EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into by and between INLAND
RESOURCES INC. (hereinafter referred to as "Employer") and JOHN E. DYER
(hereinafter referred to as "Employee").
WHEREAS, Employer desires to employ Employee as its Vice President and
Chief Operating Officer and Employee desires to accept such employment.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employer and Employee agree as
follows:
1. EMPLOYMENT. Employer hereby employs Employee to serve as Vice
President and Chief Operating Officer of Employer.
2. DUTIES. During his employment, Employee shall devote all of his
working time, energies and skills to the management of Employer's business.
Employee agrees to serve Employer diligently and to the best of his ability.
Employee shall render services consistent with those of a person in his
position and shall perform all duties incident to such office and all such
further similar duties that may, from time to time, be assigned to him by
Employer. Employee's duties include finding further business opportunities
for Employer and Employee agrees to bring to Employer for acceptance or
rejection all business opportunities located by or made available to Employee.
3. COMPENSATION. Employee's compensation for services performed under
this Agreement shall be as follows:
(a) BASE SALARY. Employer shall pay Employee a base salary
("Base Salary") of One Hundred Twenty Thousand and No/100 Dollars
($120,000.00) per year. In addition, the Board of Directors of
Employer (the "Board of Directors") shall, in good faith, consider
granting increases in such salary based upon such factors as Employee's
performance and the growth and/or profitability of Employer, but it
shall have no obligation to grant any such increases in compensation.
Such Base Salary shall be payable in equal semi-monthly installments
on the fifteenth day and the last working day of the month, or at such
other times and in such installments as may be agreed upon between
Employer and Employee. All payments shall be subject to the deduction
of payroll taxes and similar assessments as required by law.
(b) BONUS. In addition to the Base Salary, Employee shall be
eligible to receive bonus compensation in such amounts and at such times
as the Board
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of Directors shall, from time to time, determine.
4. EXPENSES AND BENEFITS. Employee is authorized to incur reasonable
expenses in connection with the business of Employer, including expenses for
entertainment, travel and similar matters. Employer will reimburse Employee
for such expenses upon presentation by Employee of such accounts and records
as Employer shall, from time to time, require. Employer also agrees to
provide Employee with the following benefits:
(a) EMPLOYEE BENEFIT PLANS. Employee shall be entitled to
participate in employee benefit plans or programs of Employer, if
any, to the extent that his position, tenure, salary, age, health
and other qualifications make him eligible to participate, subject
to the rules and regulations applicable thereto. Such additional
benefits shall include, subject to the approval of the Board of
Directors, full medical, dental and disability income insurance.
(b) OTHER. Such items and benefits as Employer shall, from
time to time, consider necessary or appropriate to assist Employee
in the performance of his duties.
(c) VACATIONS. Employee shall be entitled (in addition to the
usual public holidays) to a paid vacation for a period in each
calendar year not exceeding three (3) weeks, to be taken at such
times as may be approved by Employer.
5. TERM. The term of this Agreement shall commence on the effective
date hereof and shall continue for two years; provided, however, that this
Agreement shall be deemed to have been renewed (and the original term hereof
to have been extended) daily for successive two-year terms beginning on the
date hereof such that there shall at all times be two years remaining in the
term of each employment; provided, further, however, that this Agreement
shall also be subject to termination at any time by either party by giving at
least one (1) year prior written notice, and shall terminate as provided for
in Section 7 or upon the death of Employee.
6. DISABILITY. In the event that Employee becomes Permanently Disabled
(as hereafter defined) during the term of this Agreement and while engaged in
the scope of his employment by Employer, Employee shall continue in the
employ of Employer but his compensation hereunder shall be reduced to one
half (1/2) of the Base Salary then in effect, as set forth in Section 3(a)
hereof, commencing upon the determination of Employee's Permanent Disability
and continuing thereafter until the first to occur of (a) twelve (12) months
or (b) the death of Employee or (c) the expiration of the term of this
Agreement; and during such period of time, Employee shall not be entitled to
payment of expenses or benefits specified in Section 4 hereof (except for
reimbursement of expenses incurred by Employee prior to becoming Permanently
Disabled), except that Employer shall continue to provide Employee with the
insurance benefits specified in Section 4(a) hereof. In addition, any
compensation payable to Employee by Employer shall be reduced by any amount
which Employee is eligible to receive from workers compensation, social
security or disability insurance provided by Employer. If Employee becomes
Permanently Disabled while not engaged in the scope of his employment by
Employer, such disability may be cause for termination for "Cause" under
Section 7 hereof.
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(a) DEFINITION OF DISABILITY. For purposes of this Agreement,
the terms "Permanent Disability" or "Permanently Disabled" shall mean
three (3) months of substantially continuous disability. Disability
shall be deemed "substantially continuous" if, as a practical matter,
Employee, by reason of his mental or physical health, is unable to
sustain reasonably long periods of substantial performance of his
duties. Frequent long illnesses, though different from the preceding
illness and though separated by relatively short periods of
performance, shall be deemed to be "substantially continuous".
Disability shall be determined in good faith by the Board of Directors
whose decision shall be final and binding upon Employee. Employee
hereby consents to medical examinations by such physicians and medical
consultants as Employer shall, from time to time, require.
7. TERMINATION BY EMPLOYER. Employer shall have the right to terminate
Employee's employment as hereinafter provided.
(a) TERMINATION BY EMPLOYER FOR CAUSE. The Board of Directors shall
have the right to terminate Employee's employment under this Agreement for
Cause, in which event no compensation shall be paid or other benefits
furnished to Employee after termination for Cause. Termination for Cause
shall be effective immediately upon notice sent or given to Employee.
