Exhibit 10.7
POGO PRODUCING
COMPANY
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (this
“Agreement”), made and entered into as of the 25
th day of April, 2006, by and between Pogo Producing
Company, a Delaware corporation (the “Company”), and
Carroll W. Suggs (“Indemnitee”).
W I T N E S
S E T H :
WHEREAS, Indemnitee is currently
serving or is about to begin serving as a director and/or officer
of the Company and/or in another Corporate Status, and Indemnitee
is willing, subject to, among other things, the Company’s
execution and performance of this Agreement, to continue in or
assume such capacity or capacities; and
WHEREAS, the By-Laws of the Company
provide that the Company shall indemnify and advance expenses to
all directors and officers of the Company in the manner set forth
therein and to the fullest extent permitted by applicable law, and
the Company’s Restated Certificate of Incorporation provides
for limitation of liability for directors; and
WHEREAS, in order to induce
Indemnitee to provide services as contemplated hereby, the Company
has deemed it to be in its best interests and the best interests of
its stockholders to enter into this Agreement with
Indemnitee;
NOW, THEREFORE, in consideration of
Indemnitee’s agreement to provide services to the Company
and/or certain of its affiliates as contemplated hereby, the mutual
agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto stipulate and agree as
follows:
ARTICLE I
Certain
Definitions
As used herein, the following words
and terms shall have the following respective meanings (whether
singular or plural):
“Change of Control”
means a change in control of the Company after the date Indemnitee
acquired his Corporate Status, which shall be deemed to have
occurred upon the occurrence of any of the following
events:
(a)
The acquisition by any Person of beneficial ownership of
Outstanding Company Voting Securities (including any such
acquisition of beneficial ownership deemed to have occurred
pursuant to Rule 13d-5 under the Exchange Act) if, immediately
thereafter, such Person is the beneficial owner of 20% or more of
either (i) the then Outstanding Company Common Stock or (ii) the
then Outstanding Company Voting Securities, unless such
acquisition
is made (A) directly from
the Company in a transaction approved by a majority of the members
of the Incumbent Board, (B) by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) by a parent
corporation resulting from a Business Combination if, following
such Business Combination, the conditions specified in clauses (i),
(ii) and (iii) of subsection (c) of this definition are satisfied;
or
(b)
Individuals who, as of the date of this Agreement, constituted the
Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date of
this Agreement whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, except that any such individual shall not be
considered a member of the Incumbent Board if his or her initial
assumption of office occurs as a result of an actual or threatened
election contest or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board; or
(c)
Approval by the shareholders of the Company of a Business
Combination (or if there is no such approval by shareholders,
consummation of such Business Combination) unless, immediately
following such Business Combination, (i) more than 60% of,
respectively, the then outstanding shares of common stock of the
parent corporation resulting from such Business Combination and the
combined voting power of the then outstanding voting securities of
such parent corporation entitled to vote generally in the election
of directors will be (or is) then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination in
substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (ii) no Person (other than any employee benefit plan (or
related trust) of the Company or any parent corporation resulting
from such Business Combination) beneficially owns, directly or
indirectly, 20% or more, respectively, of the then outstanding
shares of common stock of the parent corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (iii) at least a
majority of the members of the board of directors of the parent
corporation resulting from such Business Combination were members
of the Incumbent Board immediately prior to the consummation of
such Business Combination; or
(d)
Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) a Major Asset
Disposition (or if there is no such approval by shareholders,
consummation of such Major Asset Disposition) unless, immediately
following such Major Asset Disposition, (A) individuals and
entities that were beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities
immediately prior to such Major Asset Disposition beneficially own,
directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding shares of voting stock of the Company (if it
continues to exist) and of the Acquiring Entity; (B) no Person,
other than any employee benefit plan (or related trust)
of
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the Company or such entity
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities of
the Company (if it continues to exist) and of the Acquiring Entity
and (C) at least a majority of the members of the board of
directors of the Company (if it continues to exist) and of the
Acquiring Entity were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board
providing for such Major Asset Disposition.
For purposes of this definition of Change of
Control,
a
the term “Person”
means an individual, entity or group;
b
the term “group” is
used as it is defined for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934 (the “Exchange
Act”);
c
the terms “beneficial
owner”, “beneficially ownership” and
“beneficially own” are used as defined for purposes of
Rule 13d-3 under the Exchange Act;
d
the term “Business
Combination” means (x) a merger or consolidation involving
the Company or its stock or (y) an acquisition by the Company,
directly or through one or more subsidiaries, of another entity or
its stock or assets;
e
the term “Outstanding
Company Common Stock” shall mean the outstanding shares of
Common Stock, par value $1 per share, of the Company;
f
the term “Outstanding
Company Voting Securities” means outstanding voting
securities of the Company entitled to vote generally in the
election of directors; and any specified percentage or portion of
the Outstanding Company Voting Securities (or of other voting stock
or voting securities) shall be determined based on the relative
combined voting power of such securities;
g
the term “parent corporation
resulting from a Business Combination” means the Company if
its stock is not acquired or converted in the Business Combination
and otherwise means the entity which as a result of such Business
Combination owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries;
h
the term “Major Asset
Disposition” means the sale or other disposition in one
transaction or a series of related transactions of 60% or more of
the assets of the Company and its subsidiaries on a consolidated
basis; and any specified percentage or portion of the assets of the
Company shall be based on fair market value, as determined by a
majority of the members of the Incumbent Board; and
i
“Acquiring Entity”
means the entity that acquires the largest portion of the assets
sold or otherwise disposed of in a Major Asset Disposition (or the
entity, if any, that owns a majority of the outstanding voting
stock of such
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acquiring entity entitled to vote
generally in the election of directors or members of a comparable
governing body).
