Pogo Producing Company Indemnification Agreement

Exhibit10.7

 

POGOPRODUCING COMPANY

 

INDEMNIFICATIONAGREEMENT

 

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

 

WI T N E S S E T H:

 

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

 

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

 

WHEREAS, in order to induce Indemnitee to provideservices as contemplated hereby, the Company has deemed it to be in its bestinterests and the best interests of its stockholders to enter into thisAgreement with Indemnitee;

 

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

 

ARTICLE I

 

Certain Definitions

 

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

 

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

 

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

 



 

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

 

(b)           Individualswho, as of the date of this Agreement, constituted the Board (the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Board;provided, however, that any individual becoming a director subsequent to thedate of this Agreement whose election, or nomination for election by theCompany’s shareholders, was approved by a vote of at least a majority of thedirectors then comprising the Incumbent Board shall be considered as thoughsuch individual were a member of the Incumbent Board, except that any suchindividual shall not be considered a member of the Incumbent Board if his orher initial assumption of office occurs as a result of an actual or threatenedelection contest or other actual or threatened solicitation of proxies orconsents by or on behalf of a Person other than the Board; or

 

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

 

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

 

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the Company or such entity beneficially owns, directlyor indirectly, 20% or more of, respectively, the then outstanding shares ofcommon stock and the combined voting power of the then outstanding votingsecurities of the Company (if it continues to exist) and of the AcquiringEntity and (C) at least a majority of the members of the board of directors ofthe Company (if it continues to exist) and of the Acquiring Entity were membersof the Incumbent Board at the time of the execution of the initial agreement oraction of the Board providing for such Major Asset Disposition.

 

For purposes of this definition of Change of Control,

 

a                  theterm “Person” means an individual, entity or group;
 
b                 theterm “group” is used as it is defined for purposes of Section 13(d)(3) of theSecurities Exchange Act of 1934 (the “Exchange Act”);
 
c                  theterms “beneficial owner”, “beneficially ownership” and “beneficially own” areused as defined for purposes of Rule 13d-3 under the Exchange Act;
 
d                 theterm “Business Combination” means (x) a merger or consolidation involving theCompany or its stock or (y) an acquisition by the Company, directly or throughone or more subsidiaries, of another entity or its stock or assets;
 
e                  theterm “Outstanding Company Common Stock” shall mean the outstanding shares ofCommon Stock, par value $1 per share, of the Company;
 
f                    theterm “Outstanding Company Voting Securities” means outstanding votingsecurities of the Company entitled to vote generally in the election ofdirectors; and any specified percentage or portion of the Outstanding CompanyVoting Securities (or of other voting stock or voting securities) shall bedetermined based on the relative combined voting power of such securities;
 
g                 theterm “parent corporation resulting from a Business Combination” means theCompany if its stock is not acquired or converted in the Business Combinationand otherwise means the entity which as a result of such Business Combinationowns the Company or all or substantially all of the Company’s assets eitherdirectly or through one or more subsidiaries;
 
h                 theterm “Major Asset Disposition” means the sale or other disposition in onetransaction or a series of related transactions of 60% or more of the assets ofthe Company and its subsidiaries on a consolidated basis; and any specifiedpercentage or portion of the assets of the Company shall be based on fairmarket value, as determined by a majority of the members of the IncumbentBoard; and
 
i                     “AcquiringEntity” means the entity that acquires the largest portion of the assets soldor otherwise disposed of in a Major Asset Disposition (or the entity, if any,that owns a majority of the outstanding voting stock of such

 

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acquiring entityentitled to vote generally in the election of directors or members of acomparable governing body).
 

“Corporate Status” describes the status of Indemniteeas a director, officer,  employee, agentor fiduciary of the Company or of any other company, partnership, limitedliability company, association, joint venture, trust, employee benefit plan orother enterprise that Indemnitee is or was serving at the request of theCompany.

 

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

 

“DGCL” means the Delaware General Corporation Law.

 

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

 

“Independent Counsel” means a law firm, or a member ofa law firm, that is experienced in matters of corporate law and neithercurrently is, nor in the five years previous to its selection or appointmenthas been, retained to represent (i) the Company or Indemnitee in anymatter material to either such party (other than with respect to mattersconcerning the rights of Indemnitee under this Agreement or of otherindemnitees under similar indemnification agreements) or (ii) any otherparty to the Proceeding giving rise to a claim for indemnification hereunder.

