EXHIBIT 10.7
February 24, 1999
Xx. Xxxx X. Xxxxxxxx, Vice President
RAM Energy, Inc.
One Xxxxxx Place, Suite 130
0000 X. Xxxxxxxx
Xxxxxxxx Xxxx, XX 00000
RE: Employment and Severance Agreement
Dear Xxxx:
This letter agreement (this "Agreement"), when executed by you
in the time and manner hereinafter provided, will constitute an
employment and severance agreement between you and RAM Energy, Inc.
(the "Company"), superseding all existing employment, severance and
similar agreements between you and the Company; provided, however,
that the existing Employment and Severance Agreement between you
and the Company dated January 1, 1998 through December 31, 1998
shall remain in effect until execution of this agreement. The
terms of this Agreement are as follows:
Term. The term of this Agreement shall commence January 1, 1999, and
shall continue until December 31, 1999.
Title; Duties. Your job title will be "Senior Vice President and
Treasurer" of the Company. You will perform duties commensurate with your
position and as assigned to you by the President or Chairman of the
Company or their designee. During the term of this Agreement you
will devote your full time and attention during normal business
hours to the business of the Company and will not be employed by or
perform any professional work or services, including consulting,
for any other person, firm or entity.
3. Salary. Your base salary will be $12,083.33 per month,
payable twice monthly in equal installments, less applicable
withholding and other payroll taxes and deposits. Additionally,
you will receive life, disability and health insurance, expense
account and other benefits as are available to other non-director
officers of the Company, and three weeks paid vacation annually
during the term hereof.
4. Termination of Employment.
4.1 By the Company. Your employment may be terminated
by the Company at any time upon two weeks prior written notice
(except where termination is for gross neglect of your duties, breach
by you of the terms of this Agreement or willful misconduct, hereinafter
referred to as "Good Cause", in which event termination may be effective
immediately upon notice). Subject to the provisions in Section 4.3 hereof
regarding termination of employment following a "Change of Control"
(as hereinafter defined), in the event your employment is terminated by
the Company at any time (i) prior to June 30, 1999 (other than for Good
Cause), you will be entitled to receive as a severance payment (A) an
amount equal to your monthly base salary times the number of months
(pro rated for any partial month if the effective date of termination is
other than the end of a month) remaining until the expiration of the term
hereof, plus (B) an amount equal to your monthly base salary times the
number of years (pro rated for any partial year) you have been employed
by the Company, or (ii) after June 30, 1999 (other than for Good Cause),
you will be entitled to receive as a severance payment (A) an amount equal
to six (6) times your monthly base salary, plus (B) an amount equal to
your monthly base salary times the number of years (pro rated for any
partial year) you have been employed by the Company, all less applicable
withholding and other payroll taxes and deposits. For purposes of the
foregoing, the date of your initial employment with the Company shall be
conclusively determined to be June 1, 1990, such that each full year of
your employment with the Company shall end on May 31 of each subsequent
year. In addition to the payment described at (i) or (ii) above, whichever
is applicable, you also shall be entitled to receive payment for accrued
but unused vacation based on your monthly base salary. In the event your
employment is terminated by the Company at any time for Good Cause, you
shall not be entitled to receive any severance payment other than for
accrued but unused vacation. In the event the Company fails to make any
salary payment due under this Agreement within five (5) days after the due
date, and provided you are not in breach of the terms of this Agreement, you
may terminate your employment at any time thereafter (but prior to the time
the delinquent payment is made) by a written notice to the President or
Chairman of the Company, in which event your employment will be deemed to
have been terinated by the Company for purposes of this Section 4.1 as of
the date such notice is delivered.
4.2 By You. If during the term hereof you terminate
(other than a termination by you pursuant to the last sentence of
Section 4.1) or are deemed to have terminated (by becoming an
employee of or performing professional work for or consulting with
any other person, firm or entity) your employment with the Company,
then you shall not be entitled to receive any severance payment
(other than for accrued but unused vacation as provided in Section
4.1 above).