“Corporate Status”
describes the status of Indemnitee as a director, officer,
employee, agent or fiduciary of the Company or of any other
company, partnership, limited liability company, association, joint
venture, trust, employee benefit plan or other enterprise that
Indemnitee is or was serving at the request of the
Company.
“Court” means the Court
of Chancery of the State of Delaware or any other court of
competent jurisdiction.
“DGCL” means the
Delaware General Corporation Law.
“Expenses” shall include
all attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of
the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or
being or preparing to be a witness in a Proceeding.
“Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in
matters of corporate law and neither currently is, nor in the five
years previous to its selection or appointment has been, retained
to represent (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters
concerning the rights of Indemnitee under this Agreement or of
other indemnitees under similar indemnification agreements) or
(ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder.
“Matter” is a claim, a
material issue or a substantial request for relief.
“Proceeding” includes
any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding, whether civil
(including intentional and unintentional tort claims), criminal,
administrative or investigative and whether instituted by or on
behalf of the Company or any other party, or any inquiry or
investigation that Indemnitee in good faith believes might lead to
the institution of any such action, suit or other proceedings
hereinabove listed, except such as is initiated by Indemnitee
pursuant to Section 6.1 of this Agreement to enforce his
rights under this Agreement.
ARTICLE II
Services by
Indemnitee
Section 2.1.
Services by Indemnitee. Indemnitee agrees to serve or
continue to serve in his current capacity or capacities as a
director, officer, employee, agent or fiduciary of the Company.
Indemnitee may also agree to serve (the agreement so to serve being
in the sole discretion of Indemnitee), as the Company may request
from time to time, as a director, officer, employee, agent or
fiduciary of any other company, partnership, limited liability
company, association, joint venture, trust or other enterprise in
which the Company has an interest.
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Indemnitee and the Company
each acknowledge that they have entered into this Agreement as a
means of inducing Indemnitee to serve the Company in such
capacities. Indemnitee may at any time and for any reason resign
from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law). The
Company shall have no obligation under this Agreement to continue
Indemnitee in any such position for any period of time and shall
not be precluded by the provisions of this Agreement from removing
Indemnitee from any such position at any time.
ARTICLE III
Indemnification
Section 3.1.
General. If Indemnitee was or is a
party or is threatened to be made a party to any Proceeding, the
Company shall, to the fullest extent permitted by applicable law in
effect on the date hereof, and to such greater extent as applicable
law may thereafter permit, within 30 days after written demand is
presented to the Company, indemnify and hold Indemnitee harmless
from and against any and all losses, liabilities, claims, damages,
judgments, fines, penalties, amounts paid in settlement (subject to
Section 7.2) and Expenses (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such listed items), whatsoever (i) arising out of any event or
occurrence related to the fact that Indemnitee is or was a director
or officer of the Company, is or was serving in another Corporate
Status, consented to be named as a person to be elected as a
director of the Company, or by reason of anything done or not done
by Indemnitee in any such capacity and (ii) incurred in connection
with such Proceeding.
Section 3.2.
Successful Proceeding . Notwithstanding anything to
the contrary set forth herein (other than Section 3.3), if
Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified against all losses, liabilities, claims, damages,
judgments, fines, penalties, amounts paid in settlement (subject to
Section 7.2) and Expenses (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such listed items), actually and reasonably incurred by him or on
his behalf in connection therewith. Notwithstanding anything to the
contrary set forth herein (other than Section 3.3), if Indemnitee
is not wholly successful in such Proceeding but is successful, on
the merits or otherwise, as to any Matter in such Proceeding, the
Company shall indemnify Indemnitee against all losses, liabilities,
claims, damages, judgments, fines, penalties, amounts paid in
settlement (subject to Section 7.2) and Expenses (including all
interest, assessments and other charges paid or payable in
connection with or in respect of such listed items), actually and
reasonably incurred by him or on his behalf relating to such
Matter. The termination of any Matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a
successful result as to such Matter. To the extent that the
Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding in which the Indemnitee is not a party or threatened to
be made a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in
connection therewith.
Section 3.3.
Claims Initiated by Indemnitee . Notwithstanding
an
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