Exhibit 10.19
CHANGE IN CONTROL SEPARATION
BENEFIT PLAN
OF RAM ENERGY RESOURCES, INC.
AND
PARTICIPATING
SUBSIDIARIES
Introduction
The Board of Directors of the
Company, has determined that it is in the best interests of the
Company and its shareholders to assure that the Company will have
the continued dedication of each “Executive” (as
defined in Section 2 of this Plan), notwithstanding the
possibility, threat, or occurrence of a “Change in
Control” (as defined in Section 2 of this Plan) of the
Company. The Board believes it is important to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
in Control, and to encourage the Executive’s full attention
and dedication to the affairs of the Company during the term of
this Plan and upon the occurrence of such event. The Board also
believes the Company is best served by providing the Executive with
compensation arrangements upon a Change in Control which provide
the Executive with individual financial security and which are
competitive with those of other corporations. In order to
accomplish these objectives, the Board has caused the Company to
enter into this Plan.
Article I.
SCOPE
Section 1.1 Name.
This Plan shall be known as the
Change in Control Separation Benefit Plan of RAM Energy Resources,
Inc. and Participating Subsidiaries.
Article II.
DEFINITIONS
Section 2.1
“Act” means
the Securities Exchange of Act of 1934, as amended from time to
time.
Section 2.2 “Accrued
Obligations” has
the meaning ascribed to such term in Section 4.1.
Section 2.3
“Affiliate” means, with respect to the Company, any person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the
Company; provided, however, that a natural person shall not be
considered an Affiliate.
Section 2.4 “Annual Base
Salary” means the
annual regular basic cash remuneration before deductions for taxes
and other items withheld, and without regard to any salary
reduction pursuant to any plans maintained by an Employing Company
under Sections 401(k) or 125 of the Code, payable to an Executive
for services rendered to an Employing Company, but not including
pay for bonuses, incentive compensation, special pay, awards or
commissions. The Annual Base Salary may be increased from time to
time, in the Company’s discretion, but shall not be reduced
by the Company or Employing Company during the Change In Control
Period.
Section 2.5 “Board of
Directors” or “Board” means the board of directors of the
Company.
Section 2.6
“Cause” means, in connection with the termination of
Executive’s employment with the Company or the Employing
Company, the termination of such employment due to:
(i) the failure of the Executive to
perform in any material respect the Executive’s prescribed
duties to the Employing Company (other than any such failure
resulting from the Executive becoming Disabled);
(ii) the commission by the Executive
of a wrongful act that caused or was reasonably likely to cause
damage to the Employing Company;
(iii) an act of gross negligence,
fraud, unfair competition, dishonesty or misrepresentation in the
performance of the Executive’s duties on behalf of the
Employing Company;
(iv) the conviction of or the entry
of a plea of nolo contendere by the Executive to any felony or the
conviction of or the entry of a plea of nolo contendere to any
offense involving dishonesty, breach of trust or moral turpitude;
or
(v) a breach of the
Executive’s fiduciary duty involving personal
profit.
Section 2.7 “Change in
Control” of the
Company shall be deemed to have occurred as of the first day that
any one or more of the following conditions shall have been
satisfied:
(i) at the close of business day
next following the day on which the Company learns of the
acquisition by any person of beneficial ownership, within the
meaning of Rule 13d-3 promulgated under the Act, of 50% or more of
the then outstanding shares of Common Stock of the Company (the
“Outstanding Company Common Stock”), excluding,
however, the following: (A) any acquisition by the Company;
(B) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company; and (C) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i) and (ii) of subsection (iii) of this
definition;
(ii) at any time the Incumbent
Directors shall cease for any reason to constitute a majority of
the Board;
(iii) upon the consummation of a
reorganization, merger or consolidation, or a sale or other
disposition of all or substantially all of the
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assets, of the Company (a
“Corporate Transaction”); excluding, however, a
Corporate Transaction pursuant to which (i) all or
substantially all of the individuals or entities who are the
beneficial owners, respectively, of the Outstanding Company Common
Stock immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 50% of the
Outstanding Company Common Stock (or, if applicable, 50% of the
combined voting power of the outstanding securities of such
corporation entitled to vote generally in the election of
directors) of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
indirectly), and (ii) Incumbent Directors will constitute a
majority of the members of the Board of Directors of the
corporation resulting from such Corporate Transaction;
or
(iv) approval by the stockholders of
the Company of a plan of complete liquidation or dissolution of the
Company.
