Contents:

Employment Agreement – James A. Watt (1/31/2000) *

Amendment to Employment Agreement (9/22/2004)

Executive Severance Plan *

 

* The company has had employment contracts with the Chief Executive Officer, Chief Operating Officer, and two other executive officers. The company, although it will continue the employment of the officers with contracts, will not renew any employment contracts. On April 13, 2005, the Board of Directors upon recommendation of the Compensation Committee approved an Executive Severance Plan which covers the Chief Executive and Chief Operating Officers and an Employee Severance Plan which covers all other officers and employees. It is contemplated that the executive officers with employment contracts will either terminate their contracts early and be covered by the applicable severance plan, or remain under the contract until expiration. Upon expiration of their contract they begin coverage under the applicable severance plan.

 

 

 

 
                              EMPLOYMENT AGREEMENT
 
This Agreement entered into as of the 31st day of January, 2000 (the "Effective
Date"), by and between Remington Oil and Gas Corporation (the "Company") and
James A. Watt (the "Executive").
 
WHEREAS, the Company desires to employ the Executive and the Executive desires
to be employed by the Company in the capacities and for the term and
compensation and subject to the terms and conditions hereinafter set forth, and
 
WHEREAS, the Board of Directors of the Company (the "Board") has determined that
it is essential and in the best interest of the Company and its stockholders to
retain the services of the Executive especially in the event of a threat or
occurrence of a Change of Control and to ensure his continued dedication and
efforts in such event without undue concern for his personal financial and
employment security; and
 
WHEREAS, in order to induce the Executive to remain in the employ of the Company
particularly in the event of a threat or an occurrence of a Change in Control,
the Company desires to enter into this Agreement with the Executive to provide
the Executive with certain benefits during the term of his employment before and
after a Change of Control and to provide the Executive with the Gross-Up Payment
(as hereinafter defined).
 
NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, it is agreed as follows:
 
1.   TERM OF AGREEMENT. The Employment Term shall commence on the Effective Date
     and shall expire on the third anniversary of the Effective Date; provided,
     however, that on each anniversary of the Effective Date, the Employment
     Term shall be extended an additional one (1) year from such anniversary at
     the mutual written agreement of the Company and the Executive.
 
2.   EMPLOYMENT.
 
2.1  Subject to the provisions of Section 4 hereof, the Company agrees to
     continue to employ the Executive and the Executive agrees to remain in the
     employ of the Company during the Employment Term. During the Employment
     Term, the Executive shall be employed as the President and Chief Executive
     Officer of the Company or in such other senior executive capacity as may be
     mutually agreed to in writing by the parties. The Executive shall perform
     the duties, undertake the responsibilities and exercise the authority
     customarily performed, undertaken and exercised by persons situated in a
     similar executive capacity. He shall also promote, by entertainment or
     otherwise, the business of the Company.
 
2.2  During the Employment Term, excluding periods of vacation and sick leave to
     which the Executive is entitled, the Executive agrees to devote reasonable
     attention and time during normal business hours to the business and affairs
     of the Company to the extent necessary to discharge the responsibilities
     assigned to the Executive hereunder. The Executive may (1) serve on
     corporate, civil or charitable boards or committees, (2) manage personal
     investments, and (3) deliver lectures and teach at educational institutions
     or events so long as such activities do not significantly interfere with
     the performance of the Executive's duties hereunder. It is expressly
     understood and agreed that to the extent that any such activities have been
     conducted by the Executive prior to the Effective Date, the continued
     conduct of such activities (or the conduct of activities similar in nature
     and scope thereto) subsequent to the Effective Date shall not thereafter be
     deemed to interfere with the performance of the Executive's
     responsibilities to the Company.
 
3.   COMPENSATION
 
3.1  Base Salary. During the Employment Term, the Company agrees to pay or cause
     to be paid to the Executive an annual base salary of $270,000, and as may
     be increased from time to time at the discretion of the Board or its
 
 
 
 
     designee, the Compensation Committee of the Board (the "Compensation
     Committee"), (hereinafter referred to as the "Base Salary"). Such Base
     Salary shall be payable in accordance with the Company's customary
     practices applicable to its executives.
 
3.2  Bonus. In addition to the Base Salary, the Executive shall be eligible to
     receive an annual performance bonus (the "Bonus"). The amount of the Bonus
     shall be targeted at 50% of the Base Salary, provided, however, that the
     amount of the Bonus may be increased or decreased at the discretion of the
     Board or the Compensation Committee following consultation with the
     Executive. Each Bonus shall be paid no later than the end of the third
     month of the fiscal year next following the fiscal year for which the Bonus
     is awarded, unless the Executive shall elect to defer the receipt of such
     Bonus.
 
3.3  Benefits. During the Employment Term, the Executive shall be entitled to
     participate in all employee, executive or key-employee benefit or incentive
     compensation plans maintained or established by the Company for the purpose
     of providing compensation and/or benefits to employees, executives or key
     employees, generally, including without limitation, all pension,
     retirement, profit sharing, savings, stock option, deferred compensation,
     restricted stock grants, medical, hospitalization, dental, life or travel
     accident insurance plans. Unless otherwise provided herein, the
     compensation and benefits hereunder, and the Executive's participation in
     such plans, practices and programs shall be on the same basis and terms as
     applicable to the other eligible participants in the particular plan,
     practice or program. No additional compensation provided under any such
     plans shall be deemed to modify or otherwise affect the terms of this
     Agreement or any of the Executive's entitlements hereunder.
 
