UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

THE HOUSTON EXPLORATION COMPANY

(Exact name of registrant as specified in its charter)

Delaware		001-11899		22-2674487
(State or other jurisdiction of		(Commission File No.)		(IRS Employer Identification No.)
incorporation

1100 Louisiana Street, Suite 2000
Houston, Texas		77002-5215
(Address of principal execute offices)		(Zip Code)

(713) 830-6800
(Registrant’s telephone number, including area code)

Not Applicable
(Former names or former address, if changed since last report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01. Entry into a Material Definitive Agreement.

     Executive Officer Compensation

     On October 24, 2006, the Board of Directors (the “Board”) of The Houston Exploration Company (the “Company”), based on the recommendation of the Compensation and Management Development Committee (the “Compensation Committee”), approved increases to executive officer compensation, effective October 1, 2006. The increases were part of the Board’s annual review of compensation. The new annual base salaries are as follows:

William G. Hargett		Chairman, President and		$	550,000
		Chief Executive Officer
Steven L. Mueller		Executive Vice President and		$	400,000
		Chief Operating Officer
Robert T. Ray		Senior Vice President and		$	350,000
		Chief Financial Officer
Carolyn M. Campbell		Senior Vice President and		$	290,000
		General Counsel
Roger B. Rice		Senior Vice President –		$	265,000
		Administration
Jeffrey B. Sherrick		Senior Vice President –		$	303,000
		Corporate Development
James F. Westmoreland		Vice President and		$	267,000
		Chief Accounting Officer
Joanne C. Hresko		Vice President and General Manager –		$	245,000
		Northern Division
John E. Bergeron, Jr.		Vice President and General Manager –		$	245,000
		Southern Division

     Employment Agreement Amendments

     Also on October 24, 2006, the Board, based on the recommendation of the Compensation Committee, approved certain amendments to the Company’s employment agreements with each of Mr. Hargett, Mr. Mueller, Mr. Ray, Ms. Campbell, Mr. Rice, Mr. Sherrick, Mr. Westmoreland, Ms. Hresko and Mr. Bergeron (the “Employment Agreements”) to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and any regulations and/or guidance promulgated thereunder (collectively, “Section 409A”). The purpose of the amendments generally is to avoid the imposition of certain taxes and penalties under Section 409A relating to certain “non-qualified deferred compensation payments” (within the meaning of Section 409A) payable upon an executive’s separation from a company by imposing, where

necessary, a six-month delay upon the commencement of such payments following separation from service. In addition, the amendments provide that interest will be payable by the Company in the event of a delay in payments necessitated by Section 409A.

     This description is qualified in its entirety by reference to the amendments to the Employment Agreements, which are attached as Exhibits 10.1 – 10.9 to this Form 8-K and are incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d)

Exhibits

10.1

Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and William G. Hargett.

10.2

Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and Steven L. Mueller.

10.3

Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated January 8, 2006 between The Houston Exploration Company and Robert T. Ray.

10.4

Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated March 27, 2006, between The Houston Exploration Company and Carolyn M. Campbell.

10.5

Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and Roger B. Rice.

10.6

Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated April 13, 2005, between The Houston Exploration Company and Jeffrey B. Sherrick.

10.7

Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and James F. Westmoreland.

10.8

Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated February 10, 2005, between The Houston Exploration Company and Joanne C. Hresko.

10.9

Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated March 10, 2005, between The Houston Exploration Company and John E. Bergeron, Jr.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit No.		Description
10.1		Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and William G. Hargett.
10.2		Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and Steven L. Mueller.
10.3		Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated January 8, 2006 between The Houston Exploration Company and Robert T. Ray.
10.4		Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated March 27, 2006, between The Houston Exploration Company and Carolyn M. Campbell.
10.5		Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and Roger B. Rice.
10.6		Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated April 13, 2005, between The Houston Exploration Company and Jeffrey B. Sherrick.
10.7		Amendment No. 1, dated October 24, 2006, to the Amended and Restated Employment Agreement dated February 8, 2005 between The Houston Exploration Company and James F. Westmoreland.
10.8		Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated February 10, 2005, between The Houston Exploration Company and Joanne C. Hresko.
10.9		Amendment No. 1, dated October 24, 2006, to the Employment Agreement dated March 10, 2005, between The Houston Exploration Company and John E. Bergeron, Jr.