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Sample Business Contracts

Employment Agreement - Warren Resources Inc. and Gregory S. Johnson

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                              EMPLOYMENT AGREEMENT


     EMPLOYMENT AGREEMENT (this "Agreement"), dated as of September 14, 2000, by
and between Warren Resources,  Inc., a New York corporation (the "Company"), and
Gregory S. Johnson (the "Employee").

                              W I T N E S S E T H:

     WHEREAS,  the  Company  desires to employ the  Employee  upon the terms and
conditions set forth in this Agreement; and

     WHEREAS,  the Employee  desires to accept an offer of  employment  with the
Company upon the terms and conditions set forth herein;

     NOW,  THEREFORE,  in  consideration  of the  premises  and  the  respective
covenants and  agreements of the parties herein  contained,  and intending to be
legally bound hereby, the parties hereto agree as follows:

     1.  Employment.  The Company hereby agrees to employ the Employee,  and the
Employee  hereby  agrees to serve  the  Company,  on the  terms  and  conditions
hereinafter set forth in this Agreement.

     2. Term. This Agreement,  and the employment of the Employee by the Company
hereunder, will commence on the date hereof (the "Effective Date") and terminate
on August 31, 2003 (the "Initial Term"),  subject to earlier  termination as set
forth herein (the  "Employment  Period").  As used herein,  the term "Employment
Year" shall mean each consecutive twelve (12) month period during the Employment
Period commencing on the Effective Date, or the yearly anniversary  thereof,  as
the case may be.  Effective on the third  anniversary of the Effective Date (and
each anniversary of such date thereafter), the term of this Agreement as then in
effect  shall be  automatically  extended  for an  additional  one (1) year term
unless,  at least  three (3)  months  prior to such  date,  the  Company  or the
Employee shall give written notice to the other party that it or he, as the case
may be, in its or his sole  discretion,  does not wish to so extend  the term of
this Agreement.

     3. Position and Duties. Subject to the provisions of this Section 3, during
the Employment  Period, the Employee shall serve as the Senior Vice President --
Oil and Gas Operations of the Company, and as part of his duties hereunder shall
also serve as Vice President of Petroleum Development  Corporation  ("PEDCO"), a
New Mexico  corporation which is a wholly-owned  subsidiary of the Company,  and
shall faithfully  perform the duties and  responsibilities  normally  associated
with such  positions,  subject to the  oversight  and  direction of the Board of
Directors,  the Chief  Executive  Officer,  or  President  of the  Company.  The
Employee agrees that from time to time during the Employment Period, the Company
may,  in its  reasonable  discretion,  modify,  change or amend  the  Employee's
position and employment duties and responsibilities hereunder.


<PAGE>

     4. Place of Employment. Generally, the Employee will fulfill all duties and
responsibilities  to the  Company  as set  forth  herein  from the then  current
principal place of business of the Company's subsidiary PEDCO, currently located
at 4113 Eubank, NE, Albuquerque, New Mexico.  Notwithstanding the foregoing, the
Employee  agrees to travel as is otherwise  reasonably  necessary to fulfill his
duties and responsibilities as set forth in this Agreement.

     5. Best Efforts.  The Employee's  employment with the Company shall be full
time and the  Employee  shall  devote his best  efforts and full  business  time
exclusively to the performance of his duties and  responsibilities  as set forth
in  this  Agreement,  which  duties  and  responsibilities  shall  be  performed
competently, carefully and faithfully. The Employee shall not, while an employee
of the Company and without the prior written  consent of the Company,  engage in
any other gainful  occupation or activity which  conflicts with or impinges upon
the full  and  faithful  performance  of the  Employee's  duties,  or  otherwise
violates  any  other  term or  provision  of  this  Agreement.  It is  expressly
understood and agreed,  however, that the provisions of this Section 5 shall not
be  construed  to prevent the  Employee  from  investing  or trading for his own
account  or  pursuing  charitable  or  civic  activities;  provided,  that  such
activities  do not  impair the  performance  by the  Employee  of his duties and
responsibilities   hereunder,   or  otherwise  violate  any  provision  of  this
Agreement.