3.4  Vacation and Sick Leave. During the Employment Term, at such reasonable
     times as the Board shall in its discretion permit, the Executive shall be
     entitled, without loss of pay, to absent himself voluntarily from the
     performance of his employment under this Agreement, provided that: (1) the
     Executive shall be entitled to four (4) weeks of annual paid vacation; such
     vacation to be taken in accordance with the policies of the Company in
     regard to vacation, and (2) the Executive shall be entitled to sick leave
     (without loss of pay) in accordance with the Company's policies in effect
     from time to time.
 
3.5  Fringe Benefits, Perquisites and Expenses. During the Employment Term, the
     Executive shall be entitled to all fringe benefits and perquisites
     generally made available by the Company to its executives; provided,
     however, even if not provided to all executives by the Company, the Company
     shall provide the Executive with a membership in a luncheon or petroleum
     club, memberships in appropriate professional associations, and an
     automobile allowance in an amount deemed appropriate by the Board or the
     Compensation Committee. The Executive shall be entitled to receive prompt
     reimbursement of all expenses reasonably incurred by him in connection with
     the performance of his duties hereunder or for promoting, pursuing or
     otherwise furthering the business or interest of the Company.
 
4.   TERMINATION
 
4.1  During the Employment Term, the Executive's employment hereunder may be 
     terminated under the following circumstances:
 
(1)  Cause. The Company may terminate the Executive's employment for "Cause" by
     written notice to the Executive ("Notice of Termination"), which
     termination shall be effective upon the date of sending of such notice (the
     "Termination Date"), if the Executive, as determined by at least two-thirds
     (2/3rds) of the Board, not including the Executive who will not be entitled
     to vote on the issue in the event he is a member of the Board, (a) shall
     have been convicted of a felony or entered a plea of nolo contendre to a
     felony charge, (b) shall have been involved in any act of material fraud,
     theft, or other material misconduct detrimental to the best interests of
     the Company, (c) shall have engaged in gross negligence or willful
     misconduct with respect to his duties to the Company and as a result caused
     material harm to the Company, (d) shall have engaged in competitive
     behavior against the Company, misappropriated or aided in misappropriating
     a material opportunity of the Company, secured or attempted to secure a
     personal benefit not fully disclosed to and approved by a majority 
 
 
 
 
     of the Board in connection with any transaction of or on behalf of the
     Company, or (e) shall have failed to substantially perform his duties as
     set forth herein.
 
(2)  Disability. The Company may terminate the Executive's employment after
     having established the Executive's disability. For purposes of this
     Agreement, "Disability" means a physical or mental infirmity which impairs
     the Executive's ability to substantially perform his duties under this
     Agreement, which continues for a period of at least one hundred eighty
     (180) continuous days. The Executive shall be entitled to the compensation
     and benefits provided under this Agreement for any period during the
     Employment term and prior to the establishment of the Executive's
     Disability during which the Executive is unable to work due to a physical
     or mental infirmity. Notwithstanding anything contained in this Agreement
     to the contrary, until the Termination Date specified in the Notice of
     Termination (as each term is hereinafter defined) relating to the
     Executive's disability, the Executive shall be entitled to return to his
     position with the Company as set forth in this Agreement in which event no
     Disability of the Executive will be deemed to have occurred.
 
(3)  Good Reason. The Executive may terminate his employment for "Good Reason."
     For purposes of this Agreement, "Good Reason" shall mean the occurrence
     after a Change in Control of any of the following events or conditions
     described in Subsections (a) through (e) hereof: (a) any change in the
     Executive's title, position, duties or responsibilities that results in the
     Executive not having duties and responsibilities substantially equivalent
     to or greater than those the Executive had immediately prior to such
     change, (b) the assignment to the Executive of any duties or
     responsibilities which, in the Executive's reasonable judgment, are
     inconsistent with his status, title, position or responsibilities, (c) any
     removal of the Executive from or failure to reappoint or reelect him to any
     of such offices or positions, except in connection with the termination of
     his employment for Disability, Cause, as a result of his death, or by the
     Executive other than for Good Reason, (d) a reduction in the Executive's
     Base Salary, Bonus or any failure to pay the Executive any compensation or
     benefits to which he is entitled within ten (10) days of the date due, or
     (e) the Executive is required to perform a substantial portion of his
     duties and responsibilities required hereunder outside the Dallas/Fort
     Worth metropolitan area.
 
4.2  Upon termination of the Executive's employment during the Employment Term, 
     the Executive shall be entitled to the following benefits:
 
(1)  If the Executive's employment with the Company is terminated (a) by the
     Company for Cause or Disability, (b) by reason of the Executive's death, or
     (c) by the Executive other than for Good Reason, the Company shall pay the
     Executive all amounts earned or accrued through the Termination Date,
     including Base Salary, reimbursement for reasonable and necessary expenses
     incurred by the Executive on behalf of the Company during the period ending
     on the Termination Date, and all unpaid accumulated and accrued benefits
     due under any benefit plan or program in which the Executive was a
     participant in accordance with the terms and conditions of such plan or
     program ("Accrued Compensation"). In addition to the foregoing, if the
     Executive's employment is terminated by the Company for Disability or by
     reason of the Executive's death, the Company shall pay the Executive or his
     beneficiaries an amount equal to his Bonus multiplied by a fraction the
     numerator of which is the number of days in such fiscal year through the
     Termination Date and the denominator of which is 365 ("Pro-Rata Bonus").
     The Executive's entitlement to any other compensation or benefits shall be
     determined in accordance with the Company's employee benefit plan,
     including stock option plans, and other applicable programs and practices
     then in effect.
 