 

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

 

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

 

ARTICLE II

 

Services by Indemnitee

 

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

 

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

 

ARTICLE III

 

Indemnification

 

Section 3.1. General. IfIndemnitee was or is a party or is threatened to be made a party to anyProceeding, the Company shall, to the fullest extent permitted by applicablelaw in effect on the date hereof, and to such greater extent as applicable lawmay thereafter permit, within 30 days after written demand is presented to theCompany, indemnify and hold Indemnitee harmless from and against any and alllosses, liabilities, claims, damages, judgments, fines, penalties, amounts paidin settlement (subject to Section 7.2) and Expenses (including all interest, assessmentsand other charges paid or payable in connection with or in respect of suchlisted items), whatsoever (i) arising out of any event or occurrencerelated to the fact that Indemnitee is or was a director or officer of theCompany, is or was serving in another Corporate Status, consented to be namedas a person to be elected as a director of the Company, or by reason ofanything done or not done by Indemnitee in any such capacity and (ii) incurredin connection with such Proceeding.

 

Section 3.2. Successful Proceeding.Notwithstanding anything to the contrary set forth herein (other than Section3.3), if Indemnitee is, by reason of his Corporate Status, a party to and issuccessful, on the merits or otherwise, in any Proceeding, he shall beindemnified against all losses, liabilities, claims, damages, judgments, fines,penalties, amounts paid in settlement (subject to Section 7.2) and Expenses(including all interest, assessments and other charges paid or payable inconnection with or in respect of such listed items), actually and reasonablyincurred by him or on his behalf in connection therewith. Notwithstandinganything to the contrary set forth herein (other than Section 3.3), ifIndemnitee is not wholly successful in such Proceeding but is successful, onthe merits or otherwise, as to any Matter in such Proceeding, the Company shallindemnify Indemnitee against all losses, liabilities, claims, damages,judgments, fines, penalties, amounts paid in settlement (subject to Section7.2) and Expenses (including all interest, assessments and other charges paidor payable in connection with or in respect of such listed items), actually andreasonably incurred by him or on his behalf relating to such Matter. Thetermination of any Matter in such a Proceeding by dismissal, with or withoutprejudice, shall be deemed to be a successful result as to such Matter. To theextent that the Indemnitee is, by reason of his Corporate Status, a witness inany Proceeding in which the Indemnitee is not a party or threatened to be madea party, he shall be indemnified against all Expenses actually and reasonablyincurred by him or on his behalf in connection therewith.

 

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

 

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

 

ARTICLE IV

 

Advancement of Expenses

 

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

 

Section 4.2. Repayment of Advances or OtherExpenses. Indemnitee agrees that Indemnitee shall reimbursethe Company for all Expenses advanced by the Company pursuant to Section 4.1 inthe event and only to the extent that it shall be determined pursuant to theprovisions of this Agreement or by final judgment or other final adjudicationunder the provisions of any applicable law (as to which all rights of appealtherefrom have been exhausted or lapsed) that Indemnitee is not entitled to beindemnified by the Company for such Expenses.

 

ARTICLE V

 

Procedure forDetermination of Entitlement

to Indemnification

 

Section 5.1. Request for Indemnification. Toobtain indemnification, Indemnitee shall submit to the Secretary of the Companya written claim or request. Such written claim or request shall containsufficient information reasonably to inform the Company about the nature andextent of the indemnification or advance sought by Indemnitee. The Secretary ofthe Company shall promptly advise the Board of Directors of such request.

 

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

 

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the objection shall set forth with particularity thefactual basis of such assertion. If such written objection is so made andsubstantiated, the Independent Counsel so selected may not serve as IndependentCounsel unless and until such objection is withdrawn or a court has determinedthat such objection is without merit. If (i) the determination of entitlementto indemnification is to be made by Independent Counsel pursuant to thisSection  and (ii) within 20 days aftersubmission by Indemnitee of a written request for indemnification pursuant toSection 5.1, no Independent Counsel shall have been selected and not objectedto, the Company or Indemnitee may petition the Court of Chancery or other courtof competent jurisdiction for resolution of any objection which shall have beenmade by Indemnitee to the Company’s selection of Independent Counsel and/or forthe appointment as Independent Counsel of a person selected by the petitionedcourt or by such other person as the petitioned court shall designate, and theperson with respect to whom all objections are so resolved or the person soappointed shall act as Independent Counsel under this Section. If (i)Independent Counsel does not make any determination respecting Indemnitee’sentitlement to indemnification hereunder within 90 days after receipt by theCompany of a written request therefor and (ii) any judicial proceeding pursuantto Section 6.1 is then commenced, Independent Counsel shall be discharged andrelieved of any further responsibility in such capacity (subject to theapplicable standards of professional conduct then prevailing).

