Exhibit 10.5

 

PATINA OIL & GAS CORPORATION

 

AMENDED AND RESTATED

CHANGE IN CONTROL PLAN

 

This Amended and Restated Change in Control Plan (the “Plan”), effective as of
September 14, 2004, is adopted by Patina Oil & Gas Corporation, a Delaware
corporation having its principal executive offices at 1625 Broadway, Denver,
Colorado 80202 (together with all of its Subsidiaries, the “Company”), for the
benefit of its employees

 

WHEREAS, the Board of Directors of the Company (the “Board”) recognizes that the
possibility of a Change in Control (as hereinafter defined) exists and that the
threat of or occurrence of a Change in Control can result in significant
distractions to the Company’s employees; and

 

WHEREAS, the Company considers the continued service of its employees to be in
the best interest of the Company and its stockholders and desires to assure the
continued services of its employees on behalf of the Company in an objective and
impartial basis and without distraction or conflict of interest in the event of
an attempt to obtain control of the Company;

 

NOW THEREFORE, the Company hereby adopts this Plan which shall be for the
benefit of its employees.

 

1. Certain Definitions.

 

“Additional Compensation” means Projected Annual Bonus amounts that, but for a
Change in Control, would have been paid to any Employee, such amounts to be
determined by the Company in good faith consistent with past practice.

 

(a) If a Change in Control occurs on or before December 31 in any year, the
Additional Compensation shall be calculated in accordance with a fraction, the
numerator of which is the number of days the Employee was employed by the
Company during the year and the dominator of which is 365 (which amount shall be
annualized in order to determine the next Projected Annual Bonus for the
purposes of calculating the Executive, Key Manager and Regular Employee Payments
to be made pursuant to this Plan).

 

(b) If a Change in Control occurs in any year prior to the time the Company has
paid Bonuses for the prior year, the Additional Compensation will consist of (i)
a Bonus for such prior year (which will be deemed for the purposes of this Plan
to be the most recent annual Bonus) and (ii) a payment for the year in which the
Change in Control occurs which will be a pro rata portion of the Projected
Annual Bonus for such year calculated in accordance with a fraction, the
numerator of which is the total number of whole and partial months the Employee
was employed by the Company during the year and the denominator of which is
twelve.

 

“Base Compensation” with respect to all Employees, means an amount equal to such
Employee’s (a) annual salary plus (b) an amount equal to the Company’s Board
approved 401(k) contribution for such Employee in the year immediately preceding
the year in which a Payment is to be made plus (c) an amount equal to the
Company’s annualized deferred compensation matching contribution with respect to
such Employee for the year in which a Payment is to be made.

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“Bonus” with respect to all Employees, means the amount of such Employee’s
annual compensation, other than such Employee’s Base Compensation, which is
designated by the Company as “bonus” compensation.

 

“Cause” means (a) an act or acts of dishonesty by an Employee constituting a
felony under applicable law and/or (b) willful malfeasance or willful misconduct
by an Employee in connection with his employment. Notwithstanding the foregoing,
an Executive or Key Manager shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to such Executive or Key
Manager a copy of a resolution duly adopted by the affirmative vote of not less
than a majority of the Compensation Committee of the Board called and held for
the purpose (after reasonable notice and opportunity for the Executive or Key
Manager, together with counsel to be heard before the Compensation Committee of
the Board), finding that in the good faith opinion of the Compensation Committee
of the Board the Executive or Key Manager engaged in the conduct described
above.

 

“Change in Control” means any of the following:

 

(a) the holders of the voting securities of the Company shall have approved a
merger or consolidation of the Company with any other entity, unless the
proposed merger or consolidation would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 60% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation:

 

(b) a plan of complete liquidation of the Company shall have been adopted or the
holders of voting securities of the Company shall have approved an agreement for
the sale or disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company’s assets;

 

(c) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (“1934 Act”)) shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
25% or more of the combined voting power of the Company’s then outstanding
shares;

 

(d) during any period of two consecutive years, members who at the beginning of
such period constituted the Board shall have ceased for any reason to constitute
a majority thereof, unless the election, or nomination for election by the
Company’s stockholders, of each director shall have been approved by the vote of
at least two-thirds of the directors then still in office and who were directors
at the beginning of such period (so long as such director was not nominated by a
person who has expressed an intent to effect a Change in Control or engage in a
proxy or other control contest); or

 

(e) the occurrence of any other change in control of a nature that would be
required to be reported in accordance with Form 8-K pursuant to Sections 13 or
15(d) of the 1934 Act or in the Company’s proxy statement in accordance with
Schedule 14A of Regulation 14A promulgated under the 1934 Act, or in any
successor forms or regulations to the same effect.