(i) DEFINITION OF CAUSE. For purposes of this Agreement,
the term "Cause" shall mean and be strictly limited to: (1)
conviction of a crime constituting a felony under state or
federal law; (2) determination by the Board of Directors that
Employee has committed any material act of dishonesty against
Employer; (3) gross negligence by Employee in carrying out his
duties; (4) material breach of this Agreement by Employee; (5)
gross misconduct by Employee, such as intoxication on the job,
use of drugs on the job for non-medical purposes or other
misconduct which has a substantial adverse effect on the business
of Employer; or (6) Employee becoming Permanently Disabled while
not engaged in the scope of his employment by Employer.
(b) TERMINATION BY EMPLOYER WITHOUT CAUSE. The Board of Directors
shall have the right to terminate Employee's employment under this
Agreement without Cause at any time, by giving written notice of
termination to Employee. In such event, Employer will continue to pay
Employee the full Base Salary for twelve (12) months together with a
prorated monthly bonus in an amount equal to the most recent annual bonus,
if any, paid to Employee divided by twelve (12).
8. NON-COMPETITION AND CONFIDENTIALITY.
(a) NON-COMPETITION. Employee recognizes and understands that in
performing the responsibilities of his employment, he will occupy a
position of fiduciary trust and confidence, pursuant to which he will
develop and acquire
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experience and knowledge with respect to Employer's business. It is the
expressed intent and agreement of Employee and Employer that such knowledge
and experience shall be used exclusively in the furtherance of the
interests of Employer and not in any manner which would be detrimental to
Employer's interests. Employee further understands and agrees that Employer
conducts its business within a specialized market segment in its geographic
region, and that it would be detrimental to the interests of Employer if
Employee used the knowledge and experience which he currently possesses or
which he acquires pursuant to his employment hereunder for the purpose of
directly or indirectly competing with Employer, or for the purpose of
aiding other persons or entities in so competing with Employer, anywhere in
such region. Employee therefore agrees that so long as he is employed by
Employer, unless Employee first secures the written consent of Employer,
Employee will not directly or indirectly invest, engage or participate in
or become employed by any entity in direct or indirect competition with
Employer's business. Employee further agrees upon termination of Employee's
employment either (i) by Employer with or without cause or (ii) by
Employee, unless Employee first secures the written consent of Employer,
Employee will not for a period of one year after such termination directly
or indirectly invest, engage or participate in or become employed by any
entity in direct or indirect competition with Employer in any mine or oil
or gas property located anywhere within a 100 mile radius of any mine or
oil or gas property owned or operated (wholly or partially) by Employer at
the time of termination of Employee's employment hereunder. This
non-competition provision is not to be construed to prohibit Employee from
being employed in the mining or oil or gas industry, but rather to permit
him to be so employed so long as such employment does not involve
Employee's direct or indirect participation in a property within such 100
mile radius. In the event that the provisions of this Section 8 should
ever be deemed to exceed the time or geographic limitations permitted by
applicable laws, then such provisions shall be reformed to the maximum
time or geographic limitations permitted by applicable laws.
(b) REMEDIES. Employee acknowledges that the restrictions contained
in Section 8(a), in view of the nature of the business in which Employer
is engaged, are reasonable and necessary to protect the legitimate
interests of Employer. Employee understands that the remedies at law for
his violations of any of the covenants or provisions of Section 8(a) will
be inadequate, that such violation will cause irreparable injury within a
short period of time, and that Employer shall be entitled to preliminary
injunctive relief and other injunctive relief against such violation.
Such injunctive relief shall be in addition to, and in no way in limitation
of, any and all other remedies Employer shall have in law and equity for
the enforcement of those covenants and provisions.
9. GENERAL PROVISIONS.
(a) NOTICES. Any notices to be given hereunder by either party to
the other may be effected by personal delivery, in writing or by mail,
registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be
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addressed to the parties at the addresses set forth below, but each party
may change his or its address by written notice in accordance with this
Section 9(a). Notices delivered personally shall be deemed communicated
as of the actual receipt; mailed notices shall be deemed communicated as
of three (3) days after mailing.
If to Employee:
Inland Resources Inc.
475 17th Street, Suite 1500
Denver, Colorado 80202
If to Employer:
Inland Resources Inc.
475 17th Street, Suite 1500
Denver, Colorado 80202
(b) PARTIAL INVALIDITY. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remaining provisions shall, nevertheless, continue in full force
without being impaired or invalidated in any way.
(c) LAW GOVERNING AGREEMENT. This Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado.
(d) ATTORNEYS' FEES AND COSTS. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which he or it
may be entitled.
(e) ASSIGNMENT. This Agreement shall inure to the benefit of and
bind the parties hereto and their respective legal representatives,
successors and assigns.
(f) ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the employment of Employee by Employer and contain all of the
covenants and agreements between the parties with respect to such
employment. Each party to this Agreement acknowledges that no
representations, inducements, or agreements, oral or otherwise, have been
made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and no other agreement, statement or promise not contained
in this Agreement shall be valid or binding. Any modification of this
Agreement will be effected only if it is in writing signed by the party to
be charged.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective the 1st day of June, 1996.
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EMPLOYER:
INLAND RESOURCES INC.
By: /s/ Kyle R. Miller
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Kyle R. Miller, President
and Chief Executive Officer
EMPLOYEE:
/s/ John E. Dyer
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John E. Dyer
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