 

Section 5.3. Determination of Entitlement; Changeof Control. If there has been a Change of Control at the timethe request for indemnification is submitted, Indemnitee’s entitlement toindemnification shall be determined in a written opinion by Independent Counselselected by Indemnitee. Indemnitee shall give the Company written noticeadvising of the identity and address of the Independent Counsel so selected. TheCompany may, within 10 days after such written notice of selection shall havebeen given, deliver to the Indemnitee a written objection to such selection;provided, however, that such objection may be asserted only on the ground thatthe Independent Counsel so selected does not meet the requirements of “IndependentCounsel” as defined in Article I, and the objection shall set forth withparticularity the factual basis of such assertion. If such written objection isso made and substantiated, the Independent Counsel so selected may not serve asIndependent Counsel unless and until such objection is withdrawn or a court hasdetermined that such objection is without merit. If (i) the determination ofentitlement to indemnification is to be made by Independent Counsel pursuant tothis Section and (ii) within 20 days after submission by Indemnitee of awritten request for indemnification pursuant to Section 5.1, no IndependentCounsel shall have been selected and not objected to, the Company or theIndemnitee may petition the Court of Chancery or other court of competentjurisdiction for resolution of any objection which shall have been made by theCompany to Indemnitee’s selection of Independent Counsel and/or for theappointment as Independent Counsel of a person selected by the petitioned courtor by such other person as the petitioned court shall designate, and the personwith respect to whom all objections are so resolved or the person so appointedshall act as Independent Counsel under this Section. If (i) Independent Counseldoes not make any determination respecting Indemnitee’s entitlement toindemnification hereunder within 90 days after receipt by the Company of awritten request therefor and (ii) any judicial proceeding or arbitrationpursuant to Section 6.1 is then commenced, Independent Counsel shall bedischarged and relieved of any further responsibility in such capacity (subjectto the applicable standards of professional conduct then prevailing).

 

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

 

Except in the event that the determination ofentitlement to indemnification is to be made by Independent Counsel, if theperson or persons empowered under Section 5.2 to determine entitlement toindemnification shall not have made and furnished to Indemnitee in writing adetermination within 60 days after receipt by the Company of the requesttherefor, the requisite determination of entitlement to indemnification shallbe deemed to have been made and Indemnitee shall be entitled to suchindemnification. The termination of any Proceeding or of any Matter therein, byjudgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not of itselfadversely affect the right of Indemnitee to indemnification or create apresumption that Indemnitee did not act in good faith and in a manner that hereasonably believed to be in or not opposed to the best interests of theCompany, or with respect to any criminal Proceeding, that Indemnitee hadreasonable cause to believe that his conduct was unlawful. A person who actedin good faith and in a manner he reasonably believed to be in the interest ofthe participants and beneficiaries of an employee benefit plan of the Companyshall be deemed to have acted in a manner not opposed to the best interests ofthe Company.

 

For purposes of any determination hereunder, a personshall be deemed to have acted in good faith and in a manner he reasonablybelieved to be in or not opposed to the best interests of the Company, or, withrespect to any criminal action or Proceeding, to have had no reasonable causeto believe his conduct was unlawful, if his action is based on good faithreliance on the records or books of account of the Company or anotherenterprise or on information supplied to him by the officers of the Company oranother enterprise in the course of their duties or on the advice of legalcounsel for the Company or another enterprise or on information or recordsgiven or reports made to the Company or another enterprise by an independentaccountant or by an appraiser or other expert selected with reasonable care bythe Company or another enterprise. The term “another enterprise” as used inthis Section shall mean any other corporation or any partnership, limitedliability company, association, joint venture, trust, employee benefit plan orother enterprise of which such person is or was serving at the request of theCompany as a director, officer, employee or agent. The provisions of thisparagraph shall not be deemed to be exclusive or to limit in any way thecircumstances in which an Indemnitee may be deemed to have met the applicablestandards of conduct for determining entitlement to rights under thisAgreement.

 

Section 5.5. Independent Counsel Expenses. TheCompany shall pay any and all reasonable fees and expenses of IndependentCounsel incurred acting pursuant to this Article and in any proceeding to whichit is a party or witness in respect of its investigation and written report andshall pay all reasonable fees and expenses incident to the procedures in whichsuch Independent Counsel was selected or appointed. No Independent Counsel mayserve if a timely objection has been made to his selection until a court hasdetermined that such objection is without a reasonable basis.

 

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ARTICLE VI

 

Certain Remedies ofIndemnitee

 