 

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Notwithstanding the foregoing, in no event shall a Change in Control be deemed
to occur upon the occurrence of any of the following: (i) any acquisition of the
Company’s shares by the Company, or (ii) any acquisition of the Company’s shares
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company.

 

“Common Stock” means the Company’s common stock, $.01 par value per share.

 

“Employee” means any person who is a Regular Employee, a Key Manager or an
Executive.

 

“Executive” means any person who is an executive officer of the Company on the
day immediately prior to a Change in Control, including the Company’s Chairman
of the Board, President, Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer and all of the Company’s Vice Presidents.

 

“Executive Payment” means with respect to any Executive, (i) an amount equal to
200% of such Executive’s Base Compensation for the year in which the Executive
Payment is to be made plus (ii) such Executive’s Additional Compensation plus
(iii) an amount equal to 150% of the greater of such Executive’s most recent
annual Bonus (including Bonus payments made by the Company or its predecessors
and whether or not paid at the time of the Change in Control) or the Projected
Annual Bonus for the calendar year in which the Change in Control occurs.

 

“Key Manager” means any person listed on Schedule I attached hereto, as such
schedule may be amended or modified from time to time prior to a Change in
Control by resolution of the Compensation Committee of the Board of Directors of
the Company.

 

“Key Manager Payment” means with respect to any Key Manager, (i) an amount equal
to 150% of such Key Manager’s Base Compensation for the year in which the Key
Manager Payment is to be made plus (ii) such Key Manager’s Additional
Compensation plus (iii) an amount equal to the greater of such Key Manager’s
most recent annual Bonus (including Bonus payments made by the Company or its
predecessors and whether or not paid at the time of the Change in Control) or
the Projected Annual Bonus for the calendar year in which the Change in Control
occurs.

 

“Material Change” means, without the Executive’s written consent, (i) a change
in status, position or responsibilities which, in the Executive’s reasonable
judgment, does not represent a promotion from existing status, position or
responsibilities as in effect immediately prior to the Change in Control; the
assignment of any duties or responsibilities which, in the Executive’s
reasonable judgment, are inconsistent with such status, position or
responsibilities; or any removal from or failure to reappoint or reelect the
Executive to any of such positions, except in connection with the termination
for total and permanent disability, death or Cause or by him other than for good
reason; (ii) a reduction by the Company in the Executive’s Base Compensation as
in effect on the date of the Change in Control or the Company’s failure to
increase the Executive’s Base Compensation after a Change in Control in an
amount which at least equals, on a percentage basis, the average percentage
increase in Base Compensation for all other executive and senior officers of the
Company having a Base Compensation within $25,000 of the Executive’s Base
Compensation as of the Change in Control; (iii) the relocation of the Executive
by the Company to any place not within 25 miles of the location at which the
Executive performed duties prior to a Change in Control, except for required
travel on the Company’s business to an extent substantially consistent with
business travel obligations at the time of a Change in Control; (iv) the failure
of the Company to continue in effect any incentive, bonus or other compensation
plan in which

 

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the Executive participates, including but not limited to the Company’s stock
option and deferred compensation plans, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan), evidenced by the
Executive’s written consent, has been made with respect to such plan in
connection with the change in control, or the failure by the Company to continue
the Executive’s participation therein, or any action by the Company which would
directly or indirectly materially reduce participation therein; (v) the failure
by the Company to continue to provide the Executive with benefits substantially
similar to those enjoyed or entitled under any of the Company’s pension, profit
sharing, life insurance, medical dental health and accident, or disability plans
at the time of a change in control, the taking of any action by the Company
which would directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed or entitled to at
the time of the Change in Control, or the failure by the Company to provide the
number of paid vacation and sick leave days to which the Executive is entitled
on the basis of years of service with the Company in accordance with the
Company’s normal vacation policy in effect on the date hereof; (vi) the failure
of the Company to obtain a satisfactory agreement from any successor or assign
of the Company to assume and agree to perform this Plan; (vii) any purported
termination of the Executive’s employment which is not effected pursuant to this
Plan; or (viii) any request by the Company that the Executive participate in an
unlawful act or take any action constituting a breach of the Executive’s
professional standard of conduct

 

“Notice of Termination” means a notice which informs the Employee of the
effective date of the termination of Employee’s employment.

