the Compensation Payment, the Vacation Payment and any unreimbursed
Business Expenses, at the time and in the manner required by applicable
law.  In addition, if, within 45 days after the Employment Termination
Date or the expiration of the Employment Term, as applicable, Executive has
signed a general release agreement in a form acceptable to Employer and
Executive does not revoke such release, in lieu of any other payments under
Paragraph 7(e)(ii), (A) Executive shall be paid a lump-sum amount equivalent to
the sum of (x) 2 times the Executive’s
then-current Base Salary, and (y) 2 times the target ICP award for the
performance period in which the Corporate Change occurs; (B) with respect to the
special bonus arrangement provided to Executive effective August 14, 2006,
Executive shall be paid any amounts that remain unpaid as of the Employment
Termination Date; and (C) any unvested Employer stock options and restricted
stock will be immediately vested and Executive will have twelve months following
the Employment Termination Date or expiration of the Employment Term, as
applicable, to exercise the Employer stock options, provided that in no event
may such stock options be exercised after the earlier of the latest date upon
which the options could have expired by their original terms or the 10th
anniversary of the original date of grant of the
options.

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

      (g)           Health
Insurance.  In addition, if Executive’s employment with
Employer or an Affiliate or successor of Employer is terminated or ends under
the circumstances set forth in Paragraph 7(f), Executive will receive, in
addition to any other payments due under this Agreement, the following benefit:
if, at the time of the Employment Termination Date or the expiration of the
Employment Term, as applicable, Executive participates in one or more health
plans offered or made available by Employer and Executive is eligible for and
elects to receive continued coverage under such plans in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any
successor law, Employer will reimburse Executive during 12-month period
following the Employment Termination Date or the expiration of the Employment
Term, as applicable, for the difference between the total amount of the monthly
COBRA premiums for the same coverage as in effect on the Employment Termination
Date or the expiration of the Employment Term, as applicable, that are actually
paid by Executive for such continued health plan benefits and the total monthly
amount of the same premiums charged to active senior executives of Employer for
health insurance coverage.  Such reimbursement shall be made within
the 90-day period following Executive’s payment of each monthly COBRA
premium.  Provided, however, that Employer’s reimbursement obligation
under this Paragraph 7(g) shall terminate upon the earlier of (i) the expiration
of the time period described above or (ii) the date Executive becomes eligible
for health insurance coverage under a subsequent employer’s plan without being
subject to any preexisting-condition exclusion under that plan, which occurrence
Executive shall promptly report to Employer.  Provided further,
however, the amount of COBRA reimbursement during a calendar year may not affect
the COBRA expenses eligible for reimbursement in any other calendar
year.

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

      (i)      
     Compliance
with Code Section 409A.  If
Employer determines that Executive is a “specified employee” on the date of
Executive’s “separation from service,” as those terms are defined in and
pursuant to Code Section 409A and related Treasury guidance thereunder, then,
notwithstanding any provision of this Agreement to the contrary, no payment of
compensation under this Agreement shall be made to Executive during the period
lasting six months from the date of Executive’s separation unless Employer
determines that there is no reasonable basis for believing that making such
payment would cause Executive to suffer adverse tax consequences pursuant to
Code Section 409A.  If any payment to Executive is delayed pursuant to
the foregoing sentence, such payment instead shall be paid, without interest, on
the first business day following the expiration of the six-month period referred
to in the prior sentence.  Each aforementioned payment is a separate
“payment” within the meaning of Treasury Regulation section
1.409A-2(b)(2)(iii).

      

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

      

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

      

      8.      
      Confidential
Information.

      

      (a)           Executive
acknowledges and agrees that (i) Employer and its Affiliates are engaged in a
highly competitive business; (ii) Employer and its Affiliates have expended
considerable time and resources to develop goodwill with their customers,
vendors, and others, and to create, protect, and exploit Confidential
Information; (iii) Employer must continue to prevent the dilution of its and its
Affiliates’ goodwill and unauthorized use or disclosure of its Confidential
Information to avoid irreparable harm to its legitimate business interests; (iv)
given his position and responsibilities, he is a fiduciary of Rosetta and its
Affiliates; (v) his status as a fiduciary and the proper functioning of the
legal
system require the preservation by him of the Confidential Information during
his employment with Rosetta and thereafter; (vi) he is obligated by the Texas
Rules of Disciplinary Conduct and the common law during his employment with
Rosetta and thereafter to protect and reserve Rosetta and its Affiliates’
Confidential Information and not to use the Confidential Information to the
disadvantage of Rosetta or its Affiliates or for his own or a third party’s
benefit; (vii) in the oil and gas acquisition, exploration, development and
production business, his participation in or direction of Employer’s or its
Affiliates’ day-to-day operations, strategic planning, and legal affairs, are an
integral part of Employer’s continued success and goodwill; (viii) given his
position and responsibilities, he necessarily will be creating Confidential
Information that belongs to Employer and enhances Employer’s goodwill, and in
carrying out his responsibilities he in turn will be relying on Employer’s
goodwill and the disclosure by Employer to him of Confidential Information; (ix)
he will have access to Confidential Information that could be used by any
Competitor of Employer in a manner that would irreparably harm Employer’s
competitive position in the marketplace and dilute its goodwill; and (x) he
necessarily would use or disclose Confidential Information if he were to engage
in competition with Employer.

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

       

      (i)            
he
will comply in all respects with the Texas Disciplinary Rules of Professional
Conduct (“Rules”);

       

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

       

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

      
         

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

      

      

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

      

      

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

      

      

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

      

      

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

      

      

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

      

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

      

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

       

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

      

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

      

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

      

      10.           Intellectual
Property.

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

       

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

      

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

      

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

      

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

      

      (i)    
       If to Employer, at:

      

      Rosetta Resources Inc.

      Attn: Chief Executive
Officer

      717
Texas

      Suite
2800

      Houston,
Texas 77002

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

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

      
        
           

        

        
           

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	EMPLOYER	 	
                                    EXECUTIVE

                                  
	 	 
      	 	 
      
	ROSETTA
      RESOURCES INC.	 	
                                    MICHAEL
      H. HICKEY

                                  
	 	 
      	 	 
      
	 	 
      	 	 
      
	 	 
      	 	 
      
	By:	
                                     

                                  	 	 
      
	 	 
      	 	 
      
	RANDY
      L. LIMBACHER	 	 
      
	PRESIDENT
      & CHIEF EXECUTIVE OFFICER

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