Exhibit 10.4

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

This Separation Agreement and General Release (this “Separation Agreement”) is
entered into by and between Saema Somalya, an individual (“Departing Executive”)
and Warren Resources, Inc., a Maryland corporation (the “Company”), effective as
of the Effective Date (as defined below).  Capitalized terms used and not
otherwise defined herein are used as defined in the Agreement (as defined
below).

 

WHEREAS, the Company and the Departing Executive are parties to that certain
Retention and Severance Agreement dated October 15, 2015 (the “Retention
Agreement”); and

 

WHEREAS, the benefits payable under the Retention Agreement are identical to
those that were payable under the Offer Letter dated December 24, 2013 between
Departing Executive and the Company (the “Offer Letter”);

 

WHEREAS, the Departing Executive departed employment with the Company, including
all positions as either an officer or director of the Company or any Company
subsidiary, effective December 31, 2015 (the “Separation Date”); and

 

WHEREAS, the Company seeks to obtain a release of all claims and also obtain
continuing obligations from Departing Executive regarding confidentiality,
non-competition, non-solicitation and non-disparagement in connection with the
Separation Date;

 

NOW THEREFORE, in consideration of the foregoing premises and certain other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Departing Executive and Company hereby mutually agree as follows:

 

1.                                      Status. On the Separation Date,
Departing Executive’s position as Senior Vice President, General Counsel, and
Corporate Secretary of the Company and as Director of various wholly owned
Company subsidiaries and any other appointments and offices held with the
Company, and any position with any third party organizations in which he
represented the Company, ended.

 

2.                                      Separation Benefits.  Provided Departing
Executive agrees to be bound by the continuing obligations set forth below and
executes this Separation Agreement in connection therewith, the Company agrees
to provide the Departing Executive with the following payments and benefits
(collectively, the “Separation Benefits”):

 

(a)                                 The Company shall pay to the Departing
Executive, in a lump-sum, an amount equal to $250,000, less all applicable
authorized and required deductions and withholdings. This amount shall be
payable within 14 days after the Effective Date (as defined below).

 

(b)                                 Provided Departing Executive elects to
continue his medical care coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”), the Company will pay the premiums associated with
such continued coverage on the first of each month commencing on January 1, 2016
and continuing until the earlier of (i) the date that the Departing Executive
becomes covered by the medical plan of a subsequent employer, (ii) the date he
is no longer eligible for continued medical coverage pursuant to COBRA, and
(iii) September 1, 2016 (inclusive).

 

3.                                      Accrued Obligations.  Departing
Executive acknowledges and agrees that the Company has paid him all amounts due
to him for accrued and unpaid obligations through his Separation Date, including
without limitation his accrued, but unpaid, base salary, accrued but unpaid
benefits and expenses.  Departing Executive acknowledges and agrees that he is
not due any compensation for unpaid salary, bonus, severance, incentive or
performance pay, unreimbursed and properly incurred business expenses, or
accrued or unused vacation time or vacation pay.

 

4.                                      No Other Payments.  Other than as
specifically provided by, or preserved under, the terms and conditions of this
Separation Agreement, Departing Executive will not be entitled to any other
payments or benefits from the Company. For the avoidance of doubt, there shall
be no accelerated vesting of any equity awards received by Departing Executive
prior to his Separation Date.  Notwithstanding the terms of any equity
compensation plan or related award agreement, Departing Executive acknowledges
that all unvested restricted stock, stock options and other equity compensation
awards were forfeited upon of the Separation Date and all vested stock options
shall expire after three months from the Separation Date.

 

5.                                      Departing Executive’s Release of Claims
and Continuing Obligations.  In consideration for the Separation Benefits and
other promises and covenants contained herein, Departing Executive agrees to the
following:

 

(a)                                 Release of Claims.

 

i.                                                        Departing Executive
represents that Departing Executive has not filed any complaints, charges or
lawsuits against the Company with any governmental agency or any court.