Section 6.1. Adjudication. In theevent that (i) a determination is made pursuant to Section 5.2 or 5.3that Indemnitee is not entitled to indemnification under this Agreement;(ii) advancement of Expenses is not timely made pursuant toSection 4.1; (iii) Independent Counsel is to determine Indemnitee’sentitlement to indemnification hereunder, but does not make that determinationwithin 90 days after receipt by the Company of the request for that indemnification;or (iv) payment of indemnification is not made within 10 days after adetermination of entitlement to indemnification has been made or deemed to havebeen made pursuant to Section 5.2, 5.3 or 5.4, Indemnitee shall beentitled to an adjudication in an appropriate court of the State of Delaware,or in any other court of competent jurisdiction, of his entitlement to suchindemnification or advancement of Expenses. In the event that a determinationshall have been made that Indemnitee is not entitled to indemnification, anyjudicial proceeding commenced pursuant to this Section 6.1 shall beconducted in all respects as a de novo trialon the merits and Indemnitee shall not be prejudiced by reason of that adversedetermination. In any judicial proceeding commenced pursuant to thisSection 6.1, the Company shall have the burden of proving that Indemniteeis not entitled to indemnification or advancement of Expenses, as the case maybe. If a determination shall have been made or deemed to have been made thatIndemnitee is entitled to indemnification, the Company shall be bound by suchdetermination in any judicial proceeding commenced pursuant to thisSection 6.1, or otherwise.

 

The Company shall be precluded from asserting in anyjudicial proceeding commenced pursuant to this Section 6.1 that theprocedures and presumptions of this Agreement are not valid, binding andenforceable, and shall stipulate in any such proceeding that the Company isbound by all provisions of this Agreement. In the event that Indemnitee,pursuant to this Section 6.1, seeks a judicial adjudication to enforce hisrights under, or to recover damages for breach of, this Agreement,(i) Indemnitee shall be entitled to recover from the Company, and shall beindemnified by the Company against, any and all Expenses actually andreasonably incurred by him in such judicial adjudication, regardless of whetherhe prevails therein, and (ii) any determination made pursuant to Section5.2 or 5.3 that Indemnitee is not entitled to indemnification under thisAgreement shall not be binding and Indemnitee shall not be required toreimburse the Company for any Expenses advanced pursuant to Section 4.1 untilit shall be determined by final judgment or other final adjudication under theprovisions of any applicable law (as to which all rights of appeal therefromhave been exhausted or lapsed) that Indemnitee is not entitled to beindemnified by the Company for such Expenses.

 

ARTICLE VII

 

Participation by theCompany

 

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

 

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

 

Section 7.2. Settlements. TheCompany shall not be liable to indemnify Indemnitee under this Agreement forany amounts paid in settlement of any action or claim effected without itswritten consent, which consent shall not be unreasonably withheld. The Companyshall not settle any action or claim in any manner that would impose anylimitation or unindemnified penalty on Indemnitee without Indemnitee’s writtenconsent, which consent shall not be unreasonably withheld.

 

ARTICLE VIII

 

Miscellaneous

 

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

 

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

 

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

 

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required and take allaction reasonably requested by the Company to secure such rights, includingexecution of such documents as are necessary to enable the Company to bringsuit to enforce such rights.

 

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

 

Section 8.4. Amendment. ThisAgreement may not be modified or amended except by a written instrumentexecuted by or on behalf of each of the parties hereto.

 

Section 8.5. Waivers. Theobservance of any term of this Agreement may be waived (either generally or ina particular instance and either retroactively or prospectively) by the partyentitled to enforce such term only by a writing signed by the party againstwhich such waiver is to be asserted. Unless otherwise expressly providedherein, no delay on the part of any party hereto in exercising any right, poweror privilege hereunder shall operate as a waiver thereof, nor shall any waiveron the part of any party hereto of any right, power or privilege hereunderoperate as a waiver of any other right, power or privilege hereunder nor shallany single or partial exercise of any right, power or privilege hereunderpreclude any other or further exercise thereof or the exercise of any otherright, power or privilege hereunder.

 

Section 8.6. Entire Agreement. ThisAgreement and the documents referred to herein constitute the entire agreementbetween the parties hereto with respect to the matters covered hereby, and anyother prior or contemporaneous oral or written understandings or agreementswith respect to the matters covered hereby are superseded by this Agreement.

 

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

 

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

 

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

 

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

 

Section 8.10. Governing Law. ThisAgreement shall be construed in accordance with and governed by the laws of theState of Delaware without regard to any principles of conflict of laws that, ifapplied, might permit or require the application of the laws of a differentjurisdiction.

 

Section 8.11. Headings. TheArticle and Section headings in this Agreement are for convenience of referenceonly, and shall not be deemed to alter or affect the meaning or interpretation ofany provisions hereof.

 

Section 8.12. Counterparts. ThisAgreement may be executed in counterparts, each of which shall be deemed to bean original and all of which together shall be deemed to be one and the sameinstrument.

 

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

 

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

 

 

POGO PRODUCING COMPANY

 

 

 

 

 

By:

/s/ Michael J. Killelea

 

 

 

Name: Michael J. Killelea

 

 

Title: Senior Vice President, General Counsel

 

 

and Corporate Secretary

 

 

 

 

 

INDEMNITEE

 

 

 

 

 

By:

/s/ Carroll W. Suggs

 

 

 

Carroll W. Suggs

 

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