Section 2.8 “Change in
Control Period” means the one (1) year period following the
occurrence of Change in Control of the Company.
Section 2.9
“COBRA” means
the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended from time to time.
Section 2.10
“Code” means
the Internal Revenue Code of 1986, as amended from time to
time.
Section 2.11
“Company” means RAM Energy Resources, Inc., the sponsor of
this Plan.
Section 2.12
“Compensation Committee” means the Compensation Committee established and
appointed by the Board of Directors.
Section 2.13
“Disabled” means, with respect to any Executive, that
(i) such Executive has received disability payments under the
Company’s long-term disability plan for a period of three
(3) months or more, or (ii) based upon the written report
(prepared after a complete physical examination of the Executive)
of a mutually agreeable qualified physician designated by the
Company and the Executive or the Executive’s representative,
the Compensation Committee determines, in accordance with
Section 409A of the Code, that the Executive has become
physically or mentally incapable of performing the
Executive’s essential job functions with or without
reasonable accommodation or job protection as required by law for a
continuous period expected to last for a continuous period of not
less than twelve (12) months.
Section 2.14
“Effective Date” means the day on which a Change in Control
occurs.
Section 2.15
“Employing Company” means the Company or any Affiliate who employs
the Executive.
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Section 2.16
“Executive” means each duly elected (by the Board of
Directors) Senior Vice President (“SVP”) and Vice
President (“VP”) of the Company or an
Affiliate.
Section 2.17 “Good
Reason” means the
termination by the Executive of the Executive’s employment
during the Change in Control Period for any of the following
events, unless the Executive has consented in writing to such
event:
(i) any material diminution in the
Executive’s Annual Base Salary;
(ii) the assignment to the Executive
of any duties materially inconsistent with the Executive’s
position (including status, offices, titles, and reporting
requirements), authority, duties, or responsibilities, other than
an isolated, insubstantial, or inadvertent action not taken in bad
faith and which the Company remedies promptly after receipt of
notice from the Executive;
(iii) any failure by the Company to
comply with and satisfy Section 5.3; or
(iv) any relocation of the
Executive’s principal office to a location more than fifty
(50) miles from the Executive’s principal office prior
to such relocation.
Section 2.18 “Good
Reason Notice” has
the meaning ascribed to such term in Section 3.3.
Section 2.19
“Incumbent Directors” means the members of the Board on the date of
adoption of this Plan, together with any person who hereafter
becomes a director of the Company and whose election or nomination
for election was approved by a vote of at least a majority of the
Incumbent Directors (including directors so appointed or elected by
Incumbent Directors) then on the Board (either by a specific vote
or by approval of the proxy statement of the Company in which such
person is named as a nominee for director); provided, however, that
no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest (as
described in Rule 14a-11 under the Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of
any person other than the Board, including by reason of any
agreement intended to avoid or settle any such election contest or
solicitation of proxies or consents, shall be deemed an Incumbent
Director.
Section 2.20 “Notice
of Termination” means a written notice that (i) indicates
the specific termination provision of Section 3 that is being
relied upon, (ii) to the extent applicable, reasonably
describes the facts and circumstances claimed to provide a basis
for termination under the provision so indicated, and
(iii) specifies the Termination Date; provided, however, that
the failure to describe in the Notice of Termination any fact or
circumstance constituting Good Reason or Cause shall not waive any
right of either party under this Plan or preclude either party from
asserting such fact or circumstance in enforcing rights under this
Plan.
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Section 2.21 A
“person” shall have the meaning ascribed by
Section 3(a)(9) of the Act and shall also mean a natural
person, company, government (and any political subdivision, agency,
or instrumentality of a government), corporation, partnership,
limited liability company, trust, unincorporated organization, or
other entity. When two or more persons act as a partnership,
limited partnership, syndicate, or other group for the purposes of
acquiring, holding, or disposing of Outstanding Company Common
Stock, such partnership, limited partnership, syndicate, or other
group shall be deemed a “person” for purposes of this
Plan.
Section 2.22
“Plan” means
this Change in Control Separation Benefit Plan of RAM Energy
Resources, Inc. and Participating Subsidiaries, as set forth herein
and as hereafter amended from time to time.
Section 2.23 “Section
409A” has the
meaning ascribed to such term in Section 4.4.
Section 2.24
“Separation Benefit” means the benefit provided for under this Plan
as determined under Section 4.2.
Section 2.25
“Separation from Service” me