 

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ii.                                                     Departing Executive
expressly waives all claims against the Company and releases the Company, and
any of the Company’s past, present or future parent, affiliated, related, and/or
subsidiary entities (collectively with the Company, the “Company Entities”), and
all of the past and present directors, shareholders, officers, general or
limited partners, employees, agents, and attorneys, and agents and
representatives of such entities, and employee benefit plans in which Departing
Executive is or has been a participant by virtue of his employment with the
Company (collectively, the “Releasees”), from any claims that Departing
Executive may have against any Company Entity or the Releasees. It is understood
that this release includes, but is not limited to, any claims arising directly
or indirectly out of, relating to, or in any other way involving in any manner
whatsoever, (1) Departing Executive’s employment with any Company Entity or the
termination thereof or (2) Departing Executive’s status at any time as a holder
of any securities of the Company, including any claims for wages, stock or stock
options, employment benefits or damages of any kind whatsoever arising out of
the Agreement, any contracts, express or implied, any Company policy, any
covenant of good faith and fair dealing, express or implied, any legal
restriction on the Company’s right to terminate employment, or any federal,
state or other governmental statute or ordinance, including, without limitation,
the Employee Retirement Income Security Act of 1974, Title VII of the Civil
Rights Act of 1964, the federal Age Discrimination in Employment Act, the
Americans With Disabilities Act, the Family and Medical Leave Act, the Lilly
Ledbetter Fair Pay Act, the Genetic Information Non-Discrimination Act, the New
York Human Rights Law, the New York City Human Rights Law, all as amended, and
any other federal, state or local law (the “Release”). This Release specifically
includes, but is not limited to, any claims based upon the right to the payment
of wages, incentive and performance compensation, bonuses, vacation, stock
benefits or any other employee benefits, or any other rights arising under
federal, state or local laws prohibiting discrimination and/or harassment on the
basis of race, color, age, religion, sexual orientation, religious creed, sex,
national origin, ancestry, alienage, citizenship, nationality, mental or
physical disability, denial of family and medical care leave, medical condition
(including cancer and genetic characteristics), marital status, military status,
gender identity, harassment or any other basis prohibited by law provided,
however, notwithstanding anything to the contrary set forth herein, that this
Release shall not extend to (i) benefit claims under employee welfare benefit
plans for occurrences (e.g., medical care, death, or onset of disability)
arising after the Effective Date, (ii) Departing Executive’s rights to Severance
Benefits, provided he complies with his obligations herein; (iii) any claims
Departing Executive may have for indemnification pursuant to law, contract,
Company governance documents, or Company policy, (iv) any claims for coverage
under any applicable directors’ and officers’ insurance policy, or any other
applicable insurance policy, in accordance with the terms of such policy, or
(v) any claims arising from events that occur after the Effective Date.
Notwithstanding this release of liability, nothing in this Separation Agreement
prevents Departing Executive from filing any non-legally waivable claim
(including a challenge to the validity of this Agreement) with the Equal
Employment Opportunity Commission (“EEOC”) or comparable state or local agency
or participating in any investigation or proceeding conducted by the EEOC or
comparable state or local agency or cooperating with such agency; however,
Departing Executive understands and agrees that Departing Executive is waiving
any and all rights to recover any monetary or personal relief or recover as a
result of such EEOC or comparable state or local agency or proceeding or
subsequent legal actions

 

iii.                                                  Departing Executive
understands that the Release includes a release of claims arising under the Age
Discrimination in Employment Act (the “ADEA”). Departing Executive understands
and warrants that Departing Executive has been given up to thirty (30) days to
review and consider this Separation Agreement.  This Separation Agreement will
be effective on the date that Departing Executive signs the Separation Agreement
(such date, the “Effective Date”).

 

iv.                                                 Departing Executive fully
understands the final and binding effective of the Release contained herein and
other covenants of the Separation Agreement, including the waiver of all claims
under the ADEA.