     6. The Employee's Compensation.

     (a) Salary.  During the  Employment  Period,  the Company  shall pay to the
Employee an annual base salary of $150,000.00 (as adjusted pursuant to the terms
hereof,  the "Base  Compensation").  The Base  Compensation  will be paid to the
Employee  in  accordance  with the normal  payroll  practices  of the Company in
effect from time to time, less all required withholdings for benefits,  federal,
State of New Mexico and local taxes, if any. The amount of the Base Compensation
may, in the Company's discretion, be increased by the Company on an annual basis
during the Employment Period.  All increases to the Base  Compensation,  if any,
shall be  based on the  condition  of the  Company's  business  and  results  of
operations and the Company's evaluation of the Employee's individual performance
for the relevant period. Any increases made to the Base Compensation shall be in
the discretion of the Company.

     (b) Bonus  Compensation.  In addition to the Base Compensation to which the
Employee is entitled  under Section 6(a),  the Employee  shall be eligible to be
awarded bonus  compensation  in accordance  with past business  practices of the
Company (the "Bonus  Compensation")  with respect to each fiscal year or portion
thereof during which the Employee was employed by the Company hereunder equal to
up to and including 100% of the  Employee's  Base  Compensation.  The amount and
time for  payment  of the  Bonus  Compensation  for any year,  if any,  shall be
determined by the Board of Directors in its discretion.

     (c) Options.  Employee  shall be entitled to  participate  in the Company's
Equity Incentive Plan (the "Equity Incentive Plan"), and will be awarded 400,000
options  thereunder.  The grant of such option shall be documented with a formal
award  letter  from the  Company  to the  Employee  setting  forth the terms and
conditions of Employee's options.

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<PAGE>

     7. The  Employee's  Benefits.  As an employee of the Company,  the Employee
shall be  entitled  to  receive  and enjoy the  following  benefits  during  the
Employment Period:

     (a)  Participation in Company Benefit Plans. The Employee shall be entitled
to  participate  in  and to  receive  benefits  generally  available  to  senior
executives under those certain employee benefit plans and arrangements which may
be offered  by the  Company  from time to time  during  the  Employment  Period,
subject to and on a basis  consistent  with the terms,  conditions  and  overall
administration of such plans and arrangements by the Company.  The Company shall
provide  full  medical  and  dental   insurance   coverage  for  the   Employee.
Notwithstanding the provisions of this Section 7(a), nothing contained herein is
intended, or shall be construed, to require the Company to institute any benefit
plan or arrangement. In addition, nothing contained herein shall limit the right
of the Company to modify,  suspend or  discontinue  any and all benefit plans or
arrangements.

     (b)  Vacations.  The  Employee  shall be entitled to four (4) weeks of paid
vacation per  Employment  Year,  provided  that any vacations are to be taken at
times  mutually  agreeable to the Company and the  Employee.  In addition to the
foregoing,  the Employee shall be entitled to receive all paid holidays given by
the Company to its employees generally. If Employee has not used his accrued but
unused  vacation  days during an Employment  Year,  such days may not be carried
over to another  and shall be deemed  waived by the  Employee.  Any  accrued but
unused  vacation  days in an  Employment  Year  shall be  reimbursed  in cash to
Employee upon a termination of his employment Without Cause hereunder.

     (c) Business Expense Reimbursement. The Company shall promptly reimburse or
pay the Employee for all  reasonable  and  necessary  business  expenses paid or
incurred  by  the  Employee  in  performing  his  duties  and   responsibilities
hereunder; provided, that, the Employee shall have (i) submitted such reasonable
documentation  as may be  requested  by  the  Company  in  accordance  with  the
reimbursement  policies  of the  Company  in  effect  from time to time and (ii)
obtained the prior approval of the Company for all charges in excess of $5,000.

     8.  Termination of Employment.  The Employee's  employment with the Company
may be terminated as follows:

     (a)  With  Cause.  The  Employee's  employment  with  the  Company  may  be
terminated  by the  Company at any time for  "Cause." As used  herein,  the term
"Cause"  shall  refer to the  following:  (i) theft,  fraud,  dishonesty,  gross
negligence  or  willful  malfeasance  by the  Employee  in  connection  with the
performance  of his duties  hereunder  (collectively,  "Theft  Events");  (ii) a
material  breach or  failure  to  fulfill  and  perform  the  Employee's  duties
hereunder,  which breach or failure is not cured to the reasonable  satisfaction
of the Company within thirty (30) days after written demand from the Company (if

