Exhibit 10.1

 

WARREN RESOURCES, INC.

 

SEVERANCE PLAN

 

WARREN RESOURCES, INC., a Maryland corporation (the “Company”), adopted for its
Eligible Employees this Severance Plan (the “Plan”) effective as of November 15,
2013 (the “Effective Date”), in accordance with the terms and conditions
contained herein.

 

SECTION ONE

PURPOSE OF PLAN

 

The Compensation Committee of the Board of Directors of the Company has adopted
this Plan to provide assurances of specified severance benefits to Eligible
Employees upon certain Termination of Employment and to provide specified
retention incentives to Eligible Employees upon a Change in Control. The Company
believes that the severance benefits set forth in this Plan will aid the Company
in attracting and retaining highly qualified individuals. In addition, the
Company believes that the retention incentives in this Plan will help (a) assure
that the Company will have continued dedication and objectivity from its
employees notwithstanding the possibility, threat or occurrence of a Change in
Control and (b) provide the employees with an incentive to continue their
employment and to motivate executives to maximize the value of the Company upon
a Change in Control for the benefit of its stockholders.

 

SECTION TWO

PRIOR SEVERANCE ARRANGEMENTS

 

As of the Effective Date, the Plan replaces any and all severance pay plans,
policies, practices, arrangements or programs, written or unwritten, that the
Employer may have had in effect for its Eligible Employees from time to time
prior to the Effective Date. Any Eligible Employee of the Employer whose
employment is terminated on or after the Effective Date shall not be entitled to
any severance benefits other than those set forth herein.

 

SECTION THREE

DEFINITIONS

 

As used in the Plan:

 

3.1 “Base Pay” shall mean the Eligible Employee’s regular gross salary or hourly
wages for a normal workweek before any deductions, exclusions or any deferrals
or contributions under any Company plan or program, but excluding bonuses,
incentive compensation, employee benefits or any other non-salary form of
compensation, being received by an Eligible Employee immediately prior to
Termination of Employment.

 

3.2 “Cause” shall mean (i) the willful breach or habitual neglect of assigned
duties related to the Company, including compliance with Company policies;
(ii) conviction (including any plea of nolo contendere) of the Eligible Employee
of any felony or crime involving dishonesty or moral turpitude; (iii) any act of
personal dishonesty knowingly taken by the Eligible Employee in connection with
his responsibilities as an employee and intended to result in personal
enrichment of the Eligible Employee or any other person; (iv) bad faith conduct
that is materially detrimental to the Company; (v) inability of the Eligible
Employee to perform the Employee’s duties due to alcohol or illegal drug use;
(vi) the Eligible Employee’s failure to comply with any legal written directive
of the Board of Directors of the Company; (vii) any act or omission of the
Eligible Employee which is of substantial detriment to the Company because of
the Eligible Employee’s intentional failure to comply with any statute, rule or
regulation, except any act or omission believed by the Eligible Employee in good
faith to have been in or not opposed to the best interest of the Company
(without intent of the Eligible Employee to gain, directly or indirectly, a
profit to which the Eligible Employee was not legally entitled) and except that
Cause shall not mean bad judgment or negligence other than habitual neglect of
duty; or (viii) any other act or failure to act or other conduct which is
determined by the Plan Administrator, in its sole discretion, to be demonstrably
and materially injurious to the Employer, monetarily or otherwise.

 

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3.3 “Change of Control” shall mean the occurrence of any of the following
events:

 

(a)                                 an acquisition by any Entity of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than 50% of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
the following acquisitions shall not constitute a Change of Control:  (i) any
acquisition directly from the Company, other than an acquisition by virtue of
the exercise of a conversion privilege where the security being so converted was
not acquired directly from the Company by the party exercising the conversion
privilege, (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Related Company, or (iv) any acquisition by any Entity pursuant to a
transaction that meets the conditions of clauses (i), (ii) and (iii) set forth
in the definition of Company Transaction; or

 

(b)                                 a change in the composition of the Board of
Directors of the Company during any two-year period such that the individuals
who, as of the beginning of such two-year period, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of this definition, any individual
who becomes a member of the Board subsequent to the beginning of the two-year
period, whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the Incumbent Board
(or deemed to be such pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; and provided further,
however, that any such individual whose initial assumption of office occurs as a
result of or in connection with an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of an Entity other than the
Board shall not be considered a member of the Incumbent Board; or

 

(c)                                  the date a majority of members of the
corporation’s board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the corporation’s board of directors before the date of the
appointment or election, or

 

(d)                                 the consummation of a Company Transaction.

