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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into by and between INLAND
RESOURCES INC. (hereinafter referred to as "Employer") and William War
(hereinafter referred to as "Employee").
WHEREAS, Employer desires to continue the employment of Employee as its
Vice President - Refinery Operations and as President of Inland Refining, Inc.
and Employee desires to continue such employment; and
WHEREAS, Employer and Employee have previously entered into an
Employment Agreement dated September 8, 1998 (the "Original Employment
Agreement") as amended January 12, 1999, and Employer and Employee desire to
mutually terminate the Original and amended Employment Agreement in connection
with the execution of this Agreement; and
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. TERMINATION OF ORIGINAL AND AMENDED EMPLOYMENT AGREEMENT. Employer
and Employee hereby agree that the Original Employment Agreement as amended is
terminated effective the date hereof.
2. AGREEMENT TO GRANT OPTIONS. Employer hereby grants to Employee,
effective the date of execution of this Agreement, an option to purchase 250,000
shares of Common Stock exercisable at the closing sale price of the Common Stock
on the date of execution of this Agreement. The number of option shares granted
herein shall be increased or decreased to the same extent that the outstanding
shares of Common Stock of Employer are increased or decreased by any
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stock split occurring after the effective date of this Agreement. Such options
shall vest over a period of five years, as provided for herein. On each of the
first five anniversary dates of the effective date of this Agreement, twenty
percent (20%) of such options shall be vested. All options granted hereunder
will be exercisable for a period of five years after the last options are
vested, regardless whether Employer subsequently voluntarily leaves the
employment of Employer or is terminated with or without "Cause" (as hereinafter
defined). Options will vest on each such anniversary date if Employee continues
to be employed by Employer on such anniversary date. All non-vested options will
vest immediately upon a "Change of Control" (as hereinafter defined). Also, all
non- vested options will vest immediately if the Employee is terminated without
cause because it is determined his services are no longer required as a result
of a successful long term refinery solution for the Employer's Black Wax crude
(i.e. a processing agreement, a refinery joint venture, a long- term crude
purchase arrangement, etc.). Employer will concurrently with execution of this
Agreement prepare an Option Agreement incorporating these terms and such other
standard terms as have been contained in prior options or warrants granted to
Employer's Employees.
3. EMPLOYMENT. Employer hereby employs Employee to serve as Vice
President - Refinery Operations and as President of Inland Refining, Inc. and
otherwise at the direction of the Board of Directors.
4. 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
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acceptance or rejection all business opportunities located by or made available
to Employee.
5. COMPENSATION. Employee's compensation for services performed under
this Agreement shall be as follows:
Base Salary. Employer shall pay Employee a base salary ("Base Salary")
of One Hundred Seventy Five Thousand and No/100 Dollars ($175,000.00) per year,
commencing effective October 1, 1999. In addition, the Board of Directors of
Employer 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.
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 of
Directors shall, from time to time, determine.
Termination Payment. If Employee's employment is terminated by the
Company during the term of the Agreement without "Cause", (or if there is a
"Change of Control" resulting in termination), Employee shall be paid a
termination payment of Seventy Five Thousand and No/100 Dollars ($75,000.00)
payable immediately upon the date of termination. However, if Employee
voluntarily leaves the employment of Employer, Employee shall forfeit payment of
the termination payment.
Severance Payment. If Employee is still employed by the Company upon
the cancellation and expiration of this Agreement, the Employee will be granted
a severance payment
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of $75,000 to be paid upon Employees termination without Cause, but not with
Cause or upon voluntary termination.
6. 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:
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.
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.
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.
7. TERM. The term of this Agreement shall be for a term of one (1)
year, beginning from the effective date hereof and for month to month thereafter
unless terminated by either party on thirty (30) days' notice.
8. 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
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be reduced to one-half (1/2) of the Base Salary then in effect, as set forth in
Section 6(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 7 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 7(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 10 hereof.
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.
9. TERMINATION BY EMPLOYER. Employer shall have the right to terminate
Employee's employment as hereinafter provided.
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(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 under Sections 5(a)
(b) (c) or (d) 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 act of dishonesty
against Employer; (3) gross negligence by Employee in carrying
out his duties; (4) 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 immediately pay
the sum as set forth in Sec. 5(c).
10. CHANGE OF CONTROL. For purposes of this Agreement, a "Change of
Control" shall mean: (i) the issuance of shares of capital stock of Employer or
the granting of options or other derivative
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securities representing on a combined basis more than 50% of the outstanding
capital stock following such issuance and grant, or the issuance of shares of
capital stock by Employer or the granting of options or other derivative
securities to a person who, when added to shares acquired by such person in the
market or from other stockholders of Employer, would result in such person
owning more than 50% of the outstanding capital stock (assuming for this
purpose, exercise of such options or other derivative securities) of Employer;
or (ii) the sale or other disposition by Employer of substantially all of the
assets of Employer.
11. 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 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 11(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.
410 17th Street, Suite 700
Denver, Colorado 80202
If to Employer:
Inland Resources Inc.
410 17th Street, Suite 700
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
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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 on
November 15, 1999, but to be effective the 1st day of October 1999.
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EMPLOYER:
INLAND RESOURCES INC.
By: /s/ Bill I. Pennington
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Bill I. Pennington
Chief Executive Officer
EMPLOYEE:
/s/ William T. War
--------------------------------
William T. War
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