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<PAGE>

such breach is at all curable during such time in the  reasonable  determination
of the Company; failing such determination, "Cause" shall have occurred upon the
occurrence of such breach or failure);  (iii)  conviction of a felony or a crime
involving moral turpitude;  (iv) habitual neglect of duties or misconduct in the
performance of the Employee's duties and responsibilities hereunder following an
initial  notice of warning  from the  Company  with  respect  thereto;  or (v) a
repeated  or  ongoing  failure  to comply  with the  reasonable  directions  and
instructions  of management of the Company in connection with the performance of
the Employee's duties and responsibilities hereunder following an initial notice
of warning from the Company with respect  thereto.  Upon  termination for Cause,
all rights of the Employee under this Agreement shall immediately  terminate and
the Company shall have no further obligations, subject to Section 8(e)(i) below.
A termination of the Employee's employment with the Company by the Employee upon
his  voluntary  resignation  or  voluntary  retirement  shall  be  treated  as a
termination for Cause hereunder. In connection therewith, the Employee covenants
and agrees not to voluntarily resign or voluntarily retire without providing the
Company with ninety (90) days' prior  written  notice.  Upon a  termination  for
Cause,  Employee shall receive in full satisfaction of all amounts due to him an
amount  equal to the  greater  of (i) 6 months  Base  Compensation,  or (ii) the
remainder  of Base  Compensation  due  under his  current  Employment  Year.  In
addition,  Employee  shall receive any accrued but unpaid  vacation time for the
current  Employment Year and Bonus Compensation equal to the amount paid for the
previous  Employment  Year,  prorated  for the  number of days of service in the
current Employment Year. Notwithstanding any of the foregoing, in the event that
the Company has  terminated  Employee's  employment on account of a Theft Event,
the Company  shall be entitled to  withhold  from any amounts  otherwise  due to
Employee under this Subsection 8(a) the amount of monetary  damages  incurred by
the Company from such Theft Event which shall be  quantified  and  determined in
writing  by the  Company  within  90 days  after  the date of  termination.  The
Employee agrees that his eligibility to receive any and all amounts described in
this  Section  8(a)  shall be  subject  to and  contingent  upon the  Employee's
execution of a full and complete general release in favor of the Company and its
affiliated  persons  and  entities,  satisfactory  to the  Company  in its  sole
discretion.

     (b)  Without  Cause.  The  Employee's  employment  with the  Company may be
terminated  by the Company at any time  without  Cause,  but in the event of any
such  termination  pursuant  to this  Section  8(b),  the  Company  will pay, in
addition to any other amounts due  hereunder,  the Employee  severance pay in an
amount  equal to the greater of (i) the balance of all of  Employee's  remaining
and unpaid Base  Compensation  due for the  remainder of the then  existing term
hereunder,  or (ii) Employee's annual Base Compensation,  payable upon execution
and delivery of the release described below, less all required  withholdings and
in accordance with then current payroll  practices of the Company and applicable
law or  regulation.  In addition,  Employee shall receive any accrued but unpaid
vacation time for the current  Employment Year and Bonus  Compensation  equal to
the amount paid for the  previous  Employment  Year,  prorated for the number of
days of service in the current  Employment  Year.  The Employee  agrees that his
eligibility to receive any and all amounts  described in this Section 8(b) shall
be  subject  to and  contingent  upon  the  Employee's  execution  of a full and
complete general release in favor of the Company and its affiliated  persons and
entities, satisfactory to the Company in its sole discretion.

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<PAGE>

     (c)  Termination  for  Death  or  Disability.   The  Employee's  employment
hereunder shall terminate  immediately  upon the Employee's death or Disability.
For purposes of the preceding  sentence,  the term  "Disability"  shall mean the
Employee's inability,  by reason of physical or mental incapacity (determined by
a licensed physician reasonably  acceptable to the Employee and the Company), to
perform  the  essential  functions  of his job,  with or  without  a  reasonable
accommodation  by the Company,  for an aggregate of one hundred and twenty (120)
days during any twelve (12) month period,  provided further that during any such
continuous period,  the Employee's Base Compensation  payable under Section 6(a)
shall be reduced by the amount,  if any, of payments to the  Employee  under any
short-term or long-term  disability insurance policy, plan or program maintained
by the Company.  During any period when the Employee  implicitly  or  explicitly
purports to be unable to perform his duties  hereunder  by reason of physical or
mental  illness,  incapacity or  disability,  the  Employee,  at the request and
expense of Company,  shall submit to one or more  examinations by a physician of
the  Company's  choice.  A termination  of the  Employee's  employment  with the
Company due to any of the  foregoing  provisions  of this  Section 8(c) shall be
treated as a termination without Cause hereunder.