(2)  If the Executive's employment is terminated by the Company for reasons
     other than change of control, Cause, Disability, or by reason of the
     Executive's death, the Executive will be entitled to the following: (a) the
     Company shall pay the Executive all Accrued Compensation and a Pro Rata
     Bonus, (b) the Company shall pay the Executive as severance pay and in lieu
     of any further compensation for periods subsequent to the Termination Date,
     in a single payment, an amount in cash equal to one (1) times the sum of
     the Executive's then current Base Salary, (c) the Company shall provide the
     Executive twelve (12) months of out placement services at the Company's
     sole expense, (d) for a term of one (1) year following the Termination
     Date, or until the Executive gains new employment with substantially
     similar benefits, the Company, at its expense, shall provide the Executive
     and his immediate family the same level of health benefits, including,
     without limitation, medical, dental, disability, and life insurance,
     provided the Executive and his immediate family at any time 
 
 
 
 
     within six (6) months of the Termination Date, and (e) all stock options
     granted the Executive will be immediately vested in accordance with any
     stock option agreements between the Executive and the Company currently in
     effect at the Termination Date.
 
(3)  If the Executive's employment is terminated by the Company within
     twenty-four (24) months after a change of control for reasons other than
     Cause, Disability, by reason of the Executive's death; or if the Executive
     terminates his employment with the Company for Good Reason, the Executive
     will be entitled to the following: (a) the Company shall pay the Executive
     all Accrued Compensation and a Pro Rata Target Bonus, (b) the Company shall
     pay the Executive as severance pay and in lieu of any further compensation
     for periods subsequent to the Termination Date, in a single payment, an
     amount in cash equal to two and ninety-nine one hundredths percent (2.99%)
     times the sum of (i) the Executive's then current Base Salary and (ii) the
     Targeted Bonus (not subject to reduction), (c) the Company shall provide
     the Executive twelve (12) months of out placement services at the Company's
     sole expense, (d) for a term of three (3) years following the Termination
     Date, or until the Executive gains new employment with substantially
     similar benefits, the Company, at its expense, shall provide the Executive
     and his immediate family the same level of health benefits, including,
     without limitation, medical, dental, disability, and life insurance,
     provided the Executive and his immediate family at any time within six (6)
     months of the Termination Date, and (e) all stock options granted the
     Executive will be immediately vested in accordance with any stock option
     agreements between the Executive and the Company currently in effect at the
     Termination Date.
 
4.3  The amounts provided for in Sections 4.2(1) and 4.2(2) of this Agreement
     shall be paid within five (5) working days after the Executive's
     Termination Date.
 
4.4  The Executive shall not be required to mitigate the amount of any payment
     provided for in this Agreement by seeking other employment or otherwise and
     no such payment shall be offset or reduced by the amount of any
     compensation or benefits provided the Executive in any subsequent
     employment except as provided in Section 4.2(2)(d).
 
4.5  The severance pay and benefits provided for in Sections 4.2(1) and 4.2(2)
     of this Agreement shall be in lieu of any other severance pay to which the
     Executive may be entitled under any Company severance plan, program or
     arrangement.
 
4.6  As used in this Agreement, the term "Change of Control" shall have the same
     meaning as ascribed to it in the Company's 1997 Stock Option Plan (Exhibit
     A) or as amended from time to time.
 
5.   EXCISE TAX PAYMENTS
 
5.1  In the event that any payment or benefit (within the meaning of Section
     280G of the Internal Revenue Code of 1986, as amended (the "Code") to the
     Executive or for his benefit paid or payable pursuant to the terms of this
     Agreement or otherwise arising out of his employment with the Company, or a
     change of ownership or effective control of the Company or of a substantial
     portion of its assets (a "Payment" or "Payments"), would be subject to
     excise tax imposed by Section 4999 of the Code or any interest or penalties
     are incurred by the Executive with respect to such excise tax (such excise
     tax, together with any such interest or penalties, are hereinafter
     collectively referred to as the "Excise Tax"), then the Executive will be
     entitled to receive an additional payment (the "Gross-Up Payment") in an
     amount such that after payment by the Executive of all applicable taxes,
     interest and penalties (other than interest and penalties due to the
     Executive's failure to timely file a tax return or pay taxes shown on his
     return) including any Excise Tax imposed upon the Gross-Up Payment, the
     Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
     imposed upon the Payments.
 
5.2  The Company shall bear any expense necessary in determining whether a
     Gross-Up Payment is required pursuant to this Agreement. The Gross-Up
     Payment, if any, shall be paid by the Company to the Executive within five
     days of the Company's receipt of a determination from any accounting firm
     satisfactory to the Executive that such Gross-Up Payment is required.
 