 

(b)                                 Noncompetition.  During the period (the
“Restricted Period”) commencing on the Separation Date and ending on the first
anniversary of the Separation Date, the Departing Executive shall not,
(i) within ten (10) miles of any location in which, as of the Separation Date,
the Company owns Assets, directly or indirectly, own, manage, operate, control,
or participate in the ownership, management, operation or control of any
Business, provided that the Departing Executive’s ownership of securities of two
percent (2%) or less of any class of securities of a public company shall not,
by itself, be considered to be competition with the Company or any Affiliate;
(ii) acquire, offer to acquire, or agree to acquire, directly or indirectly, or
through his affiliate, by purchase or otherwise, voting securities or direct or
indirect right to acquire voting securities of the Company, that, together with
any Company securities then beneficially owned by Departing Executive on the
relevant date, or issuable upon Departing Executive’s exercise of equity awards
outstanding, would result in the aggregate beneficial ownership of him, or of
any entity that he directly or indirectly, owns, manages, operates, or controls,
or in which Departing Executive participates in the ownership, management,
operation or control, to equal 5% or more of the Company’s voting securities;
(iii) make or in any way participate, directly or indirectly, in any
“solicitation” of “proxies” to vote (as such terms are used in the rules and
regulations of the Securities and Exchange Commission), or seek to advise or
influence any person or entity with respect to the voting of any voting
securities of the Company; (iv) make any public announcement with respect to, or
submit a proposal for, or offer of (with or without conditions) any
extraordinary transaction involving the Company or any of its securities or
assets; or (v) form, join or in any way participate in a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, in
connection with any of the foregoing actions.  For purposes of this Separation
Agreement, “Business” shall mean the ownership of oil and/or gas assets, and
“Assets” means the Company’s oil

 

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and/or gas assets. While Departing Executive shall be subject to all
professional, ethical and other obligations relating to confidentiality and
preservation of the attorney-client privilege, attorney work product and other
applicable privileges and protections, nothing in this Section 5(b) or in
Section 5(c) below shall be interpreted (or enforced) to restrain Departing
Executive’s ability to provide legal services or otherwise practice law.

 

(c)                                  Nonsolicitation.  During the Restricted
Period the Departing Executive shall not, directly or indirectly, and any entity
to which Departing Executive is providing services shall not, directly or
indirectly, (i) employ, solicit for employment or otherwise contract for the
services of any individual who is or was an employee of the Company;
(ii) otherwise induce or attempt to induce any employee of the Company to leave
the employ of the Company, or in any way interfere with the relationship between
the Company any employee respectively thereof; or (iii) induce or attempt to
induce any customer, supplier, licensee or other business relation of the
Company or any Affiliate to cease doing business with the Company, or interfere
in any way with the relationship between any such customer, supplier, licensee
or business relation and the Company.

 

(d)                                 Non-Disclosure.  The Departing Executive
shall not (i) divulge, transmit or otherwise disclose, directly or indirectly,
other than in the regular and proper course of business of the Company, any
trade secrets or other confidential knowledge or information with respect to the
operations or finances of the Company or any Affiliates or with respect to
confidential or secret processes, services, techniques, customers or plans with
respect to the Company (all of the foregoing collectively hereinafter referred
to as, “Confidential Information”), or (ii) use, directly or indirectly, any
Confidential Information for the benefit of anyone other than the Company;
provided, however, that the Departing Executive has no obligation, express or
implied, to refrain from using or disclosing to others any such knowledge or
information which is or hereafter shall become available to the general public
other than through disclosure by the Departing Executive.  All Confidential
Information, new processes, techniques, know-how, methods, inventions, plans,
products, patents and devices developed, made or invented by the Departing
Executive, alone or with others, while an employee of the Company which are
related to the business of the Company and the Affiliates shall be and become
the sole property of the Company, unless released in writing by the Board, and
the Departing Executive hereby assigns any and all rights therein or thereto to
the Company. Nothing contained herein prohibits the Departing Executive from:
(i) disclosing Confidential Information when compelled to do so by law; (ii) 
making a good faith report of possible violations of applicable law to any
governmental agency or entity; or (iii) or making disclosures that are protected
under the whistleblower provisions of applicable law.