 

3.4 “Company Transaction” means consummation of:

 

(a)                                 a merger or consolidation of the Company
with or into any other company; or

 

(b)                                 a statutory share exchange pursuant to which
all of the Company’s outstanding shares are acquired or a sale in one
transaction or a series of transactions undertaken with a common purpose of
acquiring all of the Company’s outstanding voting securities; or

 

(c)                                  a sale, lease, exchange or other transfer
in one transaction or a series of related transactions undertaken with a common
purpose of acquiring all or substantially all of the Company’s assets,
excluding, however, in each case, any such transaction pursuant to which:
(i) the Entities who are the beneficial owners of the Outstanding Company Voting
Securities immediately prior to such transaction will beneficially own, directly
or indirectly, at least 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of the
Successor Company in substantially the same proportions as their ownership,
immediately prior to such transaction, of the Outstanding Company Voting
Securities; (ii) no Entity (other than the Company, any employee benefit plan
(or related trust) of the Company, a Related Company or a Successor Company)
will beneficially own, directly or indirectly, more than 50% of the combined
voting power of the outstanding voting securities of the Successor Company
entitled to vote generally in the election of directors unless such ownership
resulted solely from ownership of securities of the Company prior to such
transaction; and (iii) individuals who were members of the Incumbent Board will
immediately after the consummation of such transaction constitute at least a
majority of the members of the board of directors of the Successor Company.

 

Where a series of transactions undertaken with a common purpose is deemed to be
a Company Transaction, the date of such Company Transaction shall be the date on
which the last of such transactions is consummated.

 

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3.5 “Company” shall mean Warren Resources, Inc., a Maryland corporation, and any
successor by merger, acquisition, consolidation or otherwise that assumes the
obligations of the Company under the Plan.

 

3.6 “Eligible Employee” shall mean the Employer’s regular, full-time salaried or
hourly employees who are residents of the United States, have been employed by
the Employer for (a) twelve (12) months in connection with a Change of Control
event and (b) eighteen (18) months or more in connection with all other
Terminations of Employment, in both cases who meet a classification as a Tier 3,
4, 5 or 6 employee, as set forth on EXHIBIT A attached hereto and made a part
hereof, are other than Senior Officers and are not covered by a collective
bargaining agreement between the Employer and a collective bargaining
representative.

 

3.7 “Employer” shall mean the Company and any direct or indirect Subsidiary of
the Company.

 

3.8 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time. References to any Section of ERISA shall include any
successor provision thereto.

 

3.9 “Incentive Bonus” shall mean the greater of (i) the dollar amount of the
annual incentive payment that would be payable to the Eligible Employee if the
Company reaches its target performance for that year under the Company’s
short-term incentive program applicable to the Eligible Employee, as if all
requirements for full payment of such incentive had been met, or (ii) the dollar
amount of the annual incentive actually paid or payable to the Eligible Employee
for the most recently completed fiscal year.

 

3.10 “Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time. References to any Section of the Internal Revenue
Code shall include any successor provision thereto.

 

3.11 “Officer” shall mean any officer of the Company with the title of Senior
Vice President or lower, but excluding those individuals that have been
designated as Senior Officers.

 

3.12 “Participant” shall mean an Eligible Employee who is or becomes a
Participant in the Plan as provided in Section Four.

 

3.13 “Plan” shall mean the Severance Plan as set forth in this document, and as
hereafter amended from time to time.

 

3.14 “Plan Year” shall mean the twelve (12)-month period ending on December 31.

 

3.15 “Plan Administrator” shall mean the person, persons or entity administering
the Plan in accordance with the provisions of Section Seven hereof. The Plan
Administrator shall be the “named fiduciary”, as referred to in
Section 402(a) of ERISA, with respect to the management, operation and
administration of the Plan.

 

3.16 “Release Form” shall mean the Release Form in substantially the form
attached as Appendix A.

 

3.17 “Senior Officer” shall mean an individual who is an Executive Vice
President or Senior Vice President—General Counsel of the Company or higher.

 

3.18 “Severance Pay” shall mean the compensation the Eligible Employee will be
provided and based on the Eligible Employee’s job classification at his
Termination of Employment as set forth on EXHIBIT A.