 
 
 
6.   CONFIDENTIAL INFORMATION. The Executive acknowledges and agrees that he 
     will not, without the prior written consent of the Company, at any time
     during the Employment Term or for a period of three (3) years thereafter,
     except as may be required by any competent legal authority, use or disclose
     to any person, firm or other legal authority, any confidential records,
     secrets or information related to the Company or any of its subsidiaries.
     The Executive acknowledges and agrees that all information and secrets of
     the Company and/or its subsidiaries that he has acquired or may acquire,
     were received, or will be received in confidence and as a fiduciary of the
     Company. The Executive will exercise utmost diligence to protect and guard
     such information and secrets.
 
7.   SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall 
     inure to the benefit of the Company, its successors and assigns and the
     Company shall require any successor or assign to expressly 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. The term "Company" as used herein shall include
     such successors and assigns. The term "successors and assigns" as used
     herein shall mean a corporation or other entity acquiring all or
     substantially all the assets and the business of the Company (including
     this Agreement) whether by operation of law or otherwise. Neither this
     Agreement nor any right or interest hereunder shall be assignable or
     transferable by the Executive, his beneficiaries or legal representatives,
     except by will or by the laws of descent or distribution. This Agreement
     shall inure to the benefit of and be enforceable by the Executive's legal
     personal representative.
 
8.   NOTICE. For purposes of this Agreement, notices and all other
     communications provided for in this Agreement (including the Notice of
     Termination) shall be in writing and shall be deemed to have been duly
     given when personally delivered or sent certified mail, return receipt
     requested, postage prepaid, addressed to the respective addresses last
     given by each party to the other, provided, that all notices to the Company
     shall be directed to the Board with a copy to the Secretary of the Company.
 
9.   NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit
     the Executive's continuing or future participation in any benefit, bonus,
     incentive or other plan or program provided by the Company or any of its
     subsidiaries and for which the Executive may qualify, nor shall anything
     herein limit or reduce such rights as the Executive may have under any
     other agreements with the Company or its subsidiaries. Amounts which are
     vested benefits or which the Executive is otherwise entitled to receive
     under any plan or program of the Company or any of its subsidiaries shall
     be payable in accordance with such plan or program, except as explicitly
     modified by this Agreement.
 
10.  SETTLEMENT OF CLAIMS. The Company's obligation to make the payments
     provided for in this Agreement and otherwise to perform its obligations
     hereunder shall not be affected by any circumstances, including without
     limitation, any set-off, counterclaim, defense, recoupment, or other right
     which the Company may have against the Executive or others.
 
11.  MISCELLANEOUS. No provision of this Agreement may be modified, waived or 
     discharged unless such waiver, modification or discharge is agreed to in
     writing and signed by the Executive and the Company.
 
12.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND 
     ENFORCED IN ACCORDANCE THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
     EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
 
13.  SEVERABILITY. The provisions of this Agreement shall be deemed severable 
     and the invalidity or unenforceability of any provision shall not affect
     the validity or enforceability of the other provisions hereof.
 
14.  WAIVER OF DEFAULT. Any waiver by either party of a breach of any provision 
     in this Agreement shall not operate as or be construed as a waiver of any
     subsequent breach thereof.
 
 
 
 
15.  ENTIRE AGREEMENT. This Agreement represents the entire agreement between 
     the parties with respect to the subject matter hereof and supersedes any
     and all prior agreements and understandings with respect to such subject
     matter.
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
 
 
 
                                            Remington Oil and Gas Corporation
 
 
                                            By:
                                                --------------------------------
                                            Title:
                                                  ------------------------------
 
 
                                            Executive:
 
 
                                            ------------------------------------
                                            James A. Watt
 
 
 
 
 
 
                                    EXHIBIT A
 
         A "Change of Control" shall mean any of the following events:
 
         (i) a merger or consolidation to which the Company is a party if the
individuals and entities who were stockholders of the Company immediately prior
to the effective date of such merger or consolidation have beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total
combined voting power for election of directors of the surviving corporation
following the effective date of such merger or consolidation;
 
         (ii) the acquisition or holding of direct or indirect beneficial
ownership (as defined under Rule 13d-3 of the Exchange Act) of securities of the
Company representing in the aggregate 30% or more of the total combined voting
power of the Company's then issued and outstanding voting securities by any
person, entity or group of associated persons or entities acting in concert,
other than S-Sixteen Holding Company, any employee benefit plan of the Company
or of any subsidiary of the Company, or any entity holding such securities for
or pursuant to the terms of any such plan, beginning from and after such time as
S-Sixteen Holding Company shall no longer have direct or indirect beneficial
ownership (as so defined) of securities of the Company representing in the
aggregate a larger percentage of the total combined voting power of the
Company's then issued and outstanding securities than that held by any other
person, entity or group;
 
         (iii)    the sale of all or substantially all of the assets
of the Company to any person or entity that is not a wholly owned
subsidiary of the Company; or
 
         (iv) the approval by the stockholders of the Company of any plan or
proposal for the liquidation of the Company or its material subsidiaries, other
than into the Company.
 
 

 

 

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AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement entered into as of September 22, 2004, (the “Effective Date”), by and between Remington Oil and Gas Corporation (the “Company”) and                      (the “Executive”).