 

(e)                                  (d)                                
Nondisparagement. The Departing Executive shall not take any action to disparage
or criticize the Company or its respective employees, directors, owners or
customers or to engage in any other action that injures or hinders the business
relationships of the Company. The Company shall not take any action to disparage
or criticize the Executive or to engage in any other action that injures the
Executive’s reputation. Nothing contained in this Agreement or elsewhere shall
preclude Executive or the Company from enforcing his or its rights under this
Agreement, or from disclosing information in confidence to an attorney for the
purpose of seeking professional advice concerning this Agreement, his employment
with the Company or the termination thereof, or from responding truthfully to
subpoenas, court orders, requests for information from governmental entities.

 

(f)                                   Return of Company Property.  Departing
Executive acknowledges and agrees that all Confidential Information, files,
records, correspondence, memoranda, notes or other documents (including, without
limitation, those in computer-readable form) or property relating or belonging
to the Company, whether prepared by the Departing Executive or otherwise coming
into his possession in the course of his employment, is the exclusive property
of the Company.  Departing Executive represents that he has delivered to the
Company all such Confidential Information and Company property, and has not
retained any Confidential Information or Company property (including, without
limitations, any copies thereof).  However, nothing in this Agreement or
elsewhere shall preclude the Departing Executive from retaining, and using
appropriately, his rolodex (and electronic equivalents) or documents relating to
his personal entitlements and obligations.

 

(g)                                  Enforcement. The Departing Executive and
the Company each acknowledge that a breach of his/its covenants contained in
this Section 5 may cause irreparable damage to the other party, the exact amount
of which would be difficult to ascertain, and that the remedies at law for any
such breach or threatened breach would be inadequate. Accordingly, each party
agrees that if he/it breaches or threatens to breach any of the covenants
contained in this Section 5, in addition to any other remedy which may be
available at law or in equity, the other party shall be entitled to specific
performance and injunctive relief to prevent the breach or any threatened breach
thereof without bond or other security or a showing that monetary damages will
not provide an adequate remedy.

 

(h)                                 Scope of Covenants. The Company and the
Departing Executive further acknowledge that the time, scope, geographic area
and other provisions of this Section 5 have been specifically negotiated by
sophisticated commercial parties and agree that all such provisions are
reasonable under the circumstances of the activities contemplated by this
Separation Agreement. In the event that the agreements in this Section 5 shall
be determined by any court of competent jurisdiction to be unenforceable by
reason of their extending for too great a period of time or over too great a
geographical area or by reason of their being too extensive in any

 

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other respect, they shall be interpreted to and/or over the maximum geographical
area as to which they may be enforceable and/or to the maximum extent in all
other respects as to which they may be enforceable, all as determined by such
court in such action.

 

C

 

(i)                                     Prior to signing this Separation
Agreement, the Company advised the Departing Executive of his right to consult,
and has been given adequate time to review, his legal rights with his attorney
of choice.

 

(j)                                    Departing Executive has carefully read
and has voluntarily signed this Separation Agreement.

 

6.                                      Company Release of Claims. The Company,
on its behalf and on behalf of the Company Entities, waives (to the extent
permitted by applicable law) all claims that any Company Entity may have against
Departing Executive, and releases the Departing Executive from any claim that
any Company Entity may have against Departing Executive, provided, however, this
waiver and release in this Section 6 does not include any claims that any
Company Entity may have against Executive (i) arising out of or relating to
Departing Executive’s fraud, embezzlement, theft, or criminal conduct, which has
a material adverse effect on any Company Entity, (ii) relating to the
enforcement of this Separation Agreement, or (iii)  arising after the Effective
Date.

 

7.                                      Complete Agreement.  Company and
Departing Executive agree that this Separation Agreement sets forth all of the
promises and agreements between them with respect to the subject matter
described herein and supersedes all prior and contemporaneous agreements,
understandings, inducements or conditions, expressed or implied, oral or
written, except as herein contained, with respect to the subject matter
described herein.  In the event of Departing Executive’s death or a judicial
determination of his incapacity, references to the Departing Executive in this
Agreement shall be deemed, as appropriate, to be references to his heirs,
beneficiaries, estate, executor(s) or other legal representative(s).