 

“Payment” means the Regular Employee Payment, Key Manager Payment and the
Executive Payment.

 

“Regular Employee” means any person who is an employee of the Company, other
than any employee who is an Executive or Key Manager, on the day immediately
prior to a Change in Control.

 

“Regular Employee Payment” with respect to any Regular Employee, means an amount
equal to (i) one-half of such Regular Employee’s Base Compensation for the year
in which the Regular Employee Payment is to be made plus (ii) such Regular
Employee’s Additional Compensation plus (iii) an amount equal to the greater of
one-half of such Regular Employee’s most recent annual Bonus (including Bonus
payments made by the Company or its predecessors and whether or not paid at the
time of the Change in Control) or one-half of the Projected Annual Bonus for the
calendar year in which the Change in Control occurs.

 

2. Immediate Vesting

 

(a) Upon a Change in Control, all non-vested securities of the Company held by
Employees, including, without limitation, all non-vested shares of Common Stock
and non-vested options to purchase Common Stock held by such Employees, shall
automatically vest.

 

(b) Upon a Change in Control, all non-vested rights under, or in connection
with, all of the Company’s benefit plans, including, without limitation, the
Company’s 401(k) plan, bonus plan (including cash and/or stock) and deferred
compensation plan shall automatically vest.

 

3. Payments

 

(a) If any Executive is terminated without cause within one year following a
Change

 

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in Control, or if any Executive resigns within 30 days of a Material Change
occurring within one year following a Change in Control (which Material Change
shall be deemed to be constructive termination), then such Executive shall
receive an Executive Payment.

 

(b) If any Key Manager is terminated without cause within one year following a
Change in Control, or if any Key Manager resigns within 30 days of a reduction
in such Key Manager’s Base Compensation occurring within one year following a
Change in Control, then such Key Manager shall receive a Key Manager Payment.

 

(c) If any Regular Employee is terminated without cause within one year
following a Change in Control, or if any Regular Employee resigns within 30 days
of a reduction in such Regular Employee’s Base Compensation occurring within one
year following a Change in Control, then such Regular Employee shall receive a
Regular Employee Payment.

 

(d) Notwithstanding the foregoing, the amount of the Payment shall be dependent
upon the duration of employment with the Company. If such Employee has been
employed by the Company for less than one year, Employee will receive one-half
of the Payment. If such Employee has been employed by the Company for at least
one year, Employee will receive the full amount of the Payment

 

(e) If any Employee is entitled to receive a Payment pursuant to this Section 3,
the Company agrees to pay such Payment to the Employee as termination
compensation in a lump-sum payment within five (5) calendar days of the
termination of the Employee’s employment or such Employee’s resignation due to a
reduction in Base Compensation occurring within one year of a Change in Control
or, with respect to an Executive, within five (5) calendar days of such
Executive’s resignation due to a Material Change.

 

4. Additional Provisions.

 

(a) Enforcement of Plan and Fees and Expenses. The Company shall pay all
reasonable legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by an Employee as they become due as a result of
a good faith dispute in which the Employee seeks to obtain or enforce any right
or benefit provided by this Plan or by any other plan or arrangement maintained
by the Company under which the Employee is or may be entitled to receive
benefits; provided, however, that the circumstances giving rise to such dispute
occurred on or after a Change in Control; provided, further, that no such
payment by the Company shall be required if there is a determination by any
court or arbitrator determining such dispute that there was no reasonable good
faith basis for such Employee’s dispute and, further, upon such a determination,
the Employee shall repay to the Company any and all legal fees and related
expenses the Company has advanced to the Employee in pursuit of such dispute.