WHEREAS, the Company entered into an employment agreement with the Executive effective                      (the “Employment Agreement”);

WHEREAS, as a result of extensions, the term of the Employment Agreement is set to expire on                     ;

WHEREAS, Paragraph 4.2(3) of the Employment Agreement sets forth the Executive’s benefits should the Executive terminate his employment with the Company for Good Reason or his employment is terminated within 24 months of a Change of Control;

WHEREAS, it was the intent of the Compensation Committee and the Board of Directors of the Company at the time of execution of the Employment Agreement that upon the Executive’s termination of employment for the reasons covered in Paragraph 4.2(3) of the Employment Agreement, the Executive shall, among other things, be entitled, to 2.99 times the sum of his then current Base Salary and the Targeted Bonus (not subject to reduction);

WHEREAS, Paragraph 4.2(3) of the Employment Agreement as executed makes reference to the terms “two and ninety-nine one hundredths percent” and “(2.99%)” that are inconsistent with the intent of the Employment Agreement; and

WHEREAS, the Compensation Committee of the Board wishes to clarify through this Amendment to Employment Agreement that upon termination of the Executive’s employment under the conditions contained in Paragraph 4.2(3), the Executive shall, among other things, be entitled to 2.99 times the sum of his then current Base Salary and the Targeted Bonus (not subject to reduction).

NOW, THEREFORE, in consideration of the agreements of the parties contained herein, it is agreed as follows:

1.

 

Paragraph 4.2(3) of the Employment Agreement, as amended, is hereby amended to read in subpart (b) as follows:

 

 

 

The Company shall pay the Executive as severance pay and in lieu of any further compensation for periods subsequent to the Termination Date, in a single payment, an amount in cash equal to 2.99 times the sum of (i) the Executive’s then current Base Salary and (ii) the Targeted Bonus (not subject to reduction),

 

 


 

2.

 

This Amendment to Employment Agreement amends no other terms and provisions of the Employment Agreement and such terms and provisions remain in full force and effect.

 

3.

 

All capitalized terms contained but not defined herein shall have the meaning assigned in the Employment Agreement, as amended.

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to Employment Agreement as of the Effective Date.

REMINGTON OIL AND GAS CORPORATION

By:                                                                        

Executive:

                                                                             

 

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REMINGTON OIL AND GAS CORPORATION

EXECUTIVE SEVERANCE PLAN

 


 

I.
DEFINITIONS AND CONSTRUCTION

      1.1 Definitions. Where the following words and phrases appear in the Plan, they shall have the respective meanings set forth below, unless their context clearly indicates to the contrary.

      (a) “Base Salary” shall mean the annual rate of base compensation paid by the Company to a Covered Employee (including amounts which the Covered Employee could have received in cash had he not elected to contribute to an employee benefit plan maintained by the Company), excluding overtime pay, bonuses, employee benefits, automobile allowances, added premiums, differentials, and all forms of incentive compensation. Base Salary shall be determined effective as of the date of the Covered Employee’s termination of employment date.

      (b) “Change of Control” shall be deemed to have occurred upon any of the following events:

      (1) A merger or consolidation to which the Company is a part if the individuals and entities who were stockholders of the Company immediately prior to the effective date of such a merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total combined voting power for election of directors of the surviving corporation following the effective date of such merger or consolidation;

      (2) The acquisition or holding of direct or indirect beneficial ownership (as defined under Rule 13d-3 of the Exchange Act) of securities of the Company representing the aggregate 30% or more of the total combined voting power of the Company’s then issued and outstanding voting securities by any person, entity or group of associated persons or entities acting in concert, other than an employee benefit plan of the Company or of any subsidiary of the Company, or any entity holding such securities for or pursuant to the terms of any such plan. The Directors may, by a majority vote, determine the acquisition of 30%-49.9% is not a hostile action and therefore does not trigger a change of control.

      (3) The sale of all or substantially all of the assets of the Company to any person or entity that is not a wholly owned subsidiary of the Company; or

      (4) The approval by the stockholders of the Company of any plan or proposal for the liquidation of the Company or its material subsidiaries, other than into the Company.

      (c) “Code” means the Internal Revenue Code of 1986 as amended.

      (d) “Committee” shall mean the committee appointed by the Company to administer the Plan.

 


 

      (e) “Covered Employee” shall mean the Chairman and CEO of the Company and the President and COO of the Company.

      (f) “Effective Date” shall mean January 1, 2005.

      (g) “Company” shall mean Remington Oil and Gas Corporation.

      (h) “Directors” shall mean the Board of Directors of the Company.

      (i) “Disability” shall mean a physical or mental infirmity that impairs the Covered Employee’s ability to substantially perform the Covered Employee’s duties, which continues for a period of at least one hundred eighty (180) continuous days.

      (j) “Good Reason” shall mean the occurrence of any of the following events or conditions: (1) a reduction in the Covered Employee’s Base Salary or bonus opportunity (2) a material reduction in benefits without substitution of benefits that are substantially comparable in the aggregate or that is not applicable to employees generally; (3) any change in the Covered Employee’s duties or responsibilities that results in the Covered Employee not having duties and responsibilities substantially equivalent to or greater than those the Covered Employee had immediately prior to such change; or (4) the permanent relocation of a Covered Employee’s principal place of employment with the Company to a location that is more than 40 miles from such Covered Employee’s prior principal place of employment. Notwithstanding the foregoing, any change in the Covered Employee’s duties and responsibilities that is required by applicable law or governmental regulation shall not constitute “Good Reason.”