4.3 Termination Following a Change of Control. In the
event a Change of Control occurs during the term hereof, and
following such Change of Control (i) your employment is terminated by
the Company (other than for Good Cause) during the term hereof, or
(ii) you are not offered, prior to December 1, 1999, a renewal contract
for calendar year 2000 for employment by the Company (or its successor
by merger), in a comparable position in the same general location (i.e.,
the same city or metropolitan area in which you are employed by the
Company at the time such Change of Control occurs), at not less than the
same salary, and with comparable severances and other benefits as
provided under this Agreement (other than a Change of Control
provision such as this Section 4.3), then upon the effective date
of termination of your employment (in the case of clause (ii) next
above, December 31, 1999), you will be entitled to receive as a
severance payment the same amount calculated pursuant to Section
4.1 hereof, except that the amount calculated pursuant to clause
(i) (B) or (ii) (B) of Section 4.1, whichever is applicable, shall
be doubled, that is, in addition to the amount calculated pursuant
to clause (i) (A) or (ii) (A), you shall receive two (2) month's
base salary for each year of employment by the Company (pro rated
for a partial year). As used herein, the term "Change of Control"
shall mean any change in the composition of the Board of Directors
of the Company (the "Board") resulting in the current stockholder
directors (M. Xxxxx Xxxxxxx, Xxxxx X. Xxx and Xxxxxxx X. Xxxxxx,
XX) or their designees (in the event one of more of the current
directors chooses not to serve as a director and causes his or her
designee to be elected in lieu of such director), comprising less
than one-half (1/2) of the members of the Board. Notwithstanding
the foregoing, in no event shall you ever be entitled to receive as
a severance payment upon a Change of Control an amount that would
result in the imposition of the excise tax provided for in Section
4999 of the Internal Revenue Code of 1986, as amended (the "Excise
Tax"), and in the event the severance payment calculated pursuant
to this Section 4.3 would result in the imposition of the Excise
Tax, the amount so calculated shall be reduced to the amount that
is one dollar ($1) less than the amount that would result in the
imposition of the Excise Tax.
4.4 Death or Disability. In the event you die during
the term hereof, your employment will be deemed to have been
terminated by the Company (other than for cause) as of the date of
death. In the event you become permanently disabled during the
term hereof, you shall continue to receive your base salary for a
period of 12 months following the date of disability and shall be
deemed an employee of the Company during such 12-month period for
purposes of other employee benefit plans and programs, except to
the extent prohibited by the terms of any such plan.
5. Renewal. In the event the Company desires to
continue your employment with the Company beyond December 31, 1999,
the Company will so notify you during the month of November 1999, but
in no event later than November 30, 1999. In such event, the President
of the Company will discuss with you the Company's proposal for renewal
of this Agreement for an additional one-year term on substantially
the same terms and conditions as this Agreement at a salary not
less than the salary provided herein. In the event a renewal
agreement as hereinabove described is not offered by the Company,
then provided you have complied with the provisions of Section 2 of
this Agreement at all times prior thereto, your employment will be deemed
terminated by the Company effective December 31, 1999. In the event a
renewal agreement as hereinabove described is offered by the Company but
rejected by you, then provided you have complied with the provisions of
Section 2 of this Agreement at all times prior thereto, your employment
will be deemed terminated by you effective December 31, 1999; however,
and notwithstanding the provisions of Section 4.2 hereof, in such event
you will be entitled to receive as a severance payment upon such
termination an amount equal to three (3) times your monthly base salary,
plus an amount for accrued but unused vacation based on your monthly
salary, less applicable withholding and other payroll taxes and deposits.
6. Exclusive Obligation. You acknowledge and agree that the
Company has no obligation to continue your employment or to make
any severance payment of any nature upon termination of your
employment except as provided herein or in a subsequent written
agreement executed by you and the Company.
7. Indemnification. To the fullest extent allowed by the
Delaware General Corporation Law and the Company's bylaws with
respect to its officers and directors, the Company agrees to
indemnify you and to hold you harmless from and against any and all
losses, claims, damages, liabilities and legal and other expenses
(including costs of investigation) incurred by you and arising out
of the performance of your duties and responsibilities under this
Agreement, regardless of the time such claim or cause of action is
asserted.
Confidentiality. The terms of this Agreement shall be held by
you in strict confidence and shall not be released or disclosed by you
to any third party.
Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Oklahoma
applicable to contracts made and to be performed entirely therein.
Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors (including successors by merger or reorganization) and assigns;
provided, however, that your obligations hereunder are personal in
nature and may not be assigned, and that the obligations of the
Company hereunder may be assigned only with your prior written
consent.
If you are in agreement with the terms hereof, please so
indicate by executing a copy of this letter in the space provided
and returning it to us within five days of the date hereof.
Very truly yours,
RAM Energy, Inc.
By
Xxxxx X. Xxx, President
Chief Executive Officer
Agreed to and accepted
this 24th day of February, 1999
Xxxx X. Xxxxxxxx