 

(b) Severance Pay; No Duty to Mitigate. The amounts payable to Employees under
this Plan shall not be treated as damages but as severance compensation to which
Employees are entitled by reason of termination of employment in the
circumstances contemplated by this Plan. The Company shall not be entitled to
set off against the amounts payable to Employees of any amounts earned by any
Employee in other employment after termination of employment with the Company,
or any amounts which might have been earned by any Employee in other employment
had other such employment been sought.

 

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(c) Notice of Termination. Subsequent to any Change in Control, termination by
the Company shall be communicated by written Notice of Termination to the
terminated Employee in accordance with Section 4(h) hereof.

 

(d) Parachute Payment Limitation. If any payment or benefit to the Employee
under this Plan would be considered a “parachute payment” within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)
and if, after reduction for any applicable federal excise tax imposed by Code
Section 4999 (the “Excise Tax”) and federal income tax imposed by the Code, the
Employee’s net proceeds of the amounts payable and the benefits provided under
this Plan would be less than the amount of the Employee’s net proceeds resulting
from the payment of the Reduced Amount described below, after reduction for
federal income taxes, then the amount payable and the benefits provided under
this Plan shall be limited to the Reduced Amount. The “Reduced Amount” shall be
the largest amount that could be received by the Employee under this Plan such
that no amount paid to the Employee under this Plan and any other agreement,
contract, or understanding heretofore or hereafter entered into between the
Employee and the Company (the “Other Agreements”) and any formal or informal
plan or other arrangement heretofore or hereafter adopted by the Company for the
direct or indirect provision of compensation to the Employee (including groups
or classes of participants or beneficiaries of which the Employee is a member),
whether or not such compensation is deferred, is in cash or is in the form of a
benefit to or for the Employee (a “Benefit Plan”) would be subject to the Excise
Tax. The Reduced Amount shall be calculated by a nationally recognized benefit
consulting firm or accounting firm (the “Firm”), which amount shall be presented
to the Employee for review. In the event that the amount payable to the Employee
shall be limited to the Reduced Amount, then the Employee shall have the right,
in the Employee’s sole discretion, to designate those payments or benefits under
this Plan, any Other Agreements, and/or any Benefit Plans, that should be
reduced or eliminated so as to avoid having the payment to the Employee under
this Plan be subject to the Excise Tax.

 

In the event that the Internal Revenue Service claims that any payment or
benefit received under this Plan, the Other Agreements or the Benefit Plans
constitutes an “excess parachute payment,” within the meaning of Section
280G(b)(1) of the Code, the Employee shall notify the Company in writing of such
claim. The Employee may then, at his or her own option and expense, choose to
dispute the Internal Revenue Service Claim or pay such claim. In either event,
the Employee shall promptly notify the Company of the action such Employee has
taken with respect to such claim, and, if the Employee chooses to dispute such
claim, then the Employee shall provide the Company with quarterly updates of the
status of such dispute.

 

(e) Governing Law. This Plan shall be governed by and subject to the laws of the
State of Delaware.

 

(f) Severability. The invalidity or unenforceability of any particular provision
of this particular Plan shall not affect the other provisions, and this Plan
shall be construed in all respects as if such invalid or unenforceable provision
has not been contained herein.

 

(g) Captions. The captions in this Plan are for convenience and identification
purposes only, are not an integral part of this Plan, and are not to be
considered in the interpretation of any part hereof.

 

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(h) Notices. Except as specifically set forth in this Plan, all notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered in person or sent by registered or certified mail,
postage prepaid. Notices to the Company shall be addressed to Patina Oil & Gas
Corporation, 1625 Broadway, Suite 2000, Denver, Colorado 80202, attn: Executive
Vice President – Chief Financial Officer. Notices to Employees, if mailed, shall
be addressed to the latest address which the Company has for such Employee.

 

(i) Amendment and Termination. This Plan may be amended or terminated by the
Company at any time; provided, however, that the Plan may not be amended or
terminated during the period commencing on the date of a Change in Control and
ending on the first anniversary of the Change in Control, provided, further,
that no amendment or termination of this Plan following a Change in Control may
alter or curtail the entitlements of an Employee accrued under the terms of this
Plan by virtue of a termination of the Employee’s employment prior to such
amendment or termination and the Company shall continue to provide the benefits
or payments to which an Employee had become entitled hereunder prior to the
termination or amendment of this Plan.

 

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