      (k) “Involuntary Termination” shall mean any termination, on or after the Effective Date, of a Covered Employee’s employment with the Company which does not result from a voluntary resignation or retirement by the Covered Employee; provided, however, the term “Involuntary Termination” shall not include:

      (1) a Termination for Cause;

      (2) a termination as a result of the Covered Employee’s death;

      (3) any termination as the result of the Covered Employee’s Disability; or

      (4) a termination by the Covered Employee for Good Reason.

      (l) “Plan” shall mean the Remington Oil and Gas Corporation Executive Severance Plan.

      (m) “Termination for Cause” shall mean any termination of a Covered Employee’s employment with the Company by reason of the Covered Employee’s (1) conviction of any felony or entering a plea of nolo contendre to a felony charge, (2) involvement in any act of material fraud, theft, or other material misconduct detrimental to the best interests of the Company, (3) engagement in gross negligence or willful

2


 

misconduct with respect to his duties to the Company and as a result caused material harm to the Company, (4) engagement in competitive behavior against the Company, misappropriated or aided in misappropriating a material opportunity of the Company, secured or attempted to secure a personal benefit not fully disclosed to and approved by a majority of the Board of Directors of the Company in connection with any transition of or on behalf of the Company, or (5) failure to substantially perform his duties.

II.
SEVERANCE BENEFITS

      2.1 Severance Benefits. Subject to the provisions of Section 2.2 hereof, if a Covered Employee’s employment by the Company is terminated and such Covered Employee is not entitled to severance benefits under an individual contract, agreement or arrangement, or if such Covered Employee waives his rights to any severance benefits to which he may be entitled under an individual contract, agreement or arrangement, then the Covered Employee shall be entitled to severance benefits as provided in this Section 2.1. A Covered Employee’s entitlement to severance benefits under the Plan depends upon the circumstance of the Covered Employee’s termination of employment. Upon termination of the Covered Employee’s employment, the Covered Employee shall be entitled to severance benefits as follows:

         (1) If the Covered Employee’s employment with the Company is terminated by reason of the Covered Employee’s death or Disability, the Company shall pay the Covered Employee’s accrued Base Salary through the termination date and, in addition thereto, an amount equal to the Covered Employee’s target bonus multiplied by a fraction, the numerator of which is the number of days in such plan year through termination date and the denominator of which is 365.

         (2) If the Covered Employee’s employment with the Company is subject to an Involuntary Termination or is terminated by the Covered Employee for Good Reason and termination is not in connection with a Change of Control, the Covered Employee shall be entitled to the following: (a) the Company shall pay the Covered Employee a lump sum cash payment, as soon as administratively feasible after the Covered Employee’s termination, in an amount equal to 2 times the sum of (i) the Covered Employee’s then current Base Salary and (ii) the Covered Employee’s average annual incentive bonus paid during the last three years, (b) all stock options, restricted stock and other equity compensation awards granted the Covered Employee shall be subject to the terms of the grant agreement, other signed agreements and plan under which they were granted (c) for a term of two (2) years following the termination date, or until the Covered Employee gains new employment with substantially similar benefits, the Company, at its expense, shall provide the Covered Employee and his or her immediate family substantially the same level of group medical and dental benefits as provided to the Company’s active employees during such period, (d) the Company shall provide the Covered Employee twelve (12) months of out placement services at the Company’s sole expense, and (e) all non-qualified deferred compensation benefits of the Covered Employee shall become immediately vested and subject to an immediate distribution; provided, however, that if the Covered Employee is a key employee (as defined in section 416(i) of the Code without regard to paragraph (5) thereof) of the Company and the Company’s stock is publicly traded on an

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established securities market or otherwise, then any amounts described above which are “deferred compensation” under section 409A of the Code shall not be paid or commence until the date that is six (6) months after the termination date. The provision of group medical and dental benefits shall start and run concurrently with any continuation coverage as may be elected by the Covered Employee under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).

         (3) If the Covered Employee’s employment with Company is subject to an Involuntary Termination within three months prior to or two (2) years after a Change of Control; or if the Covered Employee terminates his employment with the Company for Good Reason within three months prior to or two years after a Change of Control, the Covered Employee shall be entitled to the following: (a) the Company shall pay the Covered Employee a lump sum cash payment, within a reasonable period of time after the Covered Employee’s termination, in an amount equal to 2.99 times the sum of (i) the Covered Employee’s then current Base Salary and (ii) the Covered Employee’s maximum annual incentive opportunity, (b) all stock options, restricted stock and other equity compensation awards granted the Covered Employee shall be subject to the terms of the grant agreement and plan under which they were granted, (c) for a term of three (3) years following the termination date, or until the Covered Employee gains new employment with substantially similar benefits, the Company, at its expense, shall provide the Covered Employee and his or her immediate family the same level of group medical and dental benefits as provided to the Company’s active employees during such period, (d) the Company shall provide the Covered Employee twelve (12) months of out placement services at the Company’s sole expense, and (e) all non-qualified deferred compensation benefits of the Covered Employee shall be immediately vested and subject to an immediate distribution; provided, however, that if the Covered Employee is a key employee (as defined in section 416(i) or the Code without regard to paragraph (5) thereof) of the Company and the Company’s stock is publicly traded on an established securities market or otherwise, then any amounts described above which are “deferred compensation” under section 409A of the Code shall not be paid or commence until the date that is six (6) months after the termination date. The provision of group medical and dental benefits shall start and run concurrently with any continuation coverage as may be elected by the Covered Employee under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).

