Document:

exv10w19

 

Exhibit 10.19

SECOND AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (“Agreement”) is made and entered into June 8,
2006 (the “Effective Date”), by and among Mariner Energy, Inc., a Delaware corporation (“MEI”),
Mariner Energy Resources, Inc., a Delaware corporation (“MERI”) (MEI and MERI may be separately
referred to as an “Employer” or collectively referred to as the “Employers”), and Judd Hansen
(“Executive”).

     1. Employment. During the Employment Period (as defined in Section 4 hereof), (i) MEI
shall employ Executive, and Executive shall serve, as Vice President of MEI, and (ii) MERI shall
employ Executive, and Executive shall serve, as Vice President of MERI.

     2. Duties and Responsibilities of Executive.

     (a) During the Employment Period, Executive shall devote his full time and attention
during normal business hours to the business of the Employers, will act in the best
interests of the Employers and will perform with due care his duties and responsibilities.
Executive’s duties will include those normally incidental to the positions set forth in
Section 1 hereof as well as whatever additional duties may be assigned to him by the Board
of Directors of MEI (the “MEI Board”), the Chief Executive Officer of MEI, the Board of
Directors of MERI (the “MERI Board”), or the Chief Executive Officer of MERI. Executive
agrees to cooperate fully with the MEI Board, the Chief Executive Officer of MEI, the MERI
Board, and the Chief Executive Officer of MEI, and not to engage in any activity that
materially interferes with the performance of Executive’s duties hereunder. During the
Employment Period, Executive will not hold employment other than that set forth in Section 1
hereof without the advance written approval of the Board of MEI and the Board of MERI. It
shall not be a violation of this Agreement for Executive to (1) serve on corporate, civic,
or charitable boards or committees (except for boards or committees of a business
organization that competes with an Employer in any business in which the Employer is
regularly engaged), which are listed on Exhibit A so long as such service does not
materially interfere with the performance of Executive’s duties and responsibilities under
this Agreement, as determined in the good faith opinion of the Board of MEI and the Board of
MERI, (2) manage personal investments, or (3) take vacation days and reasonable absences due
to injury or illness, as set forth herein and/or permitted by the general policies of the
Employers.

     (b) Executive represents and covenants to the Employers that he is not subject or a
party to any employment agreement, noncompetition covenant, nondisclosure agreement, or any
other agreement, covenant, understanding, or restriction that would prohibit Executive from
executing this Agreement and fully performing his duties and responsibilities hereunder, or
would in any manner, directly or indirectly, limit or affect the duties and responsibilities
that may now or in the future be assigned to Executive hereunder.

     (c) Executive acknowledges and agrees that Executive owes the Employers a duty of
loyalty and that the obligations described in this Agreement are in addition to,
and not in lieu of, the obligations Executive owes the Employers under the common law.
MEI and MERI each acknowledge that Executive’s simultaneous employment with the Employers
will not be considered a violation of any provision of this Section 2.

 

 

     3. Compensation.

     (a) During the Employment Period (as defined in Section 4 hereof), (i) MEI shall pay to
Executive an annualized base salary of $93,750 (the “MEI Base Salary”) (ii) and MERI shall
pay to Executive an annualized base salary of $93,750 (the “MERI Base Salary”), in
consideration for Executive’s services under this Agreement, payable on a not less than
semi-monthly basis, in conformity with MEI’s customary payroll practices for executive
salaries. For all purposes of this Agreement, Executive’s Base Salary shall include any
portion thereof which is deferred under any nonqualified plan or arrangement. Each year, the
MEI Board and the MERI Board shall independently review Executive’s MEI Base Salary and MERI
Base Salary, respectively, based on market survey data, corporate performance, and
performance of Executive. If, in its sole and complete discretion, either the MEI Board or
the MERI Board determines that an increase in Executive’s Base Salary is appropriate, such
Board may make such adjustment, and such adjusted salary shall thereafter be Executive’s
Base Salary for purposes of this Agreement. Neither Executive’s MEI Base Salary or his MERI
Base Salary may be reduced except as part of a general reduction of salaries paid to
management employees that is necessitated by business conditions, as determined by the
respective Board.

     (b) Executive may be eligible for an annual discretionary performance bonus with
respect to each calendar year during the Employment Period from either or both Employers
(the “Annual Bonus”). The amount, if any, of Executive’s Annual Bonus from each Employer
will be determined by the Board of such Employer in its sole and complete discretion based
on market survey data, corporate performance, and performance of Executive. Annual Bonus
determinations will be made by the respective Board at a time convenient to such Board but
typically within 60 calendar days of the end of each calendar year. Each of the MEI Board
and the MERI Board will on an annual basis (at or near the beginning of each calendar year
in the Employment Period) establish a target bonus for Executive for the upcoming year, and
will communicate such target to Executive. If either Board determines to award Executive an
Annual Bonus, it will be payable in conformity with MEI’s customary payroll practices for
executive bonuses. Either Board may also award additional bonuses or other compensation to
Executive at any time in its sole and complete discretion.

     (c) MEI shall act as agent for MERI with respect to (i) the payment of MERI’s Base
Salary, Annual Bonus, and any other bonuses or compensation payable by MERI to Executive,
and (ii) coverage of Executive under the MEI employee benefit plans, including retirement,
welfare, deferral and incentive plans, all as provided in that certain Agency Agreement by
and between MEI and MERI, entered into as of March 2, 2006. Any salary, bonus, and other
compensation payments hereunder shall be subject to such payroll and other taxes,
withholdings, and deductions as may be required by applicable law or with respect to
Executive’s coverage in MEI’s employee benefit plans. Further, in the event Executive is no
longer employed by MERI but continues to be employed by MEI, MEI shall assume the financial
obligations described in this Section 3 and Executive’s MEI Base Salary, Annual Bonus and other forms of compensation may be
adjusted accordingly to reflect Executive’s duties with MEI.

     4. Term of Employment. The initial term of this Agreement shall be for the period
beginning on the Effective Date and ending at midnight (EST) on March 2, 2007 (the “Initial Term”).
On March 3, 2007 and on March 3 of each succeeding year (each such date being

 

 

referred to as a
“Renewal Date”), this Agreement shall automatically renew and extend for a period of 12 months (a
“Renewal Term”) unless written notice of non-renewal is delivered from an Employer to the Executive
(or the Executive to an Employer) at least 90 days prior to such Renewal Date (in which case the
Termination Date shall be the day immediately prior to such Renewal Date). Notwithstanding any
other provision of this Agreement, this Agreement may be terminated at any time during the Initial
Term or the Renewal Term (if any) in accordance with Section 6. The period from the Effective Date
through the Termination Date of this Agreement, regardless of the time or reason for such
termination, shall be referred to herein as the “Employment Period.” In the event that this
Agreement is not renewed by an Employer or by Executive with respect to either or both Employers,
Executive shall become an at-will employee of such Employer and such Employer shall have the right
to terminate Executive’s employment with the Employer at any time.

     5. Benefits. Subject to the terms and conditions of this Agreement, Executive shall be
entitled to the following benefits during the Employment Period:

     (a) Reimbursement of Business Expenses. Each Employer agrees to reimburse Executive
for reasonable business-related expenses incurred in the performance of Executive’s duties
under this Agreement in accordance with such Employer’s policies.

     (b) Benefit Plans and Programs. To the extent permitted by applicable law and subject
to the terms and eligibility requirements of any such plan or program, Executive will be
eligible to participate in all benefit plans and programs, including improvements or
modifications of the same, that are maintained by MEI generally for executive employees,
subject to the eligibility requirements and other terms and conditions of those plans and
programs. Neither MEI nor MERI will, however, by reason of this Section 5(b) be obligated
either (1) to institute, maintain, or refrain from changing, amending, or discontinuing any
such benefit plan or program, or (2) to provide Executive with all benefits provided to any
other person or individual employed by an Employer or any affiliates of an Employer.

     6. Termination of Employment.

     (a) Employer’s Right to Terminate. At any time during the Initial Term or any Renewal
Term, each Employer shall independently have the right to terminate this Agreement with
respect to itself and to terminate Executive’s employment with such Employer for any of the
following reasons:

     (1) Upon Executive’s death (in which case the Termination Date shall be the
date of Executive’s death);

     (2) Upon Executive’s Disability (as defined below);

     (3) For Cause (as defined in Section 7); or

     (4) For any other reason whatsoever, in the sole and complete discretion of the
Employer.

 

 

     (b) Executive’s Right to Terminate. At any time during the Initial Term or any Renewal
Term, Executive will have the right to terminate this Agreement and Executive’s employment
with either Employer for:

     (1) Good Reason (as defined in Section 7); or

     (2) For any other reason whatsoever, in the sole and complete discretion of
Executive.

     (c) “Disability.” For purposes of this Agreement, “Disability” means that Executive
has sustained sickness or injury that renders Executive incapable, with reasonable
accommodation, of performing the duties and services required of Executive hereunder for a
period of 90 consecutive calendar days or a total of 120 calendar days during any 12 month
period.

     (d) “Notices.” Any termination of this Agreement by an Employer under Section 6(a)
(other than termination due to the death of Executive), or by Executive under Section 6(b)
shall be communicated by a Notice of Termination to the other party. A “Notice of
Termination” means a written notice that (1) indicates the specific termination provision in
this Agreement relied upon and (2) if the termination is by an Employer for Cause or by
Executive for Good Reason, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive’s employment under the provision so
indicated. The Notice of Termination must specify the Termination Date. In the case of a
termination by an Employer for Cause or due to Executive’s Disability, or by Executive for
Good Reason, the Termination Date may be as early as the date notice is given but no later
than 30 calendar days after notice is given, unless otherwise agreed to in writing by both
parties. In the case of a termination by an Employer or by Executive for any other reason,
the Termination Date may be as early as 14 calendar days after notice is given but no later
than 60 calendar days after notice is given, unless otherwise agreed to by the parties in
writing.

     7. Severance Payments.

     (a) Termination by MEI. If (1) MEI terminates this Agreement and Executive’s
employment with MEI during the Initial Term or the Renewal Term (if any) pursuant to Section
6(a)(4), (2) Executive signs and does not revoke a waiver and release agreement
substantially similar to Exhibit B with respect to MEI, and (3) Executive continues to
comply with Executive’s ongoing obligations under Sections 11 and 12 of this Agreement,
then, subject to Section 7(h), MEI shall pay Executive
severance in an amount equal to 2.5 times the sum of Executive’s MEI Base Salary, his
MERI Base Salary, plus his Average Bonus Amount from each Employer. The Executive’s
“Average Bonus Amount” for purposes of Sections 7(a), 7(b) and 7(d) shall be the average
annual amount paid or payable to Executive as bonuses for the three calendar years ended
immediately prior to the Termination Date (or for the number of calendar years that
Executive has been an employee of MEI before the Termination Date, if less than three).
Such severance payment shall be in addition to payment by MEI of all previously unpaid
amounts (including, without limitation, salary, bonuses, equity plans, incentive
compensation plans, fringe benefits, and expense reimbursements) owed to Executive by either
Employer under this Agreement with respect to periods prior to the Termination Date.

 

 

     (b) Termination of MEI Employment by Executive. If (1) Executive terminates this
Agreement and Executive’s employment with MEI during the Initial Term or the Renewal Term
(if any) pursuant to Section 6(b)(1), (2) Executive signs and does not revoke a waiver and
release agreement substantially similar to Exhibit B with respect to MEI, and (3) Executive
continues to comply with Executive’s ongoing obligations under Sections 11 and 12 of this
Agreement, then, subject to Section 7(h), MEI shall pay Executive severance in an amount
equal to 2.5 times the sum of Executive’s MEI Base Salary, his MERI Base Salary, plus his
Average Bonus Amount from each Employer. Such severance payment shall be in addition to
payment by MEI of all previously unpaid amounts (including, without limitation, salary,
bonuses, equity plans, incentive compensation plans, fringe benefits, and expense
reimbursements) owed to Executive by either Employer under this Agreement with respect to
periods prior to the Termination Date.

     (c) Additional Benefits. If MEI is required to pay Executive severance by the express
terms of Section 7(a) or 7(b), then:

     (1) Executive, Executive’s spouse, and Executive’s dependents will continue to
be eligible for coverage under MEI’s group health plan or any successor plan on the
same basis as active executive employees of MEI, their spouses, and their dependents
for a period of eighteen months commencing on the date on which Executive’s
employment with the Company is terminated (the “Termination Date”) (the “Severance
Period”). If and when group health coverage under another employer’s plan is made
available to Executive, Executive’s spouse, or Executive’s dependents, MEI’s
obligations under this paragraph will cease with respect to each person to whom such
coverage is made available, notwithstanding that such person may not in fact become
covered under such other employer’s plan. Executive shall reimburse MEI for
Executive’s portion of the premium on a monthly basis.

     (2) Executive shall become 50% vested in all of the rights and interests
granted to Executive under MEI’s stock and other equity plans, including without
limitation any stock options, restricted stock, restricted stock units, performance
units, and/or performance shares to the extent Executive is less than 50% vested in
such award as of the Termination Date.

     (3) Payments under Sections 7(a) or 7)b) shall be in lieu of any severance
benefits otherwise due to Executive under any severance pay plan or program
maintained by MEI that covers its employees or executives generally.

     (d) Termination of MEI Employment in Event of Executive’s Disability. If (1) MEI
terminates Executive’s employment with MEI during the Initial Term or the Renewal Term (if
any) pursuant to Section 6(a)(2), (2) Executive signs and does not revoke a waiver and
release agreement substantially similar to Exhibit B with respect to MEI, and (3) Executive
continues to comply with Executive’s ongoing obligations under Section 11 and 12 of this
Agreement, then, subject to Section 7(h), MEI shall pay Executive severance in an amount
equal to 2.5 times the sum of Executive’s MEI Base Salary, his MERI Base Salary, plus his
Average Bonus Amount from each Employer. Such severance payment shall be in addition to
payment by MEI of all previously unpaid amounts (including, without limitation, salary,
bonuses, equity plans, incentive compensation plans, fringe benefits, and expense
reimbursements) owed to Executive

 

 

by either Employer under this Agreement with respect to
periods prior to the Termination Date.

     (e) Additional Disability Benefits. If MEI is required to pay Executive severance by
the express terms of Section 7(d), then:

     (1) Executive, Executive’s spouse, and Executive’s dependents will continue to
be eligible for coverage under MEI’s group health plan or any successor plan on the
same basis as active executive employees of MEI, their spouses, and their dependents
for the duration of the Severance Period. Executive shall reimburse MEI for
Executive’s portion of the premium on a monthly basis. If and when group health
coverage under another employer’s plan is made available to Executive, Executive’s
spouse, or Executive’s dependents, MEI’s obligations under this paragraph will cease
with respect to each person to whom such coverage is made available, notwithstanding
that such person may not in fact become covered under such other employer’s plan.

     (2) Executive shall become 50% vested in all of the rights and interests
granted to Executive under MEI’s stock and other equity plans, including without
limitation any stock options, restricted stock, restricted stock units, performance
units, and/or performance shares to the extent Executive is less than 50% vested in
such award as of the Termination Date.

     (3) Payments under this Section 7(e) shall be in lieu of any severance benefits
otherwise due to Executive under any severance pay plan or program maintained by MEI
that covers its employees or executives generally.

     (f) “Cause” means the occurrence or existence, prior to occurrence of circumstances
constituting Good Reason, of any of the following events:

     (1) Executive’s gross negligence or material mismanagement in performing, or
material failure or inability (excluding as a result of death or Disability) to
perform, Executive’s duties and responsibilities as described herein or as lawfully
directed by the respective Board or the Chief Executive Officer of either Employer;

     (2) Executive’s having committed any act of willful misconduct or material
dishonesty against the Employer or any of its affiliates (including theft,
misappropriation, embezzlement, forgery, fraud, falsification of records, or
misrepresentation) or any act that results in, or could reasonably be expected to
result in, material injury to the reputation, business or business
relationships of either Employer or any of their affiliates;

     (3) Executive’s material breach of this Agreement, any fiduciary duty owed by
Executive to an Employer or its affiliates, or any written workplace policies
applicable to Executive (including an Employer’s code of conduct and policy on
workplace harassment) whether adopted on or after the date of this Agreement;

     (4) Executive’s having been convicted of, or having entered a plea bargain, a
plea of nolo contendre or settlement admitting guilt for, any felony, any

 

 

crime of
moral turpitude, or any other crime that could reasonably be expected to have a
material adverse impact on an Employer’s or any of its affiliates’ reputations; or

     (5) Executive’s having committed any material violation of any federal law
regulating securities (without having relied on the advice of an Employer’s attorney
to perform required acts on the Chief Executive Officer’s behalf) or having been the
subject of any final order, judicial or administrative, obtained or issued by the
Securities and Exchange Commission, for any securities violation involving fraud,
including, for example, any such order consented to by Executive in which findings
of facts or any legal conclusions establishing liability are neither admitted nor
denied.

     (g) “Good Reason” means the occurrence, prior to occurrence of circumstances
constituting Cause, of any of the following events without Executive’s consent:

     (1) Any material breach by MEI of this Agreement, provided that Executive
provides the MEI Board written notice of such breach within 90 days from the first
date that he is aware, or reasonably should be aware, of such breach and such breach
is not remedied within 30 days of such Board’s receipt of such written notice;

     (2) Any requirement by MEI that Executive relocate outside of the Houston
metropolitan area;

     (3) Failure of any successor to assume this Agreement not later than the date
as of which it acquires substantially all of the equity, assets or businesses of
MEI;

     (4) Any material reduction in Executive’s title, responsibilities, or duties;
or

     (5) The assignment to Executive of any duties materially inconsistent with his
duties as Vice President of MEI.

     (h) Later Determinations. Notwithstanding any other provision of this Agreement, if
Executive’s employment with MEI is terminated such that Executive is entitled to severance
from MEI and within one year following such termination the MEI Board determines that Cause
exists or existed on, prior to, or after such termination,
Executive shall not be entitled to any severance from MEI, and any and all severance
payments from MEI to Executive in any form or amount shall cease and any such payments or
reimbursements already made to Executive must be returned to MEI.

     8. Change of Control of MEI.

     (a) Upon the termination of Executive’s employment with MEI for any reason other than
Cause at any time on or within nine months after a Change of Control of MEI that occurs
during the Employment Period or upon the occurrence of a Change of Control of MEI within
nine months following a termination of Executive’s employment that entitles Executive to
severance under Section 7(a) or 7(b), MEI shall pay Executive,

 

 

subject to Section 8(d)
below, an amount equal to 2.5 times the sum of Executive’s MEI Base Salary, his MERI Base
Salary, plus his Average Bonus Amount from each Employer. The Executive’s “Average Bonus
Amount” for purposes of this Section 8(a) shall be the average annual amount paid or payable
to Executive as bonuses for the three calendar years ended immediately prior to the
occurrence of the Change of Control (or for the number of calendar years that Executive has
been an employee of MEI before the occurrence of the Change of Control, if less than three);
provided that any payment otherwise payable under this Section 8(a) shall be subject to
Section 7(h) notwithstanding that such payment is not a severance payment.

     (b) Upon the occurrence of a Change of Control that occurs during the Employment Period
or within nine months following a termination of Executive’s employment that entitles
Executive to severance under Section 7(a) or 7(b), Executive shall become 100% vested in all
of the rights and interests granted to Executive under the MEI stock and other equity plans,
including without limitation any stock options, restricted stock, restricted stock units,
performance units, and/or performance shares to the extent Executive is less than 100%
vested in such award as of the Termination Date.

     (c) “Change of Control” means (i) after the Effective Date, any person or group of
affiliated or associated persons acquires more than 35% of the voting power of MEI; (ii) the
consummation of a sale of all or substantially all of the assets of MEI; (iii) the
dissolution of MEI; or (iv) the consummation of any merger, consolidation, or reorganization
involving MEI in which, immediately after giving effect to such merger, consolidation or
reorganization, less than 51% of the total voting power of outstanding stock of the
surviving or resulting entity is then “beneficially owned” (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders
of MEI immediately prior to such merger, consolidation or reorganization.

     (d) Except as provided below, such Change of Control payments shall be in addition to
payment by MEI of all other amounts (including, without limitation, salary, bonuses, equity
plans, incentive compensation plans, fringe benefits, and expense reimbursements) owed to
Executive by either Employer under other provisions of this Agreement. Notwithstanding the
foregoing, if on or before the Change of Control Executive becomes or has become entitled to
payment pursuant to Section 7(a) or 7(b), the amount payable under this Section 8 shall be
reduced by the amount paid or payable to Executive under Section 7(a) or 7(b).

 

 

     9. Gross-up Parachute Payment. In the event that Executive shall become entitled to any
amounts (the “Regular Amounts”), whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with MEI, any person whose actions result in a change of ownership covered
by Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), or any person
affiliated with MEI or such person, that will be subject to the tax (the “Excise Tax”) imposed by
Section 4999 of the Code (and any similar tax that may hereafter be imposed), MEI shall pay to
Executive an additional amount (the “Gross-up Payment”) such that the net amount retained by
Executive after payment of all applicable federal and state taxes on the sum of the Regular Amount
plus the Gross-up Payment, is equal to the net amount that would have been retained by Executive
after payment of all applicable federal and state taxes on the Regular Amount if it had not been
subject to the Excise Tax.

     10. Conflicts of Interest. Executive agrees that he shall promptly disclose to the MEI
Board and the MERI Board any conflict of interest involving Executive upon Executive becoming aware
of such conflict. Executive’s ownership of an interest not in excess of five percent in a business
organization that competes with an Employer shall not be deemed to constitute a conflict of
interest.

     11. Confidentiality. Each Employer agrees to provide Executive valuable Confidential
Information of the Employer and of third parties who have supplied such information to the
Employer. In consideration of such Confidential Information and other valuable consideration
provided hereunder, Executive agrees to comply with this Section 11.

     (a) “Confidential Information” means, without limitation and regardless of whether such
information or materials are expressly identified as confidential or proprietary, (i) any
and all non-public, confidential or proprietary information or work product of the Employer
or its affiliates, (ii) any information that gives the Employer or its affiliates a
competitive business advantage or the opportunity of obtaining such advantage, (iii) any
information the disclosure or improper use of which is reasonably expected to be detrimental
to the interests of the Employer or its affiliates, (iv) any trade secrets of the Employer
or its affiliates, and (v) any other information of or regarding the Employer or any of its
affiliates, or its or their past, present or future, direct or indirect, potential or actual
officers, directors, employees, owners, or business partners, including but not limited to
information regarding any of their businesses, operations, assets (including any Oil and Gas
Interests as defined below), liabilities, properties, systems, methods, models, processes,
results, performance, investments, investors, financial affairs, future plans, business
prospects, acquisition or investment opportunities, strategies, business partners, business
relationships, contracts, contractual relationships, organizational or personnel matters,
policies or procedures, management or compensation matters, compliance or regulatory
matters, as well as any technical, seismic, industry, market or other data, studies or
research, or any forecasts, projections, valuations, derivations or other analyses,
performed, generated, collected, gathered, synthesized, purchased or owned by, or otherwise
in the possession of, the Employer or its affiliates or which Executive has learned of
through his employment with the Employer. Confidential Information also includes any
non-public, confidential or proprietary information about or belonging to any third party
which has been entrusted to
the Employer or its affiliates. Notwithstanding the foregoing, Confidential
Information does not include any information which is or becomes generally known by the
public other than as a result of Executive’s actions or inactions. “Oil and Gas Interests”
means: (a) direct and indirect interests in and rights with respect to oil, gas, mineral
and related properties (including revenues or net revenues therefrom) and assets of any kind

 

 

and nature, direct or indirect, including without limitation working, royalty and overriding
royalty interests, mineral interests, leasehold interests, production payments, operating
rights, net profits interests, other non-working interests and non-operating interests; (b)
interests in and rights with respect to Hydrocarbons and other minerals or revenues
therefrom and contracts or agreements in connection therewith and claims and rights thereto
(including oil and gas leases, operating agreements, unitization and pooling agreements and
orders, division orders, transfer orders, mineral deeds, royalty deeds, oil and gas sales,
exchange and processing contracts and agreements and, in each case, interests thereunder),
surface interests, fee interests, reversionary interests, reservations and concessions; (c)
easements, rights of way, licenses, permits, leases, and other interests associated with,
appurtenant to, or necessary for the operation of any of the foregoing; and (d) interests in
equipment and machinery (including well equipment and machinery), oil and gas production,
gathering, transmission, compression, treating, processing and storage facilities (including
tanks, tank batteries, pipelines and gathering systems), pumps, water plants, electric
plants, gasoline and gas processing plants, refineries and other tangible personal property
and fixtures associated with, appurtenant to, or necessary for the operation of any of the
foregoing, regardless of location. “Hydrocarbons” means oil, condensate gas, casinghead gas
and other liquid or gaseous hydrocarbons.

     (b) Protection. In return for the Employer’s promise to provide Executive with
Confidential Information, Executive promises (i) to keep the Confidential Information, and
all documentation, materials and information relating thereto, strictly confidential, (ii)
not to use the Confidential Information for any purpose other than as required in connection
with fulfilling his duties for the benefit of the Employer, and (iii) to return to the
Employer all documents containing Confidential Information in Executive’s possession upon
separation from the Employer for any reason. For the sake of clarity, Executive
specifically acknowledges and agrees that (x) the definition of Confidential Information in
Section 11(a) includes (but is not limited to) any nonpublic information about the Oil and
Gas Interests (as defined above) and any other assets, investments, properties, sites or
locations in which the Employer or its affiliates have an ownership or other interest or
right, as well as any Oil and Gas Interests (as defined above), assets, investments,
properties, sites, locations, acquisitions or other business prospects upon which the
Employer or its affiliates have expended resources in the past, are currently expending
resources, or are contemplating expending resources in the future, and (y) that any use by
Executive of such Confidential Information other than as required in connection with
fulfilling his duties as Executive for the benefit of the Employer will be a material breach
of this Agreement. The immediately preceding sentence has been included for the purpose of
highlighting certain aspects of the foregoing covenants and shall in no event be read to
limit or narrow the foregoing covenants.

     (c) Scope. Executive understands and agrees that all Confidential Information, in
whatever medium (verbal, written, electronic or other), is subject to this Agreement whether
provided directly to Executive or not, whether provided to Executive prior to the Effective
Date of this Agreement or not, and whether inadvertently disclosed to Executive or not.
Confidential Information which was or is available to Executive or to
which Executive had or has access will be deemed to have been provided to Executive.
Executive also hereby agrees that Confidential Information shall be deemed to include
information regarding the assets of the Employer, even if such information was learned by
Executive prior to formation of the Employer.

 

 

     (d) Value and Security. Executive understands and agrees that all Confidential
Information, and every portion thereof, constitutes the valuable intellectual property of
the Employer, its affiliates, and/or third parties, and Executive further acknowledges the
importance of maintaining the security and confidentiality of the Confidential Information
and of not misusing the Confidential Information.

     (e) Disclosure Required By Law. If Executive is legally required to disclose any
Confidential Information, Executive shall promptly notify the Employer in writing of such
request or requirement so that the Employer may seek an appropriate protective order or
other relief. Executive agrees to cooperate with and not to oppose any effort by the
Employer to resist or narrow such request or to seek a protective order or other appropriate
remedy. In any case, Executive will (a) disclose only that portion of the Confidential
Information that, according to the advice of Executive’s counsel, is required to be
disclosed (and Executive’s disclosure of Confidential Information to Executive’s counsel in
connection with obtaining such advice shall not be a violation of this Agreement), (b) use
reasonable efforts (at the expense of the Employer) to obtain assurances that such
Confidential Information will be treated confidentially, and (c) promptly notify the
Employer in writing of the items of Confidential Information so disclosed.

     (f) Third-Party Confidentiality Agreements. To the extent that the Employer possesses
any Confidential Information which is subject to any confidentiality agreements with, or
obligations to, third parties, Executive will comply with all such agreements or obligations
in full. The immediately preceding sentence shall apply only if the Employer has provided
Executive with a copy of such agreements, and Executive may disclose such agreements and any
related Confidential Information to the Employer’s attorneys and rely on their advice
regarding compliance therewith.

     (g) Survival. The covenants made by Executive in this Section 11, other than Paragraph
(f) hereof, will be effective only during the Employment Period and for the two-year period
immediately following the Employment Period, and to that extent (and only that extent) shall
survive termination of this Agreement. The covenants made by Executive in Paragraph (f) of
this Section 11 will be effective during the period specified in the confidentiality
agreements described therein.

     12. No Solicitation. Executive shall not, for a period of one year after the Termination
Date, either as principal, agent, independent contractor, consultant, director, officer, employee,
employer, advisor, stockholder, partner, member, joint venturer, owner or in any other individual
or representative capacity whatsoever, whether paid or unpaid, either for his own benefit or for
the benefit of any other person or entity, either (A) contact or solicit, with respect to hiring,
any person known by Executive to be or to have been, at any time during the 12-month period
immediately preceding the Termination Date, an employee of an Employer or its affiliates, or (B)
induce or otherwise counsel, advise or encourage any employee of an Employer or its affiliates to
leave the employment of an Employer or their respective employment with such Employer’s affiliates,
as
the case may be; provided, however, that this restriction shall not apply to any solicitations
contained in an advertisement directed generally to the public or the trade, nor to any contacts
resulting from such a solicitation. If Executive fails to comply with this Section 12, the
Employer shall be entitled to, among other remedies, compliance by Executive with the terms of this
section for an additional period of time that shall equal the period over which such noncompliance
occurred. Notwithstanding any other provision hereof, this Section 12 shall not apply (1) if the
Employer terminates Executive’s employment

 

 

with the Employer and its affiliates pursuant to Section
6(a)(4) or pursuant to delivery by the Employer to Executive of a notice of non-renewal in
accordance with Section 4, (2) if Executive terminates Executive’s employment with the Employer and
its affiliates pursuant to Section 6(b)(1), or (3) after the occurrence of a Change of Control.

     13. Defense of Claims. Executive agrees that, during the Employment Period and for a
period of 36 months after the Termination Date, upon request from an Employer, Executive will
cooperate with an Employer and its affiliates in the defense of any claims or actions that may be
made by or against an Employer or any of its affiliates that relate to Executive’s prior areas of
responsibility, except if Executive’s reasonable interests are adverse to such Employer or
affiliates in such claim or action. If Executive is not an employee of an Employer or an affiliate
at such time, the Employer agrees to compensate Executive for his time spent on such matters at the
rate of $150 per hour, and in addition, to pay or reimburse Executive for all of Executive’s
reasonable travel and other direct expenses incurred, or to be reasonably incurred, to comply with
Executive’s obligations under this Section 13, provided Executive provides reasonable documentation
of same.

     14. Withholdings: Right of Offset. An Employer (or its agent) may withhold and deduct from
any payments made or to be made pursuant to this Agreement (a) all federal, state, local and other
taxes as may be required pursuant to any law or governmental regulation or ruling, (b) any
deductions consented to in writing by Executive, and (c) any other sums owed by Executive to the
Employer, any affiliate, or any employee benefit plan or program of the Employer or any affiliate.

     15. Severability. It is the desire of the parties hereto that this Agreement be enforced
to the maximum extent permitted by law, and should any provision contained herein be held
unenforceable by a court of competent jurisdiction or arbitrator (pursuant to Section 17), the
parties hereby agree and consent that such provision shall be reformed to create a valid and
enforceable provision to the maximum extent permitted by law; provided, however, if such provision
cannot be reformed, it shall be deemed ineffective and deleted herefrom without affecting any other
provision of this Agreement.

     16. Title and Headings; Construction. Titles and headings to Sections hereof are for the
purpose of reference only and shall in no way limit, define or otherwise affect the provisions
hereof. Any and all Exhibits referred to in this Agreement are, by such reference, incorporated
herein and made a part hereof for all purposes. The words “herein”, “hereof”, “hereunder” and
other compounds of the word “here” shall refer to the entire Agreement and not to any particular
provision hereof.

     17. Arbitration; Injunctive Relief; Attorneys’ Fees.

     (a) Subject to Section 17(b), any dispute, controversy or claim between Executive and
an Employer arising out of or relating to this Agreement, Executive’s employment with an
Employer, or the termination of either will be finally settled by arbitration in Houston,
Texas before, and in accordance with the rules for the resolution of employment disputes
then obtaining of, the American Arbitration Association. The arbitrator’s award shall be
final and binding on all parties.

     (b) Notwithstanding Section 17(a), an application for emergency or temporary injunctive
relief by either party shall not be subject to arbitration under this Section 17; provided,
however, that the remainder of any such dispute (beyond the application for

 

 

emergency or
temporary injunctive relief) shall be subject to arbitration under this Section 17.
Executive acknowledges that Executive’s violation of Sections 11 and/or 12 of this Agreement
will cause irreparable harm to the Employer, Executive agrees not to contest that
Executive’s violation of Sections 11 and/or 12 of this Agreement will cause irreparable harm
to the Employer and Executive agrees that the Employer shall be entitled as a matter of
right to specific performance of Executive’s obligations under Sections 11 and 12 and an
injunction, from any court of competent jurisdiction, restraining any violation or further
violation of such agreements by Executive or others acting on his/her behalf, without any
showing of irreparable harm and without any showing that the Employer does not have an
adequate remedy at law. The Employer’s right to injunctive relief shall be cumulative and
in addition to any other remedies provided by law or equity.

     (c) Each party shall share equally the cost of the arbitrator and bear its own costs
and attorneys’ fees incurred in connection with any arbitration, unless a statutory claim
authorizing the award of attorneys’ fees is at issue, in which event the arbitrator may
award a reasonable attorneys’ fee in accordance with the jurisprudence of that statute.

     (d) Nothing in this Section 17 shall prohibit a party to this Agreement from (i)
instituting litigation to enforce any arbitration award or (ii) joining another party to
this Agreement in a litigation initiated by a person which is not a party to this Agreement.

     18. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS. THE EXCLUSIVE
VENUE FOR THE RESOLUTION OF ANY DISPUTE RELATING TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT (THAT
IS NOT SUBJECT TO ARBITRATION UNDER SECTION 17 FOR ANY REASON) SHALL BE IN THE STATE AND FEDERAL
COURTS LOCATED IN HARRIS COUNTY, TEXAS AND THE PARTIES HEREBY EXPRESSLY CONSENT TO THE JURISDICTION
OF THOSE COURTS.

     19. Entire Agreement and Amendment. This Agreement contains the entire agreement of the
parties with respect to Executive’s employment and the other matters covered herein (except to the
extent that other agreements
are specifically referenced herein); moreover, this Agreement supersedes all prior and
contemporaneous agreements and understandings, oral or written, between the parties hereto
concerning the subject matter hereof and thereof, specifically including the Employment Agreement
entered into by and between MEI and Executive as of February 7, 2005 and the Amended and Restated
Employment Agreement by and between MEI, MERI and Executive dated as of March 2, 2006. This
Agreement may be amended, waived or terminated only by a written instrument executed by both
parties hereto.

     20. Survival of Certain Provisions. Wherever appropriate to the intention of the parties
hereto, the respective rights and obligations of said parties, including, but not limited to, the
rights and obligations set forth in Sections 6 through 18 hereof, shall survive any termination or
expiration of this Agreement for any reason.

     21. Waiver of Breach. No waiver by a party hereto of a breach of any
provision of this Agreement by another party, or of compliance with any condition or provision of
this Agreement to be performed by such other party, will operate or be construed as a waiver of any
subsequent breach by such other party or any similar or dissimilar provision or condition at the

 

 

same or any subsequent time. The failure of a party hereto to take any action by reason of any breach will not
deprive such party of the right to take action at any time while such breach continues.

     22. Assignment. Neither this Agreement nor any rights or obligations hereunder shall be
assignable or otherwise subject to hypothecation by Executive (except by will or by operation of
the laws of intestate succession) or by either Employer, except that either Employer may assign
this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially
all of the equity, assets or businesses of such Employer, if such successor expressly agrees to
assume the obligations of such Employer hereunder.

     23. Notices. Notices provided for in this Agreement shall be in writing and shall be
deemed to have been duly received (a) when delivered in person or sent by facsimile transmission,
(b) on the first business day after such notice is sent by air express overnight courier service,
or (c) on the third business day following deposit in the United States mail, registered or
certified mail, return receipt requested, postage prepaid and addressed, to the following address,
as applicable:

	 	(1)	 	If to MEI, addressed to:
	 
	 	 	 	Mariner Energy, Inc.

Attn: Chief Executive Officer

One BriarLake Plaza, Suite 2000

2000 West Sam Houston Parkway South

Houston, TX 77042
	 
	 	(2)	 	If to MERI, addressed to:
	 
	 	 	 	Mariner Energy Resources, Inc.

Attn: Chief Executive Officer

One BriarLake Plaza, Suite 2000

2000 West Sam Houston Parkway South

Houston, TX 77042

	 	(3)	 	If to Executive, addressed to the address set forth below Executive’s name
on the execution page hereof;

or to such other address as either party may have furnished to the other party in writing in
accordance with this Section 23.

     24. Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a copy hereof containing
multiple signature pages, each signed by one party, but together signed by both parties hereto.

     25. Definitions. The parties agree that as used in this Agreement the following terms
shall have the following meanings: an “affiliate” of a person shall mean any person directly or
indirectly controlling, controlled by, or under common control with, such person; the terms
“controlling, controlled by, or under common control with” shall mean the possession, directly or
indirectly, of the power to direct or influence or cause the direction or influence of

 

 

management or policies (whether through ownership of securities or other ownership interest or right, by
contract or otherwise) of a person; the term “person” shall mean a natural person, partnership
(general or limited), limited liability company, trust, estate, association, corporation,
custodian, nominee, or any other individual or entity in its own or any representative capacity, in
each case, whether domestic or foreign.

     26. Code Section 409A Compliance. Notwithstanding anything in this Agreement to the
contrary, if any provision hereof would result in the imposition of an additional tax under Code
Section 409A and related regulations and Treasury pronouncements (“Section 409A”), that provision
will be reformed to avoid imposition of the applicable tax and no action taken to comply with
Section 409A shall be deemed to adversely affect Executive’s rights hereunder.

SIGNATURE PAGE FOLLOWS

 

 

     IN WITNESS WHEREOF, Executive, MEI and MERI have executed this Agreement to be effective for
all purposes as of the Effective Date.

	 	 	 	 	 
	 	 	EXECUTIVE:
	 
	 	 	 	 
	 

	 	Signature:
	 	/s/ Judd Hansen
	 

	 	 	 	 
	 

	 	 	 	Judd Hansen

	 	 	 	 	 
	 

	 	Date:
	 	June 8, 2006
	 
	 	 	 	 
	 

	 	 	 	     Address for Notices:
	 
	 	 	 	 
	 

	 	 	 	     15718 Woodcroft Dr.
	 

	 	 	 	     Houston, TX 77095

	 	 	 	 	 
	 	 	MARINER ENERGY, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Scott D. Josey
	 

	 	 	 	 
	 

	 	 	 	     Scott D. Josey
	 

	 	 	 	     Chief Executive Officer and President

	 	 	 	 	 
	 

	 	Date:
	 	June 8, 2006

	 	 	 	 	 
	 	 	MARINER ENERGY RESOURCES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Scott D. Josey
	 

	 	 	 	 
	 

	 	 	 	     Scott D. Josey
	 

	 	 	 	     Chief Executive Officer and President

	 	 	 	 	 
	 

	 	Date:
	 	June 8, 2006

 

 

Exhibit A

None

A-1

 

Exhibit B

WAIVER AND RELEASE AGREEMENT

     This Waiver and Release Agreement (the “Agreement”) is between Mariner Energy, Inc., a
Delaware corporation, (“Employer”) and Judd Hansen (“Executive”), as provided pursuant to the
Second Amended and Restated Employment Agreement between Executive, Employer and Mariner Energy
Resources, Inc., a Delaware corporation (“MERI”), dated June ___, 2006 (the “Employment Agreement”)
and attached hereto as Exhibit A.

     WHEREAS, Executive’s employment with Employer is being terminated; and

     WHEREAS, Executive will be paid certain severance benefits in exchange for his release and
waiver of his claims against the Employer Releasee (as defined below) pursuant to this Agreement;

     NOW, THEREFORE, the parties agree to the following.

     1. Complete Release and Other Consideration from Executive. In exchange for the severance
benefits provided under Section 2 of this Agreement, Executive agrees as follows:

     (a) Complete Release. On behalf of Executive and Executive’s heirs and
assigns, Executive fully releases Employer and its direct and indirect, past present and
future, parents, subsidiaries (including without limitation MERI), affiliates, divisions,
predecessors, successors, and assigns, and, with respect to all such entities, their
partners, members, shareholders, owners, officers, directors, attorneys, agents,
representatives and employees (collectively, the “Employer Releasees”), from any and all
claims, demands, damages, losses, expenses, liabilities and causes of action (including
claims for attorneys’ fees) (collectively, “Claims”), known or unknown, that Executive, his
heirs, executors, administrators, and assigns may have or may claim to have against any of
the Employer Releasees based upon facts occurring on or prior to the date Executive signs
this Agreement, including but not limited to any claims arising out of Executive’s
employment relationship with and service as an employee, officer or director of Employer or
MERI, and the termination of such relationship or service, (the “Release”); provided,
however, that this Release shall not apply to Employer’s obligations under this Agreement.
This Release includes, without limitation, any claims arising out of any contract (express
or implied); any tort (whether based on negligent, grossly negligent, or intentional
conduct); or any federal, state, or local law, including, without limitation, the Age
Discrimination in Employment Act and the Employee Retirement Income Security Act (“ERISA”),
other than benefits that Executive is entitled to under the terms of an ERISA plan. This
Release does not include any claims under the Age Discrimination in Employment Act that may
arise after this Agreement is executed.

     (b) Confidentiality. Except as may be required by law or court order or as may
be necessary in an action arising out of this Agreement, Executive agrees not to disclose
the existence or terms of this Agreement to anyone other than Executive’s
immediate family, attorneys, tax advisors, and financial counselors, provided that

B-1

 

Executive first informs them of this confidentiality clause and secures their agreement to
be bound by it. Executive understands and agrees that a breach of this confidentiality
provision by any of these authorized persons will be deemed a material breach of this
Agreement by Executive.

     (c) Executive agrees not to bring or join any lawsuit against any of the Employer
Releasees in any court (except as necessary to protect Executive’s rights under this
Agreement or with respect to Executive’s entry into this Agreement) relating to Executive’s
employment, events occurring during Executive’s employment or the termination of Executive’s
employment. Executive represents that, as of the effective date of this Agreement,
Executive has not brought or joined any lawsuit or filed any charge or claim against any of
the Employer Releasees in any court or before any government agency. If Executive brings or
joins any lawsuit against any of the Employer Releasees in any court (except as necessary to
protect Executive’s rights under this Agreement or with respect to Executive’s entry into
this Agreement) relating to Executive’s employment, events occurring during Executive’s
employment or the termination of Executive’s employment, and Executive is the prevailing
party in such lawsuit, Executive shall be obligated to return to the Employer all amounts
paid to Executive as benefits under this Agreement, to the extent permitted under applicable
law and ordered by the court. Further, if any Employer Releasee is the prevailing party in
any lawsuit Executive brings against such Employer Releasee relating to Executive’s
employment that has been waived in this Agreement, to the extent permitted by applicable law
(such as if Executive’s claims are found to be brought in bad faith), Executive agrees to
pay all costs and expenses incurred by such person or entity, including reasonable
attorneys’ fees, in defending against such lawsuit.

This Agreement is not intended to indicate that any Claims exist or that, if they do exist, they
are meritorious. Rather, Executive is simply agreeing that, in return for the Employer’s payment
provided by this Agreement, any and all potential Claims that Executive may have against the
Employer Releasees, regardless of whether they actually exist, are expressly settled, compromised
and waived. By signing this Agreement, Executive and the Employer Releasees are bound by it.
Anyone who succeeds to Executive’s rights and responsibilities, such as heirs or the executor of
Executive’s estate, is also bound by this Agreement. The waiver and release provisions of this
Agreement do not apply to any rights or claims that may arise after its effective date. This
Release also applies to any claims brought by any person or agency or class action under which
Executive may have a right or benefit.

     2. Consideration from Employers. In exchange for Executive’s obligations under this
Agreement, Employer shall pay Executive those severance payments and benefits described in Sections
7, 8, and 9, as applicable, of the Employment Agreement, which are incorporated herein by reference
and made a part of this Agreement. Executive acknowledges that Executive is not otherwise entitled
to receive such severance payments and benefits, these severance payments and benefits are
conditioned on Executive’s compliance with the terms of this Agreement and the Employment
Agreement, including without limitation Sections 11 and 12 thereof. Executive acknowledges and
agrees that Employer (or its agent) will withhold any taxes required by applicable law from the
severance payments and benefits.

     3. Right to Consult an Attorney; Period of Review. Executive is encouraged to consult with
an attorney before signing this Agreement. From the date this Agreement is first presented to
Executive, Executive will have 21 [45, if applicable] days in which to review this

B-2

 

Agreement. Executive may use as little or much of this 21 [45]-day review period as Executive chooses.

     4. Entire Agreement; Amendment; Continuing Obligations. This Agreement and the Employment
Agreement together contain the entire agreement of the parties with respect to the termination of
Executive’s employment and the other matters covered herein and therein; moreover, this Agreement
supersedes all prior and contemporaneous agreements and understandings, oral or written, between
the parties hereto concerning the subject matter hereof. This Agreement may be amended, waived or
terminated only by a written instrument executed by both parties hereto. Executive hereby
reaffirms and agrees to continue to abide by all of Executive’s continuing obligations under
Sections 11 through 18 of the Employment Agreement.

     5. Revocation. Upon signing this Agreement, Executive will have 7 days to revoke the
Agreement. To properly revoke the Agreement, Employer must receive written notice of revocation
from Executive by the close of business on the 7th day after the date the Agreement is signed by
Executive. Written notice must be delivered pursuant to Section 23 of the Employment Agreement.
Executive understands that failure to revoke his acceptance of this Agreement within 7 days after
the date he signs it will result in this Agreement being permanent and irrevocable.

     6. Choice of Law. This Agreement will be governed in all respects by the laws of the State
of Texas, without regard to its choice of law principles. This Agreement is subject to the
arbitration provisions in Section 17 of the Employment Agreement.

     7. Effectiveness of Agreement. This Agreement will be effective, and the severance
payments and benefits provided in Section 2 of this Agreement will be made and provided, only if
Executive executes this Agreement within 21 [45] days of receiving it and only if Executive does
not revoke this Agreement under Section 5 above.

B-3

 

	 	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 

	 	 	 	     Judd Hansen

	 	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 	 	MARINER ENERGY, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	          [Name, Title]

	 	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

B-4<PAGE>
                                                                   EXHIBIT 10.20

                              EMPLOYMENT AGREEMENT

      This Employment Agreement ("AGREEMENT") is made and entered into as of
February 7, 2005 (the "EFFECTIVE DATE"), by and between MARINER ENERGY, INC., a
Delaware corporation (hereafter "COMPANY"), and TERESA BUSHMAN (hereafter
"EXECUTIVE").

      1. EMPLOYMENT. During the Employment Period (as defined in Section 4
hereof), the Company shall employ Executive, and Executive shall serve, as Vice
President and General Counsel, reporting to the President or Chief Executive
Officer of the Company.

      2. DUTIES AND RESPONSIBILITIES OF EXECUTIVE.

            (a) During the Employment Period, Executive shall devote her full
      time and attention during normal business hours to the business of the
      Company, will act in the best interests of the Company and will perform
      with due care her duties and responsibilities. Executive's duties will
      include those normally incidental to the position of Vice President and
      General Counsel as well as whatever additional duties may be assigned to
      her by the Board of Directors of the Company (the "BOARD") or the Chief
      Executive Officer of the Company. Executive agrees to cooperate fully with
      the Board and the Chief Executive Officer of the Company and not to engage
      in any activity that materially interferes with the performance of
      Executive's duties hereunder. During the Employment Period, Executive will
      not hold outside employment without the advance written approval of the
      Board. Provided that it shall not be a violation of this Agreement for
      Executive to (1) serve on corporate, civic, or charitable boards or
      committees (except for boards or committees of a business organization
      that competes with the Company in any business in which the Company is
      regularly engaged), which are listed on EXHIBIT A so long as such service
      does not materially interfere with the performance of Executive's duties
      and responsibilities under this Agreement, as determined in the good faith
      opinion of the Board, (2) manage personal investments, or (3) take
      vacation days and reasonable absences due to injury or illness, as set
      forth herein and/or permitted by the general policies of the Company.

            (b) Executive represents and covenants to the Company that she is
      not subject or a party to any employment agreement, noncompetition
      covenant, nondisclosure agreement, or any other agreement, covenant,
      understanding, or restriction that would prohibit Executive from executing
      this Agreement and fully performing her duties and responsibilities
      hereunder, or would in any manner, directly or indirectly, limit or affect
      the duties and responsibilities that may now or in the future be assigned
      to Executive hereunder.

            (c) Executive acknowledges and agrees that Executive owes the
      Company a duty of loyalty and that the obligations described in this
      Agreement are in addition to, and not in lieu of, the obligations
      Executive owes the Company under the common law.

<PAGE>

      3. COMPENSATION.

            (a) During the Employment Period (as defined in Section 4 hereof),
      the Company shall pay to Executive an annualized base salary of $200,000
      (the "BASE SALARY") in consideration for Executive's services under this
      Agreement, payable on a not less than semi-monthly basis, in conformity
      with the Company's customary payroll practices for executive salaries. For
      all purposes of this Agreement, Executive's Base Salary shall include any
      portion thereof which is deferred under any nonqualified plan or
      arrangement. Each year, the Board shall review Executive's salary based on
      market survey data, corporate performance, and performance of Executive.
      If, in its sole and complete discretion, the Board determines that an
      increase in Executive's salary is appropriate, the Board may make such
      adjustment, and such adjusted salary shall thereafter be Executive's Base
      Salary for purposes of this Agreement. Executive's Base Salary may not be
      reduced except as part of a general reduction of salaries paid to
      management employees that is necessitated by business conditions, as
      determined by the Board.

            (b) Executive may be eligible for an annual discretionary
      performance bonus with respect to each calendar year during the Employment
      Period (the "ANNUAL BONUS"). The amount, if any, of Executive's Annual
      Bonus will be determined by the Board in its sole and complete discretion
      based on market survey data, corporate performance, and performance of
      Executive. Bonus determinations will be made by the Board at a time
      convenient to the Board but typically within 60 calendar days of the end
      of each calendar year. The Board will, on an annual basis (at or near the
      beginning of each calendar year in the Employment Period) establish a
      target bonus for Executive for the upcoming year, and will communicate
      such target to Executive. If the Board determines to award Executive an
      Annual Bonus, it will be payable in conformity with the Company's
      customary payroll practices for executive bonuses. The Board may also
      award additional bonuses or other compensation to Executive at any time in
      its sole and complete discretion.

            (c) Any salary, bonus, and other compensation payments hereunder
      shall be subject to such payroll and other taxes, withholdings, and
      deductions as may be required by applicable law or with respect to
      Executive's coverage in the Company's insurance and other employee benefit
      plans.

      4. TERM OF EMPLOYMENT. The initial term of this Agreement shall be for the
period beginning on the Effective Date and ending at midnight (EST) on March 2,
2006 (the "INITIAL TERM"); provided, however, that if the Company consummates an
initial public offering of its common stock prior to March 3, 2006, the Initial
Term shall end on March 2, 2007. For all purposes of this Agreement, the
consummation of a sale under Rule 144A and/or Regulation D of equity securities
of the Company shall be treated as the consummation of an initial public
offering by the Company. On March 3, 2006 (or 2007, if applicable) and on March
3 of each succeeding year (each such date being referred to as a "RENEWAL
DATE"), this Agreement shall automatically renew and extend for a period of 12
months (a "RENEWAL TERM") unless written notice of non-renewal is delivered from
one party to the other at least 90 days prior to such

                                       2

<PAGE>

Renewal Date (in which case the Termination Date shall be the day immediately
prior to such Renewal Date). Notwithstanding any other provision of this
Agreement, this Agreement may be terminated at any time during the Initial Term
or the Renewal Term (if any) in accordance with Section 6. The period from the
Effective Date through the Termination Date of this Agreement, regardless of the
time or reason for such termination, shall be referred to herein as the
"EMPLOYMENT PERIOD." In the event that this Agreement is not renewed, Executive
shall become an at-will employee of the Company and the Company shall have the
right to terminate Executive's employment with the Company at any time.

      5. BENEFITS. Subject to the terms and conditions of this Agreement,
Executive shall be entitled to the following benefits during the Employment
Period:

            (a) REIMBURSEMENT OF BUSINESS EXPENSES. The Company agrees to
      reimburse Executive for reasonable business-related expenses incurred in
      the performance of Executive's duties under this Agreement.

            (b) BENEFIT PLANS AND PROGRAMS. To the extent permitted by
      applicable law and subject to the terms and eligibility requirements of
      any such plan or program, Executive will be eligible to participate in all
      benefit plans and programs, including improvements or modifications of the
      same, that are maintained by the Company generally for executive employees
      of the Company, subject to the eligibility requirements and other terms
      and conditions of those plans and programs. The Company will not, however,
      by reason of this Section 5(b) be obligated either (1) to institute,
      maintain, or refrain from changing, amending, or discontinuing any such
      benefit plan or program, or (2) to provide Executive with all benefits
      provided to any other person or individual employed by the Company or any
      of its affiliates.

      6. TERMINATION OF EMPLOYMENT.

            (a) COMPANY'S RIGHT TO TERMINATE. At any time during the Initial
      Term or any Renewal Term, the Company shall have the right to terminate
      this Agreement and Executive's employment with the Company for any of the
      following reasons:

                  (1) Upon Executive's death (in which case the Termination Date
            shall be the date of Executive's death);

                  (2) Upon Executive's Disability (as defined below);

                  (3) For Cause (as defined in Section 7); or

                  (4) For any other reason whatsoever, in the sole and complete
            discretion of the Company.

            (b) EXECUTIVE'S RIGHT TO TERMINATE. At any time during the Initial
      Term or any Renewal Term, Executive will have the right to terminate this
      Agreement and Executive's employment with the Company for:

                  (1) Good Reason (as defined in Section 7); or

                                       3
<PAGE>

                  (2) For any other reason whatsoever, in the sole and complete
            discretion of Executive.

            (c) "DISABILITY." For purposes of this Agreement, "Disability" means
      that Executive has sustained sickness or injury that renders Executive
      incapable of performing the duties and services required of Executive
      hereunder for a period of 90 consecutive calendar days or a total of 120
      calendar days during any 12 month period.

            (d) "NOTICES." Any termination of this Agreement by the Company
      under Section 6(a) (other than termination due to the death of Executive),
      or by Executive under Section 6(b) shall be communicated by a Notice of
      Termination to the other party. A "Notice of Termination" means a written
      notice that (1) indicates the specific termination provision in this
      Agreement relied upon and (2) if the termination is by the Company for
      Cause or by Executive for Good Reason, sets forth in reasonable detail the
      facts and circumstances claimed to provide a basis for termination of
      Executive's employment under the provision so indicated. The Notice of
      Termination must specify the Termination Date. In the case of a
      termination by the Company for Cause or due to Executive's Disability, or
      by Executive for Good Reason, the Termination Date may be as early as the
      date notice is given but no later than 30 calendar days after notice is
      given, unless otherwise agreed to in writing by both parties. In the case
      of a termination by the Company or by Executive for any other reason, the
      Termination Date may be as early as 14 calendar days after notice is given
      but no later than 60 calendar days after notice is given, unless otherwise
      agreed to by the parties in writing.

      7. SEVERANCE PAYMENTS.

            (a) TERMINATION BY the Company. If (1) the Company terminates this
      Agreement and Executive's employment with the Company and its affiliates
      during the Initial Term or the Renewal Term (if any) pursuant to Section
      6(a)(4), (2) Executive signs and does not revoke a waiver and release
      agreement substantially similar to Exhibit B, and (3) Executive continues
      to comply with Executive's ongoing obligations under Sections 11 and 12 of
      this Agreement, then, subject to Section 7(h), the Company shall pay
      Executive severance in accordance with Section 7(c). Such severance
      payments shall be in addition to payment by the Company of all previously
      unpaid amounts (including, without limitation, salary, bonuses, equity
      plans, incentive compensation plans, fringe benefits, and expense
      reimbursements) owed to Executive under this Agreement with respect to
      periods prior to the Termination Date.

            (b) TERMINATION BY EXECUTIVE. If (1) Executive terminates this
      Agreement and Executive's employment with the Company and its affiliates
      during the Initial Term or the Renewal Term (if any) pursuant to Section
      6(b)(1), (2) Executive signs and does not revoke a waiver and release
      agreement substantially similar to Exhibit B, and (3) Executive continues
      to comply with Executive's ongoing obligations under Sections 11 and 12 of
      this Agreement, then, subject to Section 7(h), the Company shall pay
      Executive severance in accordance with Section 7(c). Such severance
      payments shall be in addition to payment by the Company of all previously
      unpaid amounts (including, without limitation, salary, bonuses, equity
      plans, incentive compensation plans, fringe benefits,

                                       4
<PAGE>

      and expense reimbursements) owed to Executive under this Agreement with
      respect to periods prior to the Termination Date.

            (c) SEVERANCE AMOUNT. If the Company is required to pay Executive
      severance by the express terms of Section 7(a) or 7(b), the Company shall
      pay Executive the following as severance:

                  (1) Executive's Base Salary at the highest rate in effect
            prior to the Termination Date as salary continuation for a period of
            eighteen months commencing on the date on which Executive's
            employment with the Company is terminated (the "TERMINATION DATE")
            (the "SEVERANCE PERIOD"), payable in equal monthly installments
            pursuant to the Company's customary payroll practices for executive
            salaries; provided, however, that, at the option of the Company, the
            amounts payable under this Section 7(c) may be paid by the Company
            in one lump sum.

                  (2) Executive, Executive's spouse, and Executive's dependents
            will continue to be eligible for coverage under the Company's group
            health plan or any successor plan on the same basis as active
            executive employees of the Company, their spouses, and their
            dependents for the duration of the Severance Period. If and when
            group health coverage under another employer's plan is made
            available to Executive, Executive's spouse, or Executive's
            dependents, the Company's obligations under this paragraph will
            cease with respect to each person to whom such coverage is made
            available, notwithstanding that such person may not in fact become
            covered under such other employer's plan. Executive's portion of the
            premium for such coverage shall be withheld from the salary
            continuation payments described in paragraph (1) immediately above
            or, if salary continuation has been paid in a lump sum, Executive
            shall reimburse the Company for Executive's portion of the premium
            on a monthly basis.

                  (3) An amount equal to the sum of amounts paid or payable to
            Executive as bonuses by the Company for the year prior to the year
            in which the Termination Date occurs. This amount will be payable in
            one lump sum, to Executive within 30 days after the end of the
            Severance Period.

                  (4) Executive shall become 100% vested in all of the shares of
            restricted stock granted to Executive under the Mariner Energy, Inc.
            Equity Participation Plan to the extent Executive is less than 100%
            vested in such shares as of the Termination Date.

                  (5) Executive shall become 50% vested in all of the rights and
            interests granted to Executive under the Company's stock and other
            equity plans (other than the Mariner Energy, Inc. Equity
            Participation Plan), including without limitation any stock options,
            restricted stock, restricted stock units, performance units, and/or
            performance shares to the extent Executive is less than 50% vested
            in such award as of the Termination Date.

                                       5
<PAGE>

                  (6) Notwithstanding any other provision hereof, if the Company
            incurs an obligation to pay severance under this Section 7(c) in
            connection with the termination of Executive's employment after the
            consummation of an initial public offering by the Company, then,
            subject to Section 7(h), Executive shall be entitled to receive the
            amounts specified in Section 8(a) in lieu of the amounts specified
            in Sections 7(c)(1) and 7(c)(3).

                  (7) Payments under this Section 7(c) shall be in lieu of any
            severance benefits otherwise due to Executive under any severance
            pay plan or program maintained by the Company that covers its
            employees or executives generally. If Executive receives payment
            under Section 8(a), payments otherwise payable under Section 7(c)(1)
            shall terminate.

            (d) TERMINATION IN EVENT OF EXECUTIVE'S DISABILITY. If (1) the
      Company terminates Executive's employment with the Company and its
      affiliates during the Initial Term or the Renewal Term (if any) pursuant
      to Section 6(a)(2), (2) Executive signs and does not revoke a waiver and
      release agreement substantially similar to Exhibit B, and (3) Executive
      continues to comply with Executive's ongoing obligations under Section 11
      and 12 of this Agreement, then, subject to Section 7(h), the Company shall
      pay Executive the severance described in accordance with Section 7(e).
      Such severance payments shall be in addition to payment by the Company of
      all previously unpaid amounts (including, without limitation, salary,
      bonuses, equity plans, incentive compensation plans, fringe benefits, and
      expense reimbursements) owed to Executive under this Agreement with
      respect to periods prior to the Termination Date.

            (e) DISABILITY SEVERANCE. If the Company is required to pay
      Executive severance by the express terms of Section 7(d), the Company
      shall pay Executive the following as severance:

                  (1) Executive's Base Salary at the highest rate in effect
            prior to the Termination Date as salary continuation for the
            duration of the Severance Period, payable in equal monthly
            installments pursuant to the Company's customary payroll practices
            for executive salaries; provided, however, that, at the option of
            the Company, the amounts payable under this Section 7(e) may be paid
            by the Company in one lump sum.

                  (2) Executive, Executive's spouse, and Executive's dependents
            will continue to be eligible for coverage under the Company's group
            health plan or any successor plan on the same basis as active
            executive employees of the Company, their spouses, and their
            dependents for the duration of the Severance Period. Executive's
            portion of the premium for such coverage shall be withheld from the
            salary continuation payments described in paragraph (1) immediately
            above or, if salary continuation has been paid in a lump sum,
            Executive shall reimburse the Company for Executive's portion of the
            premium on a monthly basis. If and when group health coverage under
            another employer's plan is made available to Executive, Executive's
            spouse, or Executive's dependents, the Company's obligations under
            this paragraph will cease with respect to each

                                       6
<PAGE>

            person to whom such coverage is made available, notwithstanding that
            such person may not in fact become covered under such other
            employer's plan.

                  (3) An amount equal to the sum of amounts paid or payable to
            Executive as bonuses awarded by the Company for the calendar year
            prior to the calendar year in which the Termination Date occurs.
            This amount will be payable in one lump sum to Executive within 30
            days after the end of the Severance Period.

                  (4) Executive shall become 100% vested in all of the shares of
            restricted stock granted to Executive under the Mariner Energy, Inc.
            Equity Participation Plan to the extent Executive is less than 100%
            vested in such shares as of the Termination Date.

                  (5) Executive shall become 50% vested in all of the rights and
            interests granted to Executive under the Company's stock and other
            equity plans (other than the Mariner Energy, Inc. Equity
            Participation Plan), including without limitation any stock options,
            restricted stock, restricted stock units, performance units, and/or
            performance shares to the extent Executive is less than 50% vested
            in such award as of the Termination Date.

                  (6) Notwithstanding any other provision hereof, if the Company
            incurs an obligation to pay severance under this Section 7(e) in
            connection with termination of Executive's employment after the
            consummation of an initial public offering by the Company, then,
            subject to Section 7(h), Executive shall be entitled to receive the
            amounts specified in Section 8(a) in lieu of the amounts specified
            in Sections 7(e)(1) and 7(e)(3).

                  (7) Payments under this Section 7(e) shall be in lieu of any
            severance benefits otherwise due to Executive under any severance
            pay plan or program maintained by the Company that covers its
            employees or executives generally.

            (f) "CAUSE" means the occurrence or existence, prior to occurrence
      of circumstances constituting Good Reason, of any of the following events:

                  (1) Executive's gross negligence or material mismanagement in
            performing, or material failure or inability (excluding as a result
            of death or Disability) to perform, Executive's duties and
            responsibilities as described herein or as lawfully directed by the
            Board or the Chief Executive Officer of the Company;

                  (2) Executive's having committed any act of willful misconduct
            or material dishonesty against the Company or any of its affiliates
            (including theft, misappropriation, embezzlement, forgery, fraud,
            falsification of records, or misrepresentation) or any act that
            results in, or could reasonably be expected to result in, material
            injury to the reputation, business or business relationships of the
            Company or any of its affiliates;

                                       7
<PAGE>

                  (3) Executive's material breach of this Agreement, any
            fiduciary duty owed by Executive to the Company or its affiliates,
            or any written workplace policies applicable to Executive (including
            the Company's code of conduct and policy on workplace harassment)
            whether adopted on or after the date of this Agreement;

                  (4) Executive's having been convicted of, or having entered a
            plea bargain, a plea of nolo contendre or settlement admitting guilt
            for, any felony, any crime of moral turpitude, or any other crime
            that could reasonably be expected to have a material adverse impact
            on the Company's or any of its affiliates' reputations; or

                  (5) Executive's having committed any material violation of any
            federal law regulating securities (without having relied on the
            advice of the Company's attorney to perform required acts on the
            Chief Executive Officer's behalf) or having been the subject of any
            final order, judicial or administrative, obtained or issued by the
            Securities and Exchange Commission, for any securities violation
            involving fraud, including, for example, any such order consented to
            by Executive in which findings of facts or any legal conclusions
            establishing liability are neither admitted nor denied.

            (g) "GOOD REASON" means the occurrence, prior to occurrence of
      circumstances constituting Cause, of any of the following events without
      Executive's consent:

                  (1) Any material breach by the Company of this Agreement,
            provided that Executive provides the Board written notice of such
            breach within 90 days from the first date that she is aware, or
            reasonably should be aware, of such breach and such breach is not
            remedied within 30 days of the Board's receipt of such written
            notice;

                  (2) Any requirement by the Company that Executive relocate
            outside of the Houston metropolitan area;

                  (3) Failure of any successor to assume this Agreement not
            later than the date as of which it acquires substantially all of the
            equity, assets or businesses of the Company;

                  (4) Any material reduction in Executive's title,
            responsibilities, or duties or the Board directs Executive to cease
            reporting to the President or Chief Executive Officer of the
            Company; or

                  (5) The assignment to Executive of any duties materially
            inconsistent with her duties as Vice President and General Counsel
            of the Company.

            (h) LATER DETERMINATIONS. Notwithstanding any other provision of
      this Agreement, if Executive's employment with the Company is terminated
      such that Executive is entitled to severance from the Company and within
      one year following such

                                       8
<PAGE>

      termination the Board determines that Cause exists or existed on, prior
      to, or after such termination, Executive shall not be entitled to any
      severance from the Company, and any and all severance payments from the
      Company to Executive in any form or amount shall cease and any such
      payments or reimbursements already made to Executive must be returned to
      the Company.

      8. CHANGE OF CONTROL.

            (a) Upon the termination of Executive's employment with the Company
      for any reason other than Cause at any time on or within nine months after
      a Change of Control that occurs during the Employment Period or upon the
      occurrence of a Change of Control within nine months following a
      termination of Executive's employment that entitles Executive to severance
      under Section 7(c), the Company shall pay Executive, subject to Section
      8(d) below, an amount equal to 2.0 times the sum of Executive's Base
      Salary plus her Average Bonus Amount. The Executive's "Average Bonus
      Amount" shall be the average annual amount paid or payable to Executive as
      bonuses for the Company's three calendar years ended immediately prior to
      the occurrence of the Change of Control (or for the number of calendar
      years that Executive has been an employee of the Company before the
      occurrence of the Change of Control, if less than three); provided that
      any payment otherwise payable under this Section 8(a) shall be subject to
      Section 7(h) notwithstanding that such payment is not a severance payment.

            (b) Upon the occurrence of a Change of Control that occurs during
      the Employment Period or within nine months following a termination of
      Executive's employment that entitles Executive to severance under Section
      7(c), Executive shall become 100% vested in all of the rights and
      interests granted to Executive under the Company's stock and other equity
      plans, including without limitation any stock options, restricted stock,
      restricted stock units, performance units, and/or performance shares to
      the extent Executive is less than 100% vested in such award as of the
      Termination Date.

            (c) "Change of Control" means (i) after the Effective Date, any
      person or group of affiliated or associated persons acquires more than 35%
      of the voting power of the Company; (ii) the consummation of a sale of all
      or substantially all of the assets of the Company; (iii) the dissolution
      of the Company or (iv) the consummation of any merger, consolidation, or
      reorganization involving the Company in which, immediately after giving
      effect to such merger, consolidation or reorganization, less than 51% of
      the total voting power of outstanding stock of the surviving or resulting
      entity is then "beneficially owned" (within the meaning of Rule 13d-3
      under the Securities Exchange Act of 1934, as amended) in the aggregate by
      the stockholders of the Company immediately prior to such merger,
      consolidation or reorganization. Notwithstanding the foregoing, a Change
      of Control shall not include any acquisitions resulting from the
      consummation of the private placement offering of common stock of the
      Company under Rule 144A and/or Regulation D prior to March 31, 2005.

            (d) Except as provided below, such Change of Control payments shall
      be in addition to payment by the Company of all other amounts (including,
      without limitation, salary, bonuses, equity plans, incentive compensation
      plans, fringe benefits, and expense

                                       9
<PAGE>

      reimbursements) owed to Executive under other provisions of this
      Agreement. Notwithstanding the foregoing, if on or before the Change of
      Control Executive becomes or has become entitled to payment pursuant to
      Section 7(c), the amount payable under this Section 8 shall be reduced by
      the amount paid or payable to Executive under Section 7(c).

      9. GROSS-UP PARACHUTE PAYMENT. In the event that Executive shall become
entitled to any amounts (the "Regular Amounts"), whether pursuant to the terms
of this Agreement or any other plan, arrangement or agreement with the Company,
any person whose actions result in a change of ownership covered by Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended, or any person
affiliated with the Company or such person, that will be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code (and any similar tax that may
hereafter be imposed), the Company shall pay to Executive an additional amount
(the "Gross-up Payment") such that the net amount retained by Executive after
payment of all applicable federal and state taxes on the sum of the Regular
Amount plus the Gross-up Payment, is equal to the net amount that would have
been retained by Executive after payment of all applicable federal and state
taxes on the Regular Amount if it had not been subject to the Excise Tax.

      10. CONFLICTS OF INTEREST. Executive agrees that she shall promptly
disclose to the Board any conflict of interest involving Executive upon
Executive becoming aware of such conflict. Executive's ownership of an interest
not in excess of five percent in a business organization that competes with the
Company shall not be deemed to constitute a conflict of interest.

      11. CONFIDENTIALITY. The Company agrees to provide Executive valuable
Confidential Information of the Company and of third parties who have supplied
such information to the Company. In consideration of such Confidential
Information and other valuable consideration provided hereunder, Executive
agrees to comply with this Section 11.

            (a) "CONFIDENTIAL INFORMATION" means, without limitation and
      regardless of whether such information or materials are expressly
      identified as confidential or proprietary, (i) any and all non-public,
      confidential or proprietary information or work product of the Company or
      its affiliates, (ii) any information that gives the Company or its
      affiliates a competitive business advantage or the opportunity of
      obtaining such advantage, (iii) any information the disclosure or improper
      use of which is reasonably expected to be detrimental to the interests of
      the Company or its affiliates, (iv) any trade secrets of the Company or
      its affiliates, and (v) any other information of or regarding the Company
      or any of its affiliates, or its or their past, present or future, direct
      or indirect, potential or actual officers, directors, employees, owners,
      or business partners, including but not limited to information regarding
      any of their businesses, operations, assets (including any Oil and Gas
      Interests as defined below), liabilities, properties, systems, methods,
      models, processes, results, performance, investments, investors, financial
      affairs, future plans, business prospects, acquisition or investment
      opportunities, strategies, business partners, business relationships,
      contracts, contractual relationships, organizational or personnel matters,
      policies or procedures, management or compensation matters, compliance or
      regulatory matters, as well as any technical, seismic, industry, market or
      other data, studies or research, or any forecasts, projections,
      valuations,

                                       10
<PAGE>

      derivations or other analyses, performed, generated, collected, gathered,
      synthesized, purchased or owned by, or otherwise in the possession of, the
      Company or its affiliates or which Executive has learned of through her
      employment with the Company. Confidential Information also includes any
      non-public, confidential or proprietary information about or belonging to
      any third party which has been entrusted to the Company or its affiliates.
      Notwithstanding the foregoing, Confidential Information does not include
      any information which is or becomes generally known by the public other
      than as a result of Executive's actions or inactions. "OIL AND GAS
      INTERESTS" means: (a) direct and indirect interests in and rights with
      respect to oil, gas, mineral and related properties (including revenues or
      net revenues therefrom) and assets of any kind and nature, direct or
      indirect, including without limitation working, royalty and overriding
      royalty interests, mineral interests, leasehold interests, production
      payments, operating rights, net profits interests, other non-working
      interests and non-operating interests; (b) interests in and rights with
      respect to Hydrocarbons and other minerals or revenues therefrom and
      contracts or agreements in connection therewith and claims and rights
      thereto (including oil and gas leases, operating agreements, unitization
      and pooling agreements and orders, division orders, transfer orders,
      mineral deeds, royalty deeds, oil and gas sales, exchange and processing
      contracts and agreements and, in each case, interests thereunder), surface
      interests, fee interests, reversionary interests, reservations and
      concessions; (c) easements, rights of way, licenses, permits, leases, and
      other interests associated with, appurtenant to, or necessary for the
      operation of any of the foregoing; and (d) interests in equipment and
      machinery (including well equipment and machinery), oil and gas
      production, gathering, transmission, compression, treating, processing and
      storage facilities (including tanks, tank batteries, pipelines and
      gathering systems), pumps, water plants, electric plants, gasoline and gas
      processing plants, refineries and other tangible personal property and
      fixtures associated with, appurtenant to, or necessary for the operation
      of any of the foregoing, regardless of location. "HYDROCARBONS" means oil,
      condensate gas, casinghead gas and other liquid or gaseous hydrocarbons.

            (b) PROTECTION. In return for the Company's promise to provide
      Executive with Confidential Information, Executive promises (i) to keep
      the Confidential Information, and all documentation, materials and
      information relating thereto, strictly confidential, (ii) not to use the
      Confidential Information for any purpose other than as required in
      connection with fulfilling her duties as Vice President and General
      Counsel for the benefit of the Company, and (iii) to return to the Company
      all documents containing Confidential Information in Executive's
      possession upon separation from the Company for any reason. For the sake
      of clarity, Executive specifically acknowledges and agrees that (x) the
      definition of Confidential Information in Section 11(a) includes (but is
      not limited to) any nonpublic information about the Oil and Gas Interests
      (as defined above) and any other assets, investments, properties, sites or
      locations in which the Company or its affiliates have an ownership or
      other interest or right, as well as any Oil and Gas Interests (as defined
      above), assets, investments, properties, sites, locations, acquisitions or
      other business prospects upon which the Company or its affiliates have
      expended resources in the past, are currently expending resources, or are
      contemplating expending resources in the future, and (y) that any use by
      Executive of such Confidential Information other than as required in
      connection with fulfilling her duties as Executive

                                       11
<PAGE>

      for the benefit of the Company will be a material breach of this
      Agreement. The immediately preceding sentence has been included for the
      purpose of highlighting certain aspects of the foregoing covenants and
      shall in no event be read to limit or narrow the foregoing covenants.

            (c) SCOPE. Executive understands and agrees that all Confidential
      Information, in whatever medium (verbal, written, electronic or other), is
      subject to this Agreement whether provided directly to Executive or not,
      whether provided to Executive prior to the Effective Date of this
      Agreement or not, and whether inadvertently disclosed to Executive or not.
      Confidential Information which was or is available to Executive or to
      which Executive had or has access will be deemed to have been provided to
      Executive. Executive also hereby agrees that Confidential Information
      shall be deemed to include information regarding the assets of the
      Company, even if such information was learned by Executive prior to
      formation of the Company.

            (d) VALUE AND SECURITY. Executive understands and agrees that all
      Confidential Information, and every portion thereof, constitutes the
      valuable intellectual property of the Company, its affiliates, and/or
      third parties, and Executive further acknowledges the importance of
      maintaining the security and confidentiality of the Confidential
      Information and of not misusing the Confidential Information.

            (e) DISCLOSURE REQUIRED BY LAW. If Executive is legally required to
      disclose any Confidential Information, Executive shall promptly notify the
      Company in writing of such request or requirement so that the Company may
      seek an appropriate protective order or other relief. Executive agrees to
      cooperate with and not to oppose any effort by the Company to resist or
      narrow such request or to seek a protective order or other appropriate
      remedy. In any case, Executive will (a) disclose only that portion of the
      Confidential Information that, according to the advice of Executive's
      counsel, is required to be disclosed (and Executive's disclosure of
      Confidential Information to Executive's counsel in connection with
      obtaining such advice shall not be a violation of this Agreement), (b) use
      reasonable efforts (at the expense of the Company) to obtain assurances
      that such Confidential Information will be treated confidentially, and (c)
      promptly notify the Company in writing of the items of Confidential
      Information so disclosed.

            (f) THIRD-PARTY CONFIDENTIALITY AGREEMENTS. To the extent that the
      Company possesses any Confidential Information which is subject to any
      confidentiality agreements with, or obligations to, third parties,
      Executive will comply with all such agreements or obligations in full. The
      immediately preceding sentence shall apply only if the Company has
      provided Executive with a copy of such agreements, and Executive may
      disclose such agreements and any related Confidential Information to
      Company's attorneys and rely on their advice regarding compliance
      therewith.

            (g) SURVIVAL. The covenants made by Executive in this Section 11,
      other than Paragraph (f) hereof, will be effective only during the
      Employment Period and for the two-year period immediately following the
      Employment Period, and to that extent (and only that extent) shall survive
      termination of this Agreement. The covenants made by

                                       12
<PAGE>

      Executive in Paragraph (f) of this Section 11 will be effective during the
      period specified in the confidentiality agreements described therein.

      12. NO SOLICITATION. Executive shall not, for a period of one year after
the Termination Date, either as principal, agent, independent contractor,
consultant, director, officer, employee, employer, advisor, stockholder,
partner, member, joint venturer, owner or in any other individual or
representative capacity whatsoever, whether paid or unpaid, either for her own
benefit or for the benefit of any other person or entity, either (A) contact or
solicit, with respect to hiring, any person known by Executive to be or to have
been, at any time during the 12-month period immediately preceding the
Termination Date, an employee of the Company or its affiliates, or (B) induce or
otherwise counsel, advise or encourage any employee of the Company or its
affiliates to leave the employment of the Company or their respective employment
with the Company's affiliates, as the case may be; provided, however, that this
restriction shall not apply to any solicitations contained in an advertisement
directed generally to the public or the trade, nor to any contacts resulting
from such a solicitation. If Executive fails to comply with this Section 12, the
Company shall be entitled to, among other remedies, compliance by Executive with
the terms of this section for an additional period of time that shall equal the
period over which such noncompliance occurred. Notwithstanding any other
provision hereof, this Section 12 shall not apply (1) if the Company terminates
Executive's employment with the Company and its affiliates pursuant to Section
6(a)(4) or pursuant to delivery by the Company to Executive of a notice of
non-renewal in accordance with Section 4, (2) if Executive terminates
Executive's employment with the Company and its affiliates pursuant to Section
6(b)(1), or (3) after the occurrence of a Change of Control.

      13. DEFENSE OF CLAIMS. Executive agrees that, during the Employment Period
and for a period of 36 months after the Termination Date, upon request from the
Company, Executive will cooperate with the Company and its affiliates in the
defense of any claims or actions that may be made by or against the Company or
any of its affiliates that relate to Executive's prior areas of responsibility,
except if Executive's reasonable interests are adverse to the Company or
affiliates in such claim or action. If Executive is not an employee of the
Company or an affiliate at such time, the Company agrees to compensate Executive
for her time spent on such matters at the rate of $150 per hour, and in
addition, to pay or reimburse Executive for all of Executive's reasonable travel
and other direct expenses incurred, or to be reasonably incurred, to comply with
Executive's obligations under this Section 13, provided Executive provides
reasonable documentation of same.

      14. WITHHOLDINGS: RIGHT OF OFFSET. The Company may withhold and deduct
from any payments made or to be made pursuant to this Agreement (a) all federal,
state, local and other taxes as may be required pursuant to any law or
governmental regulation or ruling, (b) any deductions consented to in writing by
Executive, and (c) any other sums owed by Executive to the Company, any
affiliate, or any employee benefit plan or program of the Company or any
affiliate.

      15. SEVERABILITY. It is the desire of the parties hereto that this
Agreement be enforced to the maximum extent permitted by law, and should any
provision contained herein be held unenforceable by a court of competent
jurisdiction or arbitrator (pursuant to Section 17), the parties hereby agree
and consent that such provision shall be reformed to create a valid and

                                       13
<PAGE>

enforceable provision to the maximum extent permitted by law; provided, however,
if such provision cannot be reformed, it shall be deemed ineffective and deleted
herefrom without affecting any other provision of this Agreement.

      16. TITLE AND HEADINGS; CONSTRUCTION. Titles and headings to Sections
hereof are for the purpose of reference only and shall in no way limit, define
or otherwise affect the provisions hereof. Any and all Exhibits referred to in
this Agreement are, by such reference, incorporated herein and made a part
hereof for all purposes. The words "herein", "hereof", "hereunder" and other
compounds of the word "here" shall refer to the entire Agreement and not to any
particular provision hereof.

      17. ARBITRATION; INJUNCTIVE RELIEF; ATTORNEYS' FEES.

            (a) Subject to Section 17(b), any dispute, controversy or claim
      between Executive and the Company arising out of or relating to this
      Agreement, Executive's employment with Company, or the termination of
      either will be finally settled by arbitration in Houston, Texas before,
      and in accordance with the rules for the resolution of employment disputes
      then obtaining of, the American Arbitration Association. The arbitrator's
      award shall be final and binding on both parties.

            (b) Notwithstanding Section 17(a), an application for emergency or
      temporary injunctive relief by either party shall not be subject to
      arbitration under this Section 17; provided, however, that the remainder
      of any such dispute (beyond the application for emergency or temporary
      injunctive relief) shall be subject to arbitration under this Section 17.
      Executive acknowledges that Executive's violation of Sections 11 and/or 12
      of this Agreement will cause irreparable harm to the Company, Executive
      agrees not to contest that Executive's violation of Sections 11 and/or 12
      of this Agreement will cause irreparable harm to the Company and Executive
      agrees that the Company shall be entitled as a matter of right to specific
      performance of Executive's obligations under Sections 11 and 12 and an
      injunction, from any court of competent jurisdiction, restraining any
      violation or further violation of such agreements by Executive or others
      acting on her behalf, without any showing of irreparable harm and without
      any showing that the Company does not have an adequate remedy at law. The
      Company's right to injunctive relief shall be cumulative and in addition
      to any other remedies provided by law or equity.

            (c) Each side shall share equally the cost of the arbitrator and
      bear its own costs and attorneys' fees incurred in connection with any
      arbitration, unless a statutory claim authorizing the award of attorneys'
      fees is at issue, in which event the arbitrator may award a reasonable
      attorneys' fee in accordance with the jurisprudence of that statute.

            (d) Nothing in this Section 17 shall prohibit a party to this
      Agreement from (i) instituting litigation to enforce any arbitration award
      or (ii) joining another party to this Agreement in a litigation initiated
      by a person which is not a party to this Agreement.

                                       14
<PAGE>

      18. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS. THE EXCLUSIVE VENUE FOR THE RESOLUTION OF ANY DISPUTE
RELATING TO THIS AGREEMENT OR EXECUTIVE'S EMPLOYMENT (THAT IS NOT SUBJECT TO
ARBITRATION UNDER SECTION 17 FOR ANY REASON) SHALL BE IN THE STATE AND FEDERAL
COURTS LOCATED IN HARRIS COUNTY, TEXAS AND THE PARTIES HEREBY EXPRESSLY CONSENT
TO THE JURISDICTION OF THOSE COURTS.

      19. ENTIRE AGREEMENT AND AMENDMENT. This Agreement contains the entire
agreement of the parties with respect to Executive's employment and the other
matters covered herein (except to the extent that other agreements are
specifically referenced herein); moreover, this Agreement supersedes all prior
and contemporaneous agreements and understandings, oral or written, between the
parties hereto concerning the subject matter hereof and thereof. This Agreement
may be amended, waived or terminated only by a written instrument executed by
both parties hereto.

      20. SURVIVAL OF CERTAIN PROVISIONS. Wherever appropriate to the intention
of the parties hereto, the respective rights and obligations of said parties,
including, but not limited to, the rights and obligations set forth in Sections
6 through 18 hereof, shall survive any termination or expiration of this
Agreement for any reason.

      21. WAIVER OF BREACH. No waiver by either party hereto of a breach of any
provision of this Agreement by the other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party or any similar or dissimilar provision or condition at the same or any
subsequent time. The failure of either party hereto to take any action by reason
of any breach will not deprive such party of the right to take action at any
time while such breach continues.

      22. ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder shall be assignable or otherwise subject to hypothecation by Executive
(except by will or by operation of the laws of intestate succession) or by the
Company, except that the Company may assign this Agreement to any successor
(whether by merger, purchase or otherwise) to all or substantially all of the
equity, assets or businesses of the Company, if such successor expressly agrees
to assume the obligations of the Company hereunder.

      23. NOTICES. Notices provided for in this Agreement shall be in writing
and shall be deemed to have been duly received (a) when delivered in person or
sent by facsimile transmission, (b) on the first business day after such notice
is sent by air express overnight courier service, or (c) on the third business
day following deposit in the United States mail, registered or certified mail,
return receipt requested, postage prepaid and addressed, to the following
address, as applicable:

                                       15
<PAGE>

                        (1)   If to Company, addressed to:

                              Mariner Energy, Inc.
                              Attn:  Chief Executive Officer
                              2101 Citywest Blvd.
                              19th Floor, Bldg. 2
                              Houston, TX 77042

                        (2)   If to Executive, addressed to the address set
                              forth below Executive's name on the execution page
                              hereof;

or to such other address as either party may have furnished to the other party
in writing in accordance with this Section 23.

      24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
Each counterpart may consist of a copy hereof containing multiple signature
pages, each signed by one party, but together signed by both parties hereto.

      25. DEFINITIONS. The parties agree that as used in this Agreement the
following terms shall have the following meanings: an "affiliate" of a person
shall mean any person directly or indirectly controlling, controlled by, or
under common control with, such person; the terms "controlling, controlled by,
or under common control with" shall mean the possession, directly or indirectly,
of the power to direct or influence or cause the direction or influence of
management or policies (whether through ownership of securities or other
ownership interest or right, by contract or otherwise) of a person; the term
"person" shall mean a natural person, partnership (general or limited), limited
liability company, trust, estate, association, corporation, custodian, nominee,
or any other individual or entity in its own or any representative capacity, in
each case, whether domestic or foreign.

                             SIGNATURE PAGE FOLLOWS

                                       16
<PAGE>

      IN WITNESS WHEREOF, Executive and the Company have executed this Agreement
to be effective for all purposes as of the Effective Date.

                                   EXECUTIVE:

                                   Signature: /s/ Teresa Bushman
                                              ----------------------------------
                                                  TERESA BUSHMAN

                                   Date: February 7, 2005

                                                Address for Notices:

                                                     12215 SHELWICK DRIVE
                                                     HOUSTON, TX  77031

                                   MARINER ENERGY, INC.

                                   By: /s/ Scott D. Josey
                                       -----------------------------------
                                       Scott D. Josey
                                       Chief Executive Officer and
                                       President

                                   Date: February 7, 2005

                                       17
<PAGE>

                                    EXHIBIT A

                                      NONE

                                      A-1
<PAGE>

                                                                       EXHIBIT B

                          WAIVER AND RELEASE AGREEMENT

      This Waiver and Release Agreement (the "AGREEMENT") is between Mariner
Energy, Inc., a Delaware company ("COMPANY"), and TERESA BUSHMAN ("EXECUTIVE"),
as provided pursuant to that employment agreement between Executive and Company
dated February 7, 2005 (the "EMPLOYMENT AGREEMENT") and attached hereto as
EXHIBIT A.

      WHEREAS, Executive's employment with Company is being terminated; and

      WHEREAS, Executive will be paid certain severance benefits in exchange for
her release and waiver of her claims against the Company Releasee (as defined
below) pursuant to this Agreement;

      NOW, THEREFORE, the parties agree to the following.

      1. Complete Release and Other Consideration from Executive. In exchange
for the severance benefits provided under Section 2 of this Agreement, Executive
agrees as follows:

                  a. Complete Release. On behalf of Executive and Executive's
            heirs and assigns, Executive fully releases Company and its direct
            and indirect, past present and future, parents, subsidiaries,
            affiliates, divisions, predecessors, successors, and assigns, and,
            with respect to all such entities, their partners, members,
            shareholders, owners, officers, directors, attorneys, agents,
            representatives and employees (collectively, the "COMPANY
            RELEASEES"), from any and all claims, demands, damages, losses,
            expenses, liabilities and causes of action (including claims for
            attorneys' fees) (collectively, "CLAIMS"), known or unknown, that
            Executive, her heirs, executors, administrators, and assigns may
            have or may claim to have against any of the Company Releasees based
            upon facts occurring on or prior to the date Executive signs this
            Agreement, including but not limited to any claims arising out of
            Executive's employment relationship with and service as an employee,
            officer or director of Company, and the termination of such
            relationship or service, (the "RELEASE"); provided, however, that
            this Release shall not apply to Company's obligations under this
            Agreement. This Release includes, without limitation, any claims
            arising out of any contract (express or implied); any tort (whether
            based on negligent, grossly negligent, or intentional conduct); or
            any federal, state, or local law, including, without limitation, the
            Age Discrimination in Employment Act and the Employee Retirement
            Income Security Act ("ERISA"), other than benefits that Executive is
            entitled to under the terms of an ERISA plan. This Release does not
            include any claims under the Age Discrimination in Employment Act
            that may arise after this Agreement is executed.

                                      B-1
<PAGE>

        b. Confidentiality. Except as may be required by law or court order or
            as may be necessary in an action arising out of this Agreement,
            Executive agrees not to disclose the existence or terms of this
            Agreement to anyone other than Executive's immediate family,
            attorneys, tax advisors, and financial counselors, provided that
            Executive first informs them of this confidentiality clause and
            secures their agreement to be bound by it. Executive understands and
            agrees that a breach of this confidentiality provision by any of
            these authorized persons will be deemed a material breach of this
            Agreement by Executive.

        c. Executive agrees not to bring or join any lawsuit against any of the
            Company Releasees in any court (except as necessary to protect
            Executive's rights under this Agreement or with respect to
            Executive's entry into this Agreement) relating to Executive's
            employment, events occurring during Executive's employment or the
            termination of Executive's employment. Executive represents that, as
            of the effective date of this Agreement, Executive has not brought
            or joined any lawsuit or filed any charge or claim against any of
            the Company Releasees in any court or before any government agency.
            If Executive brings or joins any lawsuit against any of the Company
            Releasees in any court (except as necessary to protect Executive's
            rights under this Agreement or with respect to Executive's entry
            into this Agreement) relating to Executive's employment, events
            occurring during Executive's employment or the termination of
            Executive's employment, and Executive is the prevailing party in
            such lawsuit, Executive shall be obligated to return to the Company
            all amounts paid to Executive as benefits under this Agreement, to
            the extent permitted under applicable law and ordered by the court.
            Further, if any Company Releasee is the prevailing party in any
            lawsuit Executive brings against such Company Releasee relating to
            Executive's employment that has been waived in this Agreement, to
            the extent permitted by applicable law (such as if Executive's
            claims are found to be brought in bad faith), Executive agrees to
            pay all costs and expenses incurred by such person or entity,
            including reasonable attorneys' fees, in defending against such
            lawsuit.

      This Agreement is not intended to indicate that any Claims exist or that,
      if they do exist, they are meritorious. Rather, Executive is simply
      agreeing that, in return for the Company's payment provided by this
      Agreement, any and all potential Claims that Executive may have against
      the Company Releasees, regardless of whether they actually exist, are
      expressly settled, compromised and waived. By signing this Agreement,
      Executive and the Company Releasees are bound by it. Anyone who succeeds
      to Executive's rights and responsibilities, such as heirs or the executor
      of Executive's estate, is also bound by this Agreement. The waiver and
      release provisions of this Agreement do not apply to any rights or claims
      that may arise after its effective date. This Release also applies to any
      claims brought by any person or agency or class action under which
      Executive may have a right or benefit.

                                      B-2
<PAGE>

      2. Consideration from Company. In exchange for Executive's obligations
under this Agreement, the Company shall pay Executive those severance payments
and benefits described in Sections 7, 8 and 9, as applicable, of the Employment
Agreement, which are incorporated herein by reference and made a part of this
Agreement. Executive acknowledges that Executive is not otherwise entitled to
receive such severance payments and benefits, these severance payments and
benefits are conditioned on Executive's compliance with the terms of this
Agreement and the Employment Agreement, including without limitation Sections 11
and 12 thereof. Executive acknowledges and agrees that Company will withhold any
taxes required by applicable law from the severance payments and benefits.

      3. Right to Consult an Attorney; Period of Review. Executive is encouraged
to consult with an attorney before signing this Agreement. From the date this
Agreement is first presented to Executive, Executive will have 21 [45, if
applicable] days in which to review this Agreement. Executive may use as little
or much of this 21 [45]-day review period as Executive chooses.

      4. Entire Agreement; Amendment; Continuing Obligations. This Agreement and
the Employment Agreement together contain the entire agreement of the parties
with respect to the termination of Executive's employment and the other matters
covered herein and therein; moreover, this Agreement supersedes all prior and
contemporaneous agreements and understandings, oral or written, between the
parties hereto concerning the subject matter hereof. This Agreement may be
amended, waived or terminated only by a written instrument executed by both
parties hereto. Executive hereby reaffirms and agrees to continue to abide by
all of Executive's continuing obligations under Sections 11 through 18 of the
Employment Agreement.

      5. Revocation. Upon signing this Agreement, Executive will have 7 days to
revoke the Agreement. To properly revoke the Agreement, Company must receive
written notice of revocation from Executive by the close of business on the 7th
day after the date the Agreement is signed by Executive. Written notice must be
delivered pursuant to Section 23 of the Employment Agreement. Executive
understands that failure to revoke her acceptance of this Agreement within 7
days after the date she signs it will result in this Agreement being permanent
and irrevocable.

      6. Choice of Law. This Agreement will be governed in all respects by the
laws of the State of Texas, without regard to its choice of law principles. This
Agreement is subject to the arbitration provisions in Section 17 of the
Employment Agreement.

      7. Effectiveness of Agreement. This Agreement will be effective, and the
severance payments and benefits provided in Section 2 of this Agreement will be
made and provided, only if Executive executes this Agreement within 21 [45] days
of receiving it and only if Executive does not revoke this Agreement under
Section 5 above.

                                      B-3
<PAGE>

                                   EXECUTIVE

                                   Signature:
                                              ----------------------------------
                                                        TERESA BUSHMAN

                                   Date:
                                         ---------------------------------------

                                   MARINER ENERGY, INC.

                                   By:
                                       -----------------------------------------
                                                [Name]
                                                [Title]

                                   Date:
                                         ---------------------------------------

                                      B-4

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