 

3.19 “Subsidiary” shall mean an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding Voting Stock.

 

3.20 “Termination of Employment” shall mean an involuntary termination of
employment from the Employer which results from an affirmative discharge from
employment by the Employer, other than discharge for Cause or death or
disability of the Employee. An Eligible Employee shall not be deemed to have
incurred a Termination of Employment by reason of the transfer of the Eligible
Employee’s employment between the Company and any Subsidiary or among
Subsidiaries. Notwithstanding the foregoing provisions of this Section 3.20, an

 

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Eligible Employee who, in connection a Change of Control event, is offered, on,
prior to or within two weeks of closing on such Change of Control event,
continued employment with the successor company (including, without limitation,
a purchaser of all or any substantial part of a business unit) and is not
subsequently terminated without Cause within the time period indicated on
Exhibit A after the closing of Change of Control shall not be deemed to have
incurred a Termination of Employment and shall not be eligible for Severance Pay
under this Plan. The Plan Administrator shall determine, in its sole discretion,
whether an Eligible Employee’s termination of employment from the Employer
constitutes a “Termination of Employment.”

 

3.21 “Voting Stock” shall mean securities entitled to vote generally in the
election of directors.

 

3.22 “Years of Service” shall mean the period of continuous employment with one
or more Employers commencing on the Eligible Employee’s original hire date or
most recent adjusted hire date, and ending on the Eligible Employee’s date of
Termination of Employment. A period of continuous employment shall include any
leave of absence with or without pay. An Eligible Employee shall not be deemed
to have ceased to be an employee of an Employer by reason of the transfer of the
Eligible Employee’s employment between the Company and any Subsidiary or among
Subsidiaries. Subject to the Eligible Employee having been employed by the
Employer for eighteen (18) months as set forth in Section 3.6 above, an Eligible
Employee shall receive one (1) Year of Service credit for each full year of
employment measured from the appropriate hire date or anniversary of the hire
date. Any partial year of employment shall not count as a Year of Service. In
addition, an Eligible Employee’s period of employment with a company or business
acquired by an Employer will be included in the determination of his or her
Years of Service, provided he or she was an employee of such acquired company or
business on the date of its acquisition by the Employer and became employed by
the Employer in connection with the acquisition.

 

3.23 Wherever appropriate, words used in the Plan in the singular may mean the
plural, the plural may mean the singular, and the masculine may mean the
feminine.

 

SECTION FOUR

ELIGIBILITY AND BENEFITS

 

An Eligible Employee who suffers a Termination of Employment shall become a
Participant as of the date of his or her Termination of Employment and shall be
entitled to receive the Severance Pay applicable to such Participant provided he
or she executes a Release Form as provided for herein.

 

Participant’s Severance Pay shall be paid in a lump sum to the Participant
within an administratively reasonable time following Termination of Employment,
or where applicable, following the expiration of the revocation period provided
on the Release Form, but in no event more than thirty (30) days following the
date of Termination of Employment.

 

If a Participant dies following execution of the Release Form, but before
receiving all or part of the Severance Pay to which he or she is entitled, the
Plan Administrator shall pay such Participant’s Severance Pay to the
Participant’s surviving spouse (if any) and if none to the Participant’s estate.

 

An Eligible Employee otherwise entitled to Severance Pay under this Plan shall
be paid (or his estate shall be paid) such Severance Pay only if that Eligible
Employee executes and files with the Plan Administrator, on or before the date
specified on the Release Form, a fully completed Release Form, and in the case
of Eligible Employees age 40 and over, does not revoke the Release Form within
seven (7) days of executing the Release Form.

 

SECTION FIVE

FUNDING

 

Funding for this Plan shall come solely from the general assets of the Employer.
All payments of Severance Pay with respect to a particular Participant shall be
paid from the general assets of that Participant’s Employer. Neither the
Employer nor the Plan Administrator shall have any obligation to establish a
trust or fund for the payment of benefits under the Plan or to insure any of the
benefits under the Plan. None of the officers, members of the Board of
Directors, or agents of the Employer or the Plan Administrator guarantees in any
manner the payment of benefits hereunder.