         2.2 Other Severance Arrangements. Severance payments provided herein shall be subject to any required tax withholding. If a Covered Employee is entitled to severance benefits under an individual contract, agreement or arrangement and does not waive such entitlement to severance benefits under such contract, agreement or arrangement, such Covered Employee shall not be entitled to any severance benefits pursuant to the Plan but shall instead be entitled to severance benefits in such amount and form as are provided pursuant to the terms of such contract, agreement or arrangement (which contract, agreement or arrangement is hereby incorporated by reference and made a part of this Plan).

         2.3 Release, Full Settlement and Resignation. As a condition to the receipt of any severance benefits hereunder, the Company, in its sole discretion, may require a Covered Employee whose employment by the Company has been terminated to first execute a release, in the form established by the Company, releasing the Company, its shareholders, partners, officers, directors, employees, attorneys and agents from any and all claims and from any and all causes

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of action of any kind or character, including but not limited to all claims or causes of action arising out of such Covered Employee’s employment with the Company or the termination of such employment, and the performance of the Company’s obligations hereunder and the receipt of the benefits provided hereunder by such Covered Employee shall constitute full settlement of all such claims and causes of action. The Covered Employee shall resign from his position on the Board of Directors, if any, effective as of his employment termination date.

         2.4 Excise Tax Payments. In the event that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) made or provided to or for the benefit of a Covered Employee in connection with this Agreement, or Covered Employee’s employment with Company or the termination thereof (the “Payments”) are determined to be subject to the excise tax imposed by Sections 409A or 4999 of the Code or any interest or penalties with respect to such excise taxes (such excise taxes, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) from Company such that the net amount received by the Employee after paying any applicable Excise Tax and any federal, state or local income or FICA taxes on such Gross-Up Payment, shall be equal to the amount the Employee would have received if such Excise Tax were not applicable to the Payments. All determinations of the Excise Tax and Gross-Up Payment, if any, shall be made by tax counsel acceptable to the Employee. For purposes of determining the amount of the Gross-Up Payment, if any, the Employee shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the total Payments are made and State and local income taxes at the highest marginal rate of taxation in the State and locality of the Employee’s residence on the date the total Payments are made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such State and local taxes. In the event that the Excise Tax is determined by the IRS, on audit or otherwise, to exceed the amount taken into account hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make another Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Employee with respect to such excess) within the ten (10) business days immediately following the date that the amount of such excess is finally determined. The Employee and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the total Payments. The Gross-Up Payments provided to the Employee shall be made not later than the tenth (10th) business day following the last date the Payments are made.

         2.5 Confidential Information. In consideration of the receipt of severance benefits hereunder, the Covered Employee may not, without the prior written consent of the Company, for a period of three (3) years following the Covered Employee’s termination date, except as may be required by any competent legal authority, use or disclose to any person, firm or other legal authority, any confidential record, secret or information related to the Company or any of its subsidiaries.

         2.6 Covenant Against Competition. In consideration of the receipt of severance benefits hereunder, for a period of one (1) year following the Covered Employee’s termination date where Involuntary Termination has occurred without a Change of Control, the Covered

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Employee shall not have any interest in or be engaged by any business or enterprise that is in the business of exploring for, developing, or producing hydrocarbons in specific areas where the Company has interest at the time of the Covered Employee’s termination. Company interest shall be deemed an area within a two (2) mile radius from the current owned acreage, offshore block, concession or active prospect area. For purposes of this Section, the Covered Employee shall be deemed to have an “interest in or be engaged by a business or enterprise” if the Covered Employee acts (a) individually, (b) as a partner, officer, director, shareholder, employee, associate, agent or owner of an entity, or (c) as an advisor, consultant, leader or other person related directly or indirectly, to any business or entity that is engaging in, or is planning to engage in, exploring for, developing, or producing hydrocarbon in specific areas where the Company has interests (“the Prohibited Activity”). Ownership of less than five percent (5%) of the outstanding capital stock of a publicly traded entity that engages in any Prohibited Activity shall not be in violation of this Section.

         2.7 Non-Solicitation. In consideration of receipt of any severance benefits hereunder, for a period of one (1) year following the Covered Employee’s termination date, the Covered Employee may not, directly or indirectly, in any manner or capacity induce any person, to discontinue his or her employment in the Company or the Company’s successor or to interfere with the business of the Company or the Company’s successor.

         2.8 Liquidated Damages. If a Covered Employee who has received severance benefits pursuant to Section 2.1 above is found by the Committee to be in violation of the confidentiality, non-competition, and/or non-solicitation provisions as described in Sections 2.5, 2.6, and 2.7 above, then the Covered Employee shall be required to pay to the Company as liquidated damages the full amount of severance received by the Covered Employee pursuant to Section 2.1. Any payment required pursuant to this Section shall be due and payable in a single lump sum within 30 days of written notice to such Covered Employee of such Committee’s finding.

         2.9 Mitigation. A Covered Employee shall not be required to mitigate the amount of any payment provided for in this Article II by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Article II be reduced by any compensation or benefit earned by the Covered Employee as the result of employment by another employer or by retirement benefits.

III.
ADMINISTRATION OF PLAN

      3.1 Plan Administration. For the purposes of the Plan and the Employee Retirement Income Security Act of 1974, as amended, the plan administrator and named fiduciary of the Plan is the Committee. The Committee shall hold such meetings and establish such rules and procedures as may be necessary to enable it to discharge its duties hereunder. All actions of the Committee shall be recorded by a secretary who need not be a Committee member. The Committee shall have all powers necessary or proper to administer the Plan and to discharge its duties under the Plan, including, but not limited to, the following powers:

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      (a) To make and enforce such rules and regulations as it may deem necessary or proper for the orderly and efficient administration of the Plan;

      (b) To interpret the Plan, its interpretation thereof in good faith to be final and conclusive on all persons claiming benefits under the Plan;

      (c) To authorize the payment of benefits under the Plan;

      (d) To prepare and distribute information explaining the Plan;

      (e) To appoint or employ persons to assist in the administration of the Plan; and

      (f) To obtain such information as is necessary for the proper administration of the Plan.

The Committee may allocate to others certain aspects of the management, operation and responsibilities of the Plan, including the employment of advisors and the delegation of any ministerial duties or functions to qualified individuals. The Company agrees to indemnify the members of the Committee against all liabilities, damages, costs and expenses (including attorneys’ fees and amounts paid in settlement of any claims approved by the Company) occasioned by any act or omission to act in connection with the Plan if such act or omission was in good faith.

      3.2 Claims Review. For claims arising after a Change of Control, the Covered Employee shall not be required to follow the Plan’s claim procedures as set forth in this Section, instead the Covered Employee shall be deemed to have satisfied his administrative remedies if the Covered Employee pursues any claim in court. For all other claims, the following claims procedures will apply. The Committee will advise each Covered Employee of any Plan benefits to which the Covered Employee is entitled. If the Covered Employee believes that the Committee has failed to advise him or her of any Plan benefits to which he or she is entitled, then the Covered Employee may file a written claim with the Committee. The Committee shall review such claim and respond thereto within a reasonable time after receiving the claim. In any case in which a Covered Employee’s claim for Plan benefits is denied or modified, the Committee shall:

      (a) state the specific reason for the denial or modification;

      (b) provide specific reference to pertinent Plan provisions on which the denial or modification is based;

      (c) provide a description of any additional material or information necessary for the Covered Employee or his representative to perfect the claim and an explanation of why such material or information is necessary; and

      (d) explain the Plan’s claim review procedure as contained herein.

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In the event the request is denied or modified, if the Covered Employee or his representative desires to have such denial or modification reviewed, he must, within sixty days following receipt of the notice of such denial or modification, submit a written request for review by the Committee of its initial decision. Within sixty days following such request for review the Committee shall render its final decision in writing to the Covered Employee or his representative stating specific reasons for such decision. If special circumstances require an extension of such sixty-day period, the Committee’s decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If an extension of time for review is required, written notice of the extension shall be furnished to the Covered Employee or representative prior to the commencement of the extension period.

IV.
GENERAL PROVISIONS

      4.1 Funding. The benefits provided herein shall be unfunded and shall be provided from the Company’s general assets.

      4.2 Cost of Plan. The entire cost of the Plan shall be borne by the Company and no contributions shall be required of the Covered Employees.

      4.3 Amendment and Termination. The Plan may be amended from time to time, or terminated and discontinued, at any time, in each case at the discretion of the Directors; provided, however, that the Plan may not be amended or terminated within two years after a Change of Control or in any manner that would negatively affect a Covered Employee’s rights under the Plan without the consent of such Covered Employee so affected. Notwithstanding the foregoing, the Plan may amended at any time as may be necessary to avoid adverse tax consequences under section 409A of the Code to any Covered Employee.

      4.4 Not Contract of Employment. The adoption and maintenance of the Plan shall not be deemed to be a contract of employment between the Company and any person or to be consideration for the employment of any person. Nothing herein contained shall be deemed to give any person the right to be retained in the employ of the Company or to restrict the right of the Company to discharge any person at any time nor shall the Plan be deemed to give the Company the right to require any person to remain in the employ of the Company or to restrict any person’s right to terminate his employment at any time.

      4.5 Severability. Any provision in the Plan that is prohibited or unenforceable in any jurisdiction by reason of applicable law shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

      4.6 Nonalienation. Covered Employees shall not have any right to pledge, hypothecate, anticipate or assign benefits or rights under the Plan, except by will or the laws of descent and distribution, or as may be required pursuant to a domestic relations order.

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      4.7 Governing Law. The Plan shall be interpreted and construed in accordance with the laws of the State of Texas except to the extent preempted by federal law.

      IN WITNESS WHEREOF, the Company has executed this Plan this ___day of ___, 2005.

 

 

 

 

 

 

REMINGTON OIL AND GAS CORPORATION


By                                                                                
 

 

 

 

 

 

 

 

 

 

 

 

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