 

8.                                      Cooperation.  Departing Executive agrees
that upon written request of the Company, he will make himself reasonably
available to cooperate with the Company, its subsidiaries and affiliates and any
of their officers, directors, shareholders, or employees in connection with any
investigation or review by the Company or any federal, state or local
regulatory, quasi-regulatory or self-governing authority as any such
investigation or review relates to events or occurrences that transpired while
Departing Executive was employed by the Company and in respect of which
Departing Executive has knowledge (collectively, “Cooperation”). Departing
Executive’s Cooperation may include, but not be limited to, being available to
meet with directors, officers or employees of the Company and/or the Company’s
counsel at mutually convenient times and locations, executing accurate and
truthful documents and taking such other actions as may reasonably be requested
by the Company and/or the Company’s counsel to effectuate the foregoing.
Departing Executive shall be entitled to reimbursement, upon receipt by the
Company of suitable documentation, for his reasonable out-of-pocket travel and
lodging expenses for such Cooperation.

 

9.                                      Changes to the Agreement.  This
Separation Agreement may not be amended or modified unless such amendments or
modifications are in writing and signed by Departing Executive and an authorized
representative of the Company.

 

10.                               Remedies.  If Departing Executive commits a
material breach of any of Departing Executive’s obligations under this
Separation Agreement, in addition to any other legal or equitable remedies it
may have for such breach, including the remedies in Section 5(f) above, the
Company shall be entitled to its attorneys’ fees incurred due to such breach and
shall have the right to terminate and recover the payments and benefits provided
to Departing Executive under this Separation Agreement.  The termination or
recovery of such payments or benefits in the event of Departing Executive’s
breach will not affect Departing Executive’s continuing obligations under this
Separation Agreement.  Notwithstanding the foregoing, this Section 9 will not
apply if Departing Executive files a claim seeking to invalidate the validity of
this Separation Agreement under the ADEA for failure to provide sufficient time
for review and revocation as required under this law.  For the avoidance of
doubt, any filing or assertion of any claim in violation of Section 5 or any
other provision of this Separation Agreement shall constitute a breach for
purposes of this Section.

 

11.                               Applicable Law.  This Agreement shall in all
respects, including all matters of construction, validity and performance, be
governed by, and construed and enforced in accordance with, the laws of the
State of New York, without regard to any rules governing conflicts of laws.

 

12.                               Jurisdiction.  The Departing Executive and the
Company each consents to jurisdiction in the United States District Court for
the Southern District of New York, or if that court is unable to exercise
jurisdiction for any reason, the Supreme Court of the State of New York, New
York County, for any suits, claims or actions concerning this Separation
Agreement and each waives any other requirement (whether imposed by statute,
rule of court, or otherwise) with respect to personal jurisdiction or service of
process and waives any objection to jurisdiction based on improper venue or
improper jurisdiction.

 

13.                               Severability.  If any provision of this
Separation Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision

 

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of this Separation Agreement or any action in any other jurisdiction, but this
Separation Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

 

14.                               No Waiver.  No delay or failure by any party
hereto in exercising, protecting, or enforcing any of its rights, titles,
interests, or remedies hereunder, and no course of dealing or performance with
respect thereto, shall constitute a waiver thereof. The express waiver by a
party hereto of any right, title, interest, or remedy in a particular instance
or circumstance shall not constitute a waiver thereof in any other instance or
circumstance. All rights and remedies shall be cumulative and not exclusive of
any other rights or remedies.

 

15.                               Counterparts.  This Separation Agreement may
be executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same instrument. 
Signatures delivered by facsimile (including, without limitation, by “pdf”)
shall be effective for all purposes.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on
the date set forth below; however, the same shall be effective as of the
Effective Date.

 

 

 

 

DEPARTING EXECUTIVE

 

 

 

 

 

 

 

 

/s/ Saema Somalya

Date:

December 31, 2015

 

Saema Somalya

 

 

 

 

 

 

 

 

WARREN RESOURCES, INC.

 

 

 

 

 

By

/s/ James A. Watt

 

 

 

Name:  James A. Watt

 

 

 

Title: President and Chief Executive Officer

 

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