     (d) Status upon  Termination.  The termination of this  Agreement,  and the
Employee's employment hereunder,  for any reason whatsoever shall constitute the
Employee's  effective  termination and  resignation  from any other positions or
duties with the Company and all of its affiliates.

     (e) Effect of Termination.

          (i) In the event of a termination  of the Employee's  employment  with
     the Company  hereunder for any reason,  subject to the  provisions of 8(a),
     8(b)  and  8(c),  the  Employee  shall  be  entitled  to  receive  all Base
     Compensation  and accrued benefits owing through the date of termination in
     accordance with the Company's normal practices then in effect.

          (ii)  In the  event  of a  termination  of the  Employee's  employment
     without Cause pursuant to Section 8(b) or 8(c) above, the Company shall pay
     the Employee  severance pay in accordance  with Section 8(b) or 8(c) above.
     Furthermore,  if the Employee is  terminated  without  Cause,  all unvested
     options granted to the Employee pursuant to the Equity Inventive Plan shall
     be kept in effect,  or, at the Employee's option, the Company must purchase
     all  unvested   options  at  an  amount   equal  to  the  exercise   price.
     Additionally,  the Company shall have the right, but not the obligation, at
     any time  within 90 days (the  "Without  Cause  Purchase  Period")  of such
     termination  without  Cause  to  purchase  any or all  of  the  vested  but
     unexercised options (the "Vested Options") granted to the Employee pursuant
     to the Equity  Inventive  Plan at a purchase  price equal to the greater of
     (i) the exercise  price of the Vested Options or (ii) the Fair Market Value

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<PAGE>

     of the common  stock for which such Vested  Options may be  exercised as of
     the date of such termination reduced by the exercise price, as the case may
     be. In the event of termination  without Cause,  the Employee agrees not to
     exercise  such Vested  Options  until the  expiration  of the Without Cause
     Purchase  Period or receipt  of notice  from the  Company  that it will not
     exercise its right to purchase the Vested Options.

          (iii) In the event of a termination of the Employee's  employment with
     the Company  hereunder for Cause pursuant to Section 8(a) above, all rights
     of the Employee under this Agreement  shall  immediately  terminate and the
     Company  shall have no further  obligations  hereunder,  subject to Section
     8(e)(i)  above  and  this  provision.   Furthermore,  if  the  Employee  is
     terminated for Cause, all unvested options granted to the Employee pursuant
     to the Equity Inventive Plan shall be kept in effect,  or at the Employee's
     option,  the Company must  purchase  all  unvested  options at the exercise
     price.  Additionally,  the  Company  shall  have  the  right,  but  not the
     obligation, at any time within 90 days (the "For Cause Purchase Period") of
     such  termination  for Cause to purchase  any or all of the Vested  Options
     granted to the Employee pursuant to the Equity Inventive Plan at a purchase
     price equal to the lesser of (i) the exercise  price of the Vested  Options
     or (ii) the Fair  Market  Value of the common  stock for which such  Vested
     Options may be exercised as of the date of such termination  reduced by the
     exercise  price, as the case may be. In the event of termination for Cause,
     the  Employee  agrees  not  to  exercise  such  Vested  Options  until  the
     expiration  of the  Purchase  Period or receipt of notice  from the Company
     that it will  not  exercise  its  right to  purchase  the  Vested  Options.
     Notwithstanding  any of the  foregoing,  in the event that the  Company has
     terminated  Employee's  employment on account of a Theft Event, the Company
     shall be  entitled  to  withhold  from any  amounts  otherwise  payable  to
     Employee  under this  Subsection  8(b)(iii) the amount of monetary  damages
     incurred by the Company from such Theft Event which shall be quantified and
     determined  in  writing  by the  Company  within 90 days  after the date of
     termination.

          (iv) "Fair Market Value" shall be the weighted  average  closing "bid"
     price for the  Company's  publicly  traded  common  stock  for the  fifteen
     trading days immediately preceding the termination date; provided, however,
     that if the Company's common stock is not publicly traded,  the price shall
     be based upon the price per share  paid by third  party  investors  for the
     Company's Common Stock in a private placement of at least $1,000,000 of the
     Company's Common Stock most recently before the date of termination.

     9. Noncompetition and Confidentiality.

     (a)  Noncompetition.  During the  Employment  Period  and, in the case of a
termination  of the  Employee's  employment  for Cause,  for a period of six (6)
months  following the date of termination  of  employment,  or, in the case of a
termination of the Employee's  employment without Cause, for a period of one day
following the date of  termination  of employment  (the "Covered  Period"),  the
Employee  agrees not to engage in any  Competitive  Activity within one (1) mile
where the Company has operations or has an area of mutual interest ("AMI") in an
oil and gas  property  anywhere  in  United  States.  As used  herein,  the term
"Competitive  Activity"  shall mean the  following:  (i)  providing  competitive

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<PAGE>

services,  other than on behalf of the  Company,  to any  Customer  (as  defined
below); (ii) serving as an officer,  director,  employee,  consultant,  advisor,
agent or representative of, or otherwise associating in any other capacity with,
any  person,   corporation,   partnership,   limited  liability  company,   sole
proprietorship,  association  or  other  business  enterprise,  other  than  the
Company,  engaged  in the  business  of oil and gas  exploration,  drilling  and
production  or any other  business  in which the  Company  is engaged  (each,  a
"Competitive   Enterprise"),   or  engaging   individually  in  any  Competitive
Enterprise;  (iii) owning or acquiring,  directly or indirectly, any interest in
any Competitive Enterprise (provided,  however, the Employee shall be allowed to
passively own for investment purposes,  directly or indirectly, no more than ten
percent (10%) of the issued and outstanding  publicly  traded  securities of any
issuer  engaged in a Competitive  Enterprise);  (iv)  soliciting or inducing any
partner,   stockholder,   member,  principal,   director,   officer,   employee,
consultant,  agent  or  other  representative  of the  Company  or  one or  more
affiliates to leave the employ or retention of the Company or such  affiliate or
hiring away any of the foregoing persons; and/or (v) encouraging,  requesting or
advising,  explicitly or implicitly,  any Customer or supplier of the Company or
one or more of its  affiliates  to  withdraw,  curtail  or cancel  its  business
relationships  with the  Company  or any  affiliate  thereof  (unless  expressly
requested to do so by the Company as part of the Employee's  employment services
provided hereunder).

     As used in this Section 9, the term "Customer" shall include any person who
is or was a customer of the Company or an  affiliate  thereof at any time during
the period  commencing with the Employment Period through the end of the Covered
Period.

     (b) Confidentiality.  During the Employment Period and for a period of five
(5) years  thereafter,  the  Employee  shall  not,  except as may  otherwise  be
required by law, directly or indirectly disclose to any person or entity, or use
or cause to be used in any manner adverse to the interests of the Company or any
affiliate  thereof,  any  Confidential  Information  (as  defined  below in this
Section 9(b)).  The Employee agrees that, upon the termination of his employment
with the Company for any reason, all Confidential Information (other than a copy
of this Agreement and any other agreements that have been personally executed by
the  Employee  other than in his  capacity  as an officer  of the  Company)  and
duplicates thereof in the possession or control of the Employee,  in any form or
format,  including,  without limitation,  written,  visual, audio, electronic or
magnetic  formats,  shall  forthwith be returned to the Company and shall not be
retained by the Employee or furnished or  communicated to any third party in any
form whatsoever.

     As used in this Section 9(b),  the term  "Confidential  Information"  shall
mean the following:  (i)  information  disclosed to the Employee or known by the
Employee as a consequence of the Employee's relationship with the Company or any
Affiliate  thereof,  as defined  below,  not  generally  known in the  Company's
business, about the Company's or an Affiliate's employees, customers, directors,
officers, partners, shareholders, advertising methods, public relations methods,
business plans, operations, methods, processes and forecasts, vendors, finances,
trade marks, trade secrets, source code, patent applications,  manuals, designs,
technical  specifications  and other  intellectual  property;  (ii)  information
disclosed  to the  Employee  or known by the  Employee as a  consequence  of the
Employee's relationship with the Company or any Affiliate thereof, not generally

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known in the  businesses in which the customers of the Company or its affiliates
are or  may  be  engaged,  about  the  products,  processes,  operations,  trade
information and services of any such customer; or (iii) information disclosed to
the  Employee  by the  Company  or  any of its  affiliate  which  is  marked  as
"confidential"  or,  if  communicated   verbally,  is  followed  up  by  written
correspondence  designating such information as  "confidential."Affilaite  shall
mean any person or entity  that  directly,  or  indirectly,  through one or more
intermediaries,  controls, or is controlled by, or is under common control with,
the Company.

     (c) Severability.  The invalidity or  nonenforceability of any provision of
this Section 9 in any respect shall not affect the validity or enforceability of
the other  provisions  of this Section 9 in any other  respect,  or of any other
provision of this  Agreement.  In the event that any provision of this Section 9
shall be held invalid or unenforceable  by a court of competent  jurisdiction by
reason of the  geographic or business  scope or the duration  thereof or for any
other  reason,  such  invalidity  or  unenforceability  shall attach only to the
particular  aspects of such provision found invalid or  unenforceable as applied
and shall not affect or render invalid or  unenforceable  any other provision of
this Section 9 or the enforcement of such provision in other circumstances,  and
this Section 9 shall be construed as if the  geographic or business scope or the
duration  of such  provision  or other  basis on which such  provision  has been
challenged  had  been  more  narrowly  drafted  so  as  not  to  be  invalid  or
unenforceable.

     10. Business Opportunities.  During the Employment Period,  excluding prior
working  interests in oil and gas leases owned by Employee,  the Employee agrees
to bring all  business  opportunities  to the Company  relating to or  otherwise
associated with the business or businesses then conducted by the Company or each
affiliate  thereof,  or business or  businesses  proposed to be conducted by the
Company or any such  affiliate.  Subject to the  Employee's  fulfillment  of his
full-time employment duties hereunder, the Employee may pursue any such business
opportunity or  opportunities  for his own account if the Company decides not to
exploit any such business opportunity.

     11. Rights to Work Product.  The Employee agrees that all work performed by
the Employee  pursuant  hereto shall be the sole and  exclusive  property of the
Company,  in whatever stage of  development  or completion.  With respect to any
copyrightable  works  prepared in whole or in part by the  Employee  pursuant to
this  Agreement,  including  compilations  of lists or data, the Employee agrees
that all such works will be  prepared as  "work-for-hire"  within the meaning of
the Copyright Act of 1976, as amended (the "Act"), of which the Company shall be
considered the "author"  within the meaning of the Act. In the event (and to the
extent)  that such works or any part or element  thereof is found as a matter of
law not to be a  "work-for-hire"  within the  meaning of the Act,  the  Employee
hereby assigns to the Company the sole and exclusive  right,  title and interest
in and to all  such  works,  and all  copies  of any of  them,  without  further
consideration,  and agrees, to the extent reasonable under the circumstances, to
cooperate  with the Company to register,  and from time to time to enforce,  all
patents,  copyrights and other rights and protections  relating to such works in
any and all countries.  To that end, the Employee  agrees to execute and deliver
all documents requested by the Company in connection therewith, and the Employee

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hereby  irrevocably  designates and appoints the Company as the Employee's agent
and  attorney-in-fact  to act  for  and on  behalf  of the  Employee  and in the
Employee's stead to execute, register and file any such applications,  and to do
all other lawfully  permitted acts to further the  registration,  protection and
issuance of patents, copyrights or similar protections with the same legal force
and effect as if  executed by the  Employee.  The Company  shall  reimburse  the
Employee for all reasonable costs and expenses incurred by the Employee pursuant
to this Section 11.

     12. No  Disparaging  Statements.  During the Term of employment and for one
(1) year after  termination  of this  Agreement for any reason  whatsoever,  the
Employee  and  the  Company  agree  to  refrain  from  making  any   disparaging
statements, either orally or in writing, about the other party (and, on the part
of the Employee, about any affiliate of the Company, or any directors, officers,
shareholders,  employees,  agents or other representatives of the Company or any
affiliate thereof).

     13.  Survival.  The provisions of Sections 8(b), 8(d), 8(e), 9, 11, 12, 14,
15, 16 and 17 hereof shall  survive the  termination  of this  Agreement for the
applicable  time period  necessary to fully  effectuate  the  provisions of such
sections.

     14.  Compliance  With Other  Agreements.  The Employee and the Company each
hereby  represent  and warrant to the other that the  execution  and delivery of
this Agreement and the  performance of such party's  obligations  hereunder will
not,  with or without  the  giving of notice  and/or  the  passage of time,  (i)
violate any  judgment,  writ,  injunction  or order of any court,  arbitrator or
governmental  agency  applicable to such party, or (ii) conflict with, result in
the breach of any  provision of or the  termination  of, or constitute a default
under, any agreement to which such party is a party or by which such party is or
may be bound.  The parties  agree to indemnify and hold harmless each other from
any liability,  judgment or claim  incurred,  entered or made against such party
based on its reliance on the representations and warranties made in this Section
14,  including  all costs and expenses and  attorney's  fees incurred or paid by
such party in connection with the foregoing.

     15.  Injunctive  Relief.  The  Employee  acknowledges  and agrees  that the
Company and its affiliates are engaged in a highly competitive business and that
the  protections of the Company and each such affiliate set forth in Sections 9,
10 and 11 of this  Agreement are fair and reasonable and are of vital concern to
the Company and its affiliates.  Further,  the Employee  acknowledges and agrees
that monetary  damages for any  violation of such  Sections will not  adequately
compensate  the Company and its affiliates  with respect to any such  violation.
Therefore,  in the  event of a breach  by the  Employee  of any of the terms and
provisions  contained  in  Sections  9, 10 or 11 hereof,  the  Company  shall be
entitled to institute  legal  proceedings  to obtain damages for any such breach
and/or to enforce the specific performance of this Agreement by the Employee and
to enjoin the Employee from any further  violations.  The remedies  available to
the Company  pursuant to this  Section 15 may be exercised  cumulatively  by the
Company in conjunction with all other rights and remedies provided by law.

     16.  Arbitration  Of  Disputes.  If any  dispute  shall  arise  between the
Employee and the Company in  connection  with this  Agreement,  and such dispute
cannot be resolved  amicably by the parties,  the same shall be conclusively and

                                       9
<PAGE>

finally  resolved  by binding  arbitration.  Any party  hereto may  commence  an
arbitration proceeding by providing written notice to the other party requesting
the arbitration of an unresolved  dispute.  Each such dispute,  if any, shall be
submitted to three (3) arbitrators,  one (1) to be selected by the Employee, one
(1) to be selected by the Company,  and the third to be selected by agreement of
the two arbitrators chosen by the parties. If either the Employee or the Company
refuses or  neglects  to appoint an  arbitrator  within  thirty  (30) days after
receipt of written notice from the other party  requesting the other party to do
so, the American Arbitration Association may appoint two (2) arbitrators. If the
two  arbitrators  fail to agree on the  selection of a third  arbitrator  within
thirty  (30) days of their  appointment,  the  appointment  shall be left to the
American  Arbitration  Association.  The arbitrators shall be experienced in the
subject  matter of the  dispute.  Except  as  otherwise  specifically  set forth
herein,  the  arbitrators  shall conduct the  arbitration in accordance with the
Commercial  Arbitration  Rules  of the  American  Arbitration  Association.  The
decision  in writing  of any two (2)  arbitrators,  when filed with the  parties
hereto, shall be final and binding on both parties. Judgment may be entered upon
the final  decision of the  arbitrators in any court having  jurisdiction.  Such
arbitration  shall  take  place at a location  to be  mutually  agreed to by the
Employee and the Company;  provided,  however,  that if the Company and Employee
cannot agree on a location, the place shall be selected by the arbitrators.  All
costs and expenses  associated with any such arbitration  proceeding(s) shall be
paid pursuant to the award of the arbitrators,  and if not so awarded,  shall be
borne equally by the Employee and the Company.

     Notwithstanding  anything to the  contrary  contained  in this  Section 16,
nothing  shall  prohibit  the Company or Employee  from  pursuing  all legal and
equitable  remedies  available to the Company in order to enforce the provisions
of Sections 9, 10 and 11 of this Agreement.  To the extent that any court action
is permitted  consistent with or to enforce this  Agreement,  the parties hereby
consent to the  jurisdiction of the federal or state courts sitting in any state
where the Company  maintains  an office.  Accordingly,  with respect to any such
court action, all of the parties hereto (a) submit to the personal  jurisdiction
of such  courts,  (b)  consent to  service  of  process  and (c) waive any other
requirement  (whