Document:

THIRD AMENDMENT TO

EMPLOYMENT AGREEMENT  

 

This Third Amendment to Employment Agreement (this “Amendment”) is made and entered into this 30th day of December, 2008, by and between RAM ENERGY RESOURCES, INC., a Delaware corporation (the “Company”), and LARRY E. LEE, an individual (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to that certain Employment Agreement dated May 8, 2006 as amended by that First Amendment to Employment Agreement dated October 18, 2006, and by that certain Second Amendment to Employment Agreement dated February 25, 2008 (the “Agreement”); and

 

WHEREAS, the Board of Directors of the Company and the Executive have agreed that the Agreement should be amended in a manner set out in this Amendment; and

 

WHEREAS, the Internal Revenue Code of 1986 (the “Code”) has been amended to add a new IRC Section 409A which has placed additional requirements on various types of agreements including “employment agreements” such as the Agreement; and

 

WHEREAS, the Company desires that the Agreement be in compliance with IRC Section 409A, and Agreement is to be amended accordingly; and

 

WHEREAS, capitalized terms used but not defined herein have the meanings ascribed to such terms in the Agreement.

 

NOW, THEREFORE, it is hereby agreed that the Agreement should be and is hereby amended as follows:

 

1.     Section 3(c) of the Agreement is hereby deleted in its entirety and the following Section 3(c) substituted therefor: 

 

(c)       Good Reason.  The Executive’s employment may be terminated by the Executive for Good Reason.  For purposes of this Agreement, “Good Reason” means:

 

 (i)         the assignment to the Executive of any duties materially inconsistent in any respect with the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 2(a) of this Agreement, or any other action by the Company which results in a diminution in such position, compensation, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by the Executive;

 

 

 (ii)        any material failure by the Company to comply with any of the provisions of Section 2(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by the Executive;

 

 (iii)      the Company’s requiring the Executive to be based at any office or location other than that described in Section 2(a)(i)(B) which is more than fifty (50) miles from the Executive’s principal office prior to such relocation hereof, except for periodic travel reasonably required in the performance of the Executive’s responsibilities;

 

 (iv)       any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or

 

 (v)        any failure by the Company to comply with and satisfy Section 10(c) of this Agreement.

 

For purposes of this Section 3(c), any good faith determination of “Good Reason” made by the Executive shall be conclusive unless such determination is rejected by vote of a majority of the Board (excluding Executive if Executive is then a member of the Board), in which event Executive may refer the determination of “Good Reason” to binding arbitration by and between the Company and the Executive conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) by a single arbitrator appointed by the AAA.  The decision of the arbitrator in such matter shall be final, unappealable and binding upon the Company and the Executive.”

 

2.         Section 3 is hereby amended by adding a new Section (d) to the Agreement, to read as follows:

 

“(d)     Termination by the Executive; Good Reason.  The Executive may terminate his employment with the Company at any time whether with or without Good Reason. If the Executive believes Good Reason exists for terminating his employment, then he shall give the Company written notice of the acts or omissions constituting Good Reason within thirty (30) days after learning of such acts or omissions constituting Good Reason (the “Good Reason Notice”).  No termination of employment for Good Reason shall be effective unless (i) within thirty (30) days after receiving the Good Reason Notice, the Company fails to either cure such acts or omissions or notify the Executive of the intended method of cure, and (ii) the Executive delivers a Notice of Termination to the
Company and subsequently resigns within thirty (30) days after the Company’s deadline in Section 3(d)(i) expires.  Notwithstanding the previous sentence and at 

 

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the Company’s request, the Executive shall provide services consistent with his then-current authority, duties, and responsibilities for up to ninety (90) days after having provided the Good Reason Notice to the Company.”

 

3.         Existing Section 3(d) of the Agreement is hereby relettered as (e) in lieu of (d), and there is hereby added to such paragraph the following sentence:

 

“In the event of a termination by the Executive for Good Reason, a Notice of Termination shall be effective only if given within the time limit established by Section 3(d).”

 

	
             
 	
            4.
 	
            Section 4 is hereby amended by adding a new Section 4(e) to read as follows:
 

 

“(e)     Application of Section 409A of the Code. Notwithstanding the above paragraphs of this Section 4, if the Company determines that (i) the Executive is a “specified employee” within the meaning of Section 409A of the Code (“Section 409A”) as of the date of his “separation from service” as defined by Section 409A (“Separation from Service”), and (ii) any amount of any payment to be made under this Section 4 is subject to Section 409A, then such amount shall not be paid to the Executive until six (6) months after the date of his Separation from Service (or, if earlier, the date of his death).  In such case, the portion of the payment so delayed shall be paid in a single lump sum in cash on the first (1st) day of the seventh (7th) month following the Executive’s Separation from Service (or, if earlier, upon his death).”

 

	
             
 	
            5.
 	
            In all other respects, the Agreement remains unchanged and in full force and effect.
 

 

EXECUTED this 30th day of December, 2008. 

 

“COMPANY”

 

RAM ENERGY RESOURCES, INC., a Delaware corporation

 

By /s/ G. Les Austin______________________ 

	
             
 	
            Senior Vice President
 

 

“EXECUTIVE”

 

/s/ Larry E. Lee__________________________  

Larry E. Lee

 

 

3FIRST AMENDMENT TO

EMPLOYMENT LETTER AGREEMENT  

 

This First Amendment to Employment Letter Agreement (this “Amendment”) is made and entered into this 30th day of December, 2008, by and between RAM ENERGY RESOURCES, INC., a Delaware corporation (the “Company”), and G. LES AUSTIN, an individual (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to that certain letter agreement dated March 13, 2008 (accepted March 14, 2008), pursuant to which the Executive accepted employment with the Company on the terms set out therein (the “Agreement”); and

 

WHEREAS, the Company and the Executive have agreed that the Agreement should be amended in certain respects as hereinafter provided; and

 

WHEREAS, capitalized terms used but not defined herein have the meanings ascribed to such terms in the Agreement.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.     Section 8 of the Agreement is hereby deleted in its entirety and the following Section 8 (and subsections) substituted therefor: 

 

“8.       Severance and Change of Control Protection.  If, during the first three (3) years of your employment with the Company (i) your employment with the Company is terminated (in a manner that constitutes a “separation from service” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder) by the Company  other than for Cause (as hereinafter defined), or (ii) a Change of Control (as hereinafter defined) occurs, and upon such Change of Control or within six (6) months thereafter your employment with the Company is terminated (in a manner that constitutes a “separation from service” under Section 409A of the Code and the Treasury Regulations promulgated thereunder) either (A) by the Company other
than for Cause, or (B) by you for Good Reason (as hereinafter defined), then in either such event, the Company shall pay to you as a severance benefit, within thirty (30) days after the date of termination, an amount equal to the sum of (y) your then current annual base salary, plus (z) an amount equal to the average of your three (3) then most recent annual cash bonuses.  In the event a Change of Control occurs before your receive your first annual cash bonus, such amount shall be deemed to be $125,000.  

 

8.1.      Change of Control.  As used herein, the term “Change of Control” means any change in the composition of the board of directors of the Company (the “Board”) such that the Incumbent Directors comprise less than one-half of the membership of the Board.  For this purpose, the term “Incumbent Directors” means those persons currently serving as directors of the Company, any person 

 

selected by the current directors to replace a director who dies, resigns or is removed as a director (and any such person shall thereafter be deemed to be a current director), or any person nominated by the current directors, or whose nomination is supported by the current directors, and who thereafter is elected by the stockholders as a director (and any such person shall thereafter be deemed to be a current director).  

 

8.2       Cause.  As used herein, the term “Cause” means (i) conviction of a felony, (ii) an act or acts of dishonesty intended to result in personal enrichment at the expense of the Company, or (iii) failure to follow a reasonable and lawful order from the Chief Executive Officer of the Company or the Board, within the reasonable scope of your duties and responsibilities, which failure is not cured within ten (10) days after notice.

 

8.3       Good Reason.  As used herein, the term “Good Reason” means the termination by you of your employment with the Company within the period ending six (6) months following a Change of Control for any of the following events, unless you have consented in writing to such event: (i) a material diminution of your base annual salary; (ii) the assignment to you of any duties materially inconsistent with your position as Chief Financial Officer of the Company (including status, offices, titles, and reporting requirements), or any material diminution of your authority, duties, or responsibilities, other than an isolated, insubstantial, or inadvertent action not taken in bad faith and which the Company remedies promptly after receipt of notice from you; or (iii) any required
relocation of your principal office to a location more than fifty (50) miles from Tulsa, Oklahoma.  If you believe Good Reason exists for terminating your employment, then you shall give the Company written notice of the acts or omissions constituting Good Reason within thirty (30) days after learning of such acts or omissions constituting Good Reason (the “Good Reason Notice”).  No termination of employment for Good Reason shall be effective unless (y) within thirty (30) days after receiving the Good Reason Notice, the Company fails to either cure such acts or omissions or notify you of the intended method of cure, and (z) you deliver a notice of termination to the Company and subsequently resign within thirty (30) days after the Company’s 30-day deadline described at (y) above expires.”

 

	
             
 	
            2.
 	
            A new Section 10 is hereby added to the Agreement, as follows:
 

 

 “10      CIC Separation Benefit Plan.  In the event the Board or the Compensation Committee of the Board (the “Committee”) hereafter shall approve and adopt a change of control separation benefit plan (the “Plan”) which is applicable to you and which provides for a change of control separation benefit payable to you under substantially the same circumstances as a change of control severance benefit would be payable to you under this Agreement, then effective as of the date of adoption of the Plan, the provisions of Section 8 of this Agreement (and its subsections) that provide for a severance benefit following a change of 

 

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control shall be deleted in their entirety; provided, however, that if (i) events subsequently occur that would entitle you to payment of a change of control separation benefit under this Agreement if the applicable provisions of Section 8 and its subsections were still in effect (a “Triggering Event”), and (ii) the change of control separation benefits, if any, payable to you under the Plan by reason of the Triggering Event are not, in the aggregate, greater than or equal in value to the change of control separation benefits that would have been payable to you under this Agreement had the applicable provisions of Section 8 and its subsections not been deleted, then upon the occurrence of a Triggering Event, you shall receive, in addition to the change in control separation benefits, if any, payable under the Plan, the prompt payment of an additional amount in cash equal to the
difference in aggregate value of the separation benefits that you would have received under the applicable provisions of Section 8 (and its subsections) of this Agreement and the change in control separation benefits, if any, to which you are entitled under the Plan.”  

 

	
             
 	
            3.
 	
            A new Section 11 is hereby added to the Agreement, as follows:
 

 

 “11.     Application of Section 409A of the Code.  Notwithstanding the provisions of Sections 8 and 10 of this Agreement, if the Company determines that (i) you are a “specified employee” within the meaning of Section 409A of the Code (“Section 409A”) as of the date of your separation from service entitling you to a separation benefit hereunder, and (ii) the amount of any payment to be made to you under Section 8 or 10 is subject to Section 409A, then such amount shall not be paid to you until six (6) months after the date of your separation from service (or, if earlier, the date of your death).  In such case, the payment so delayed shall be paid in a single lump sum in cash on the first (1st) day of the seventh (7th) month following your separation from service (or, if
earlier, upon your death).”

 

	
             
 	
            4.
 	
            In all other respects, the Agreement remains unchanged and in full force and effect.
 

 

EXECUTED this 30th day of December, 2008. 

 

“COMPANY”

 

RAM ENERGY RESOURCES, INC., a Delaware corporation

 

By /s/ Larry E. Lee_______________________ 

	
             
 	
            President
 

 

“EXECUTIVE”

 

/s/ G. Les Austin_________________________  

G. Les Austin

 

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