 

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SECTION SIX

BENEFIT CLAIMS PROCEDURE

 

6.1 Claims for Benefits. Any claim for benefits under the Plan shall be made in
writing to the Plan Administrator. If such claim for benefits is wholly or
partially denied, the Plan Administrator shall, within ninety (90) days after
receipt of the claim, notify the claimant of the denial of the claim. Such
notice of denial (i) shall be in writing, (ii) shall be written in a manner
calculated to be understood by the claimant, and (iii) shall contain (a) the
specific reason or reasons for denial of the claim, (b) a specific reference to
the pertinent Plan provisions upon which the denial is based, (c) a description
of any additional material or information necessary to perfect the claim, along
with an explanation of why such material or information is necessary, and (d) an
explanation of the claim review procedure, in accordance with the provisions of
this Section Six.

 

6.2 Request for Review of Denial. Within sixty (60) days after the receipt by
the claimant of a written notice of denial of the claim, or such later time as
shall be deemed reasonable taking into account the nature of the benefit subject
to the claim and any other attendant circumstances, if the claimant does not
agree with the denial of the claim, the claimant or his authorized
representative must file a written request with the Plan Administrator that it
conduct a full and fair review of the denial of the claim for benefits. In
connection with any request for a review of the denial of a claim for benefits,
the claimant, or his authorized representative, may review pertinent documents
relating thereto and may submit issues and comments in writing to the Plan
Administrator.

 

6.3 Decision on Review of Denial. The Plan Administrator shall deliver to the
claimant a written decision on the claim within sixty (60) days after the
receipt of the aforesaid request for review, except that if there are special
circumstances (such as the need to hold a hearing, if necessary) which require
an extension of time for processing, the aforesaid sixty (60)-day period shall
be extended to one hundred twenty (120) days. Such decision shall (i) be written
in a manner calculated to be understood by the claimant, (ii) include the
specific reason or reasons for the decision, and (iii) contain a specific
reference to the pertinent Plan provisions upon which the decision is based.

 

SECTION SEVEN

ADMINISTRATION OF THE PLAN

 

7.1 Plan Administrator. The Plan Administrator hereunder shall be the General
Counsel or other appropriate Human Resources Officer of the Company.

 

7.2 Allocation and Delegation of Plan Administrator Responsibilities. The Plan
Administrator may appoint such assistants or representatives as it deems
necessary for the effective exercise of its duties in administering the Plan and
may delegate to such assistants and representatives any powers and duties, both
ministerial and discretionary, as it deems expedient or appropriate. The Plan
Administrator also may designate any person, firm or corporation to carry out
any of the other responsibilities of the Plan Administrator under the Plan. Any
such allocation or designation shall be made pursuant to a written instrument
executed by the Plan Administrator.

 

7.3 Actions of Fiduciaries. The Plan Administrator may authorize or approve any
action by written instrument signed by a person duly authorized to act on behalf
of the Plan Administrator. Any written memorandum signed by any such duly
authorized person or by any other person duly authorized by the Plan
Administrator to act in respect of the subject matter of the memorandum, shall
have the same force and effect as a formal resolution adopted by the Plan
Administrator.

 

All acts and determinations with respect to the administration of the Plan made
by the Plan Administrator and any assistants or representatives appointed by it
shall be duly recorded by the Plan Administrator or by the assistant or
representative appointed by it to keep such records. All records, together with
such other documents as may be necessary for the administration of the Plan,
shall be preserved in the custody of the Plan Administrator or the assistants or
representatives appointed by it.

 

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7.4 General Administrative Powers. Except as otherwise provided herein, the Plan
Administrator is authorized to take such actions as may be necessary to carry
out the provisions and purposes of the Plan and shall have the authority to
control and manage the operation and administration of the Plan. In order to
effectuate the purposes of the Plan, the Plan Administrator shall have the
discretionary authority and power to construe and interpret the Plan, to supply
any omissions therein, to reconcile and correct any errors or inconsistencies,
to decide any questions in the administration and application of the Plan, and
to make equitable adjustments for any mistakes or errors made in the
administration of the Plan. All such actions or determinations made in good
faith by the Plan Administrator, and the application of rules and regulations to
a particular case or issue by the Plan Administrator shall, subject to the
claims procedures set forth in Section Six hereof, not be subject to review by
anyone, but shall be final, binding and conclusive on all persons ever
interested hereunder. In construing the Plan and in exercising its power under
provisions requiring the Plan Administrator’s approval, the Plan Administrator
shall attempt to ascertain the purpose of the provisions in question and when
such purpose is known or reasonably ascertainable, such purpose shall be given
effect to the extent feasible. In the discharge of this discretionary authority
the Plan Administrator shall have all necessary powers and duties, including but
not limited to the following:

 

(a)  to require any person to furnish such information as is reasonably
necessary or appropriate for administration of the Plan as a condition to
receiving benefits under the Plan;

 

(b)  to make such rules and regulations and prescribe the use of such forms as
he shall deem necessary for the efficient administration of the Plan;

 

(c)  to establish or cause to be established such procedures, protocols and
guidelines as he shall deem necessary to interpret the terms and conditions of
the Plan;

 

(d)  to decide on questions concerning Plan eligibility, Years of Service and
Termination of Employment in accordance with the terms of the Plan;

 

(e)  to determine the amount of benefits payable to a Participant, in accordance
with the Plan, and to provide a full and fair review to any Participant whose
claim for benefits has been denied in whole or in part;

 

(f)   to designate other persons to carry out any duty or power which would
otherwise be a fiduciary responsibility of the Plan Administrator, under the
terms of the Plan.

 

7.5 Appointment of Professional Assistance. The Plan Administrator may engage
accountants, attorneys and such other personnel as it deems necessary or
advisable. The functions of any such persons engaged by the Plan Administrator
shall be limited to the specific services and duties for which they are engaged,
and such persons shall have no other duties, obligations or responsibilities
under the Plan. Unless otherwise specifically so delegated, such persons shall
exercise no discretionary authority or discretionary control respecting the
management of the Plan.

 

7.6 Discretionary Acts. Any discretionary actions of the Plan Administrator with
respect to the administration of the Plan shall be made in a manner which does
not discriminate in favor of stockholders, officers and highly compensated
employees.

 

7.7 Responsibility of Fiduciaries. The Plan Administrator and its assistants and
representatives shall be free from all liability for their acts and conduct in
the administration of the Plan except for acts of gross negligence, fraud or
willful misconduct; provided, however, that the foregoing shall not relieve any
of them from any responsibility or liability for any responsibility, obligation
or duty that they may have pursuant to ERISA.

 

7.8 Indemnity by Employer. In the event and to the extent not insured against by
any insurance company pursuant to provisions of any applicable insurance policy,
the Employer shall indemnify and hold harmless the Plan Administrator and its
assistants and representatives from any and all claims, demands, suits or
proceedings in connection with the Plan that may be brought by the Employer’s
employees, Participants or their legal representatives, or by any other person,
corporation, entity, government or agency thereof, including any amounts paid in
settlement, with the approval of the Plan Administrator, and any and all other
losses, damages, interest, expenses, including counsel fees approved by the Plan
Administrator, and penalties, including any penalties imposed by the Secretary
of Labor pursuant to Section 502(1) of ERISA relating to any breaches of
fiduciary responsibility

 

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under Part 4 of Title I of ERISA, arising from any action or failure to act,
except where the same is judicially determined to be due to gross negligence,
fraud, or willful misconduct of such individual in connection with the Plan. The
indemnification contained in this Section shall apply regardless of whether the
event causing the liability arises in whole or in part from the negligence
(other than judicially determined gross negligence) or other fault on the part
of the individual, specifically including breaches of fiduciary responsibility
under ERISA.

 

SECTION EIGHT

ADOPTION OF PLAN BY SUBSIDIARY

 

Any Subsidiary, whether or not presently existing, may, with the approval of the
Chief Executive Officer of the Company, adopt this Plan. Any Subsidiary that
adopts the Plan is thereafter an Employer with respect to its employees for
purposes of the Plan, and any event that causes any Employer to cease to be a
Subsidiary shall not affect such Subsidiary’s adoption of this Plan or its
obligations under the Plan.

 

SECTION NINE

AMENDMENT OF THE PLAN

 

The Compensation Committee of the Board of Directors of the Company may amend
the Plan at any time and in any manner with respect to all of the Employers. Any
amendment to this Plan shall be effectuated by a written instrument signed by a
duly authorized officer of the Company and shall be incorporated into the Plan
document. Any amendment or restatement may be made retroactive if, in the
judgment of the Compensation Committee of the Board of Directors of the Company,
such retroactivity is necessary or advisable for any reason. Notwithstanding the
foregoing, for a period of one year following a Change of Control, this Plan may
not be amended in any manner adverse to any Eligible Employee.

 

SECTION TEN

TERMINATION OF THE PLAN

 

Continuance of the Plan is not assumed as a contractual obligation of the
Employer, and the Compensation Committee of the Board of Directors of the
Company reserves the right to terminate the Plan at any time. Such termination
may occur without consent being obtained from the Plan Administrator, Eligible
Employees or any other interested person; provided however, that any termination
of this Plan shall not affect the benefits payable under the Plan to any
Eligible Employee who suffers a Termination of Employment prior to the
termination of the Plan. The Plan shall automatically terminate upon dissolution
of the Company, unless provision is specifically made by its successors, if any,
for the continuation of the Plan; provided however, a merger or consolidation of
the Company with or into any corporation or other legal entity shall not be
deemed to be a dissolution of the Company for purposes of this Plan.
Notwithstanding the foregoing, following a Change of Control, this Plan may not
be terminated prior to the first anniversary of the Change of Control.

 

SECTION ELEVEN

VESTING

 

No Eligible Employee shall have a vested right to any benefit under this Plan
prior to the time a determination is made by the Plan Administrator that the
particular Eligible Employee is a Participant.

 

SECTION TWELVE

STATUS OF EMPLOYMENT RELATIONS

 

The adoption and maintenance of the Plan shall not be deemed to constitute a
contract between any Employer and its Eligible Employees or to be consideration
for, or an inducement or condition of, the employment of any person. Nothing
herein contained shall be deemed (i) to give to any Eligible Employee the right
to be retained in the employ of the Employer; (ii) to affect the right of the
Employer to discipline or discharge any Eligible Employee at any time; (iii) to
give the Employer the right to require any Eligible Employee to remain in its
employ; or (iv) to affect any Eligible Employee’s right to terminate his
employment at any time.

 

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SECTION THIRTEEN

RESTRICTIONS ON ASSIGNMENT

 

The benefits provided hereunder are not subject in any manner to the debts or
other obligations of the persons to whom they are payable. The interest of an
Eligible Employee may not be sold, transferred, assigned or encumbered in any
manner, either voluntarily or involuntarily, and any attempt so to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be
null and void.

 

SECTION FOURTEEN

409A COMPLIANCE

 

To the extent applicable, this Plan shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Section 409A of the Code and
Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued after the adoption of this Plan. It is intended that (i) each
installment of any benefits payable under the Plan to you be regarded as a
separate “payment” for purposes of Treasury Regulations
Section 1.409A-2(b)(2)(i), (ii) all payments of any such benefits under the Plan
satisfy, to the greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4) and
1.409A-1(b)(9)(iii), and (iii) any such benefits consisting of COBRA premiums
also satisfy, to the greatest extent possible, the exemption from the
application of Section 409A provided under Treasury Regulations
Section 1.409A-1(b)(9)(v). Notwithstanding any provision of this Plan to the
contrary, in the event that the Company determines that any amounts payable
hereunder will cause you to incur adverse tax consequences under Section 409A of
the Code and related Department of Treasury guidance, to the extent permitted
under Section 409A of the Code, the Company may, to the extent permitted under
Section 409A of the Code (a) cooperate in good faith to adopt such amendments to
this Plan and appropriate policies and procedures, including amendments and
policies with retroactive effect, that it determines necessary or appropriate to
preserve the intended tax treatment of the benefits provided by this Plan,
preserve the economic benefits of this Plan and avoid less favorable accounting
or tax consequences for the Company and/or (b) take such other actions as
mutually determined necessary or appropriate to exempt the amounts payable
hereunder from Section 409A of the Code or to comply with the requirements of
Section 409A of the Code and thereby avoid the application of adverse tax
consequences under such section.

 

SECTION FIFTEEN

APPLICABLE LAW

 

To the extent not preempted by ERISA, the Plan shall be construed, regulated,
interpreted and administered under and in accordance with the laws of the State
of Maryland.

 

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APPENDIX A

 

GENERAL RELEASE OF LIABILITY

 

Introduction and General Information to Employee. Signing this Release is one
condition to receiving certain benefit payments under the Severance Plan offered
by Warren Resources, Inc. and its participating subsidiaries and affiliates (the
“Company”). You should thoroughly review and understand the effect of this
Release and consult with an attorney before signing it. To the extent you have
any claims covered by this Release, you will be giving up potentially valuable
rights by signing. You may take time to consider whether or not to sign this
Release. If you sign this Release and return it to the Company you will be
entitled to supplemental benefits under the Warren Resources Severance Plan if
you are otherwise eligible. If the signed Release is not received by the
Consideration Period and Revocation Period deadlines set forth below, no
supplemental benefits will be paid.

 

General Release. In exchange for receiving certain supplemental benefit payments
under the Warren Resources Severance Plan offered by the Company, I release
(i.e., give up) all known and unknown claims that I presently have against the
Company,  its current or former owners, parents, subsidiaries, and affiliates,
stockholders, assigns, employees, agents, directors, officers, and affiliated
companies and any of their officers, directors or employees, and any of the
fiduciaries of their employee benefit plans, and any related parties (Released
Parties), arising from or related to my employment with the Company and the
termination of that employment, except claims that the law does not permit me to
waive by signing this Release. For example, I am releasing all common law
contract, tort, or other claims I might have, as well as all claims I might have
under the Age Discrimination in Employment Act (ADEA), the WARN Act, Title VII
of the Civil Rights Act of 1964, Sections 1981 and 1983 of the Civil Rights Act
of 1866, the Americans With Disabilities Act (ADA), the Employee Retirement
Income Security Act of 1974 (ERISA), the Family Medical Leave Act (FMLA), and
similar state or local laws.

 

Extent of Release. For the purpose of implementing a full and complete release
and discharge of the Company, I expressly acknowledge that the release given in
this document is intended to include in its effect, without limitation, all
claims that I did not know or suspect at the time I signed this release,
regardless of whether the knowledge of such claims, or the facts upon which they
might be based, would materially have affected the decision to sign this
release, and that the consideration given under this Release is also for the
release of those claims and contemplates the extinguishment of any such claims.
In furtherance of this Release, I waive any rights provided by California Civil
Code Section 1542, or other similar state or federal law. Section 1542 states:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

 

Some of the types of claims that I am releasing, although there may be others
not listed here, are claims under any applicable federal, state or local
statute, ordinance, order, or law arising out of or relating to:

 

Discrimination on the basis of sex, race, color, national origin, religion,
sexual orientation, disability, veteran status, or any other legally protected
status;

 

Harassment, wrongful discharge, or retaliation, including retaliatory discharge,
arising under state or federal law, including any worker’s compensation or
whistleblower statute;

 

Any other possible restrictions on the Company’s ability to end its employees’
employment at will, including but not limited to (i) violation of public policy,
(ii) breach of any express or implied covenant of the employment contract, and
(iii) breach of any covenant of good faith and fair dealing;

 

Unpaid wages, including but not limited to claims for unpaid overtime, break,
meal, or rest periods;

 

Amounts determined under a Company cash bonus incentive plan and equity
incentive plan, including but not limited to the varying amounts at its
discretion;

 

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Civil claims of negligence, defamation, invasion of privacy, personal injury,
fraud, misrepresentation, or infliction of emotional or mental distress; and

 

Release of Claims Under Age Discrimination in Employment Act. In consideration
for receiving certain supplemental benefits from the Company, I specifically
waive all existing rights and claims I may have against the Released Parties
under the Age Discrimination in Employment Act, 29 USC §621 et seq., and any
other applicable federal or state statute or law involving age discrimination. I
acknowledge that the supplemental benefits provided in the Warren Resources
Severance Plan constitute independent consideration for this Release of
liability and are in addition to any other payment to which I am entitled. I
further acknowledge that I have been advised to consult with an attorney of my
own choosing before executing this Release.

 

Exceptions to Release. The only claims that this Release does not include are
claims related to:

 

The business expense reimbursement policy of the company;

 

Claims pursuant to section 502(a)(1)(B) of ERISA to recover benefits, under the
terms of the employee benefit plans of the Company, as applicable to me on the
date I received this Release; and

 

Claims made for work-related injuries under applicable worker’s compensation
statutes.

 

Consideration Period. I am aware that I have a period of time of not less than
30 days to consider whether to sign and return this Release as described in the
introductory paragraph of this document (the “Consideration Period”). I
knowingly and voluntarily waive the remainder of the Consideration Period
following the date I sign this Release below. I have not been asked by the
Company to sign the release before the end of the Consideration Period. The
Company has not threatened to withdraw or alter the benefit payment due me
before the expiration of the Consideration Period nor has the Company provided
different terms to me because I have decided to sign the Release before the
expiration of the Consideration Period.

 

Revocation Period. I understand that I have a seven (7) day period after signing
this Release in which to revoke or rescind my Release, by informing the Company
in writing of my decision to revoke, and that this Release will not be
enforceable until the eighth day after I sign this Release. In the event I
revoke my acceptance of this Release, the Company shall have no obligation to
provide me additional severance benefits.

 

Agreement Not to Sue. I understand that following the seven (7) day revocation
period this Release will be final and binding. I promise that I will not pursue
any claim that I have settled by this Release. I further understand that if I
pursue a claim against the Company or the parent or any affiliate of the
Company, the Company may seek to offset the amount paid to me for signing this
Release against any award I may obtain and the Company may be entitled to
recover costs and attorney’s fees specifically authorized under applicable law.

 

Benefit Payment in the Event of Death. I understand that if I should die after
the Company provides me with written notification of layoff but before I execute
this Release, the minimum and supplemental benefit to which I am entitled will
be paid to my surviving spouse, if I am married, or to my estate. In order to
receive supplemental benefits, my surviving spouse or the executor of my estate
will be required to execute a Release and return the executed Release to the
Company within the applicable time period specified by the Plan Administrator in
a Release provided to the surviving spouse or representative of the estate.

 

Receipt of the Warren Resources Severance Plan. I have received and read a
written summary of the Warren Resources Severance Plan, and I understand that
payments will be made according to the terms of this Plan.

 

Severability. If any provision of this Release is invalid, illegal or
unenforceable, such provision shall be modified to render the same valid and
enforceable or shall be severed from this Release. The validity, legality and
enforceability of the remaining provisions of this Release shall not in any way
be affected or impaired thereby.

 

Entire Agreement. This Release is the entire agreement related to my service
with the Company and any claims or future rights that I might have with respect
to the Company and the Released Parties.

 

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No Modification. This Release may only be amended by a written agreement that
the Company and I sign.

 

Enforceability. This Release is a legally admissible, enforceable agreement
governed by Federal law and the laws of Maryland.

 

No Representations. When I decided to sign this Release, I was not relying on
any representations that were not in this Release.

 

Agreement Is Knowing and Voluntary. I understand and agree that I:

 

·                  have had a reasonable time within which to consider this
Release before executing it;

 

·                  have carefully read and fully understands all of the
provisions of this Release;

 

·                  knowingly and voluntarily agree to all of the terms set forth
in this Release;

 

·                  knowingly and voluntarily intend to be legally bound by all
of the terms set forth in this Release; and

 

·                  was advised, and hereby am advised in writing, to consider
the terms of this Release and consult with an attorney of my choice prior to
executing this Release.

 

 

Dated:

 

 

Employee Signature:

 

 

 

 

 

 

 

Employee Name (Print):

 

 

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WARREN RESOURCES, INC.

 

EXHIBIT A

 

 

 

 

 

 

 

 

 

Terminated

 

 

 

 

 

 

 

 

Within

 

 

 

 

Termination without cause

 

Change in control

 

after CIC

 

 

 

 

 

 

 

 

 

Tier 3

 

CFO, SVP - Land & Reg. VP, Senior Managers

 

2 weeks per year of service with a minimum of 4 months and a maximum of 6 months
of base salary

 

0.5X base salary + 0.5X avg of 3 prior year incentive bonus + prorated current
year incentive bonus

 

2 years

 

 

 

 

 

 

 

 

 

Tier 4

 

Managers

 

2 weeks per year of service with a minimum of 3 months and a maximum of 6 months
of base salary

 

0.5X base salary + prorata incentive bonus

 

1 year

 

 

 

 

 

 

 

 

 

Tier 5

 

Technical Discipline

 

2 weeks per year of service with a minimum of 2 months and a maximum of 6 months
of base salary

 

0.5X base salary + prorata incentive bonus

 

1 year

 

 

 

 

 

 

 

 

 

Tier 6

 

Other Salaried

 

2 weeks per year of service with a minimum of 2 months and a maximum of 6 months
of base salary

 

2 weeks per year of service with a minimum of 2 months and a maximum of 6 months
of base salary + prorata incentive bonus

 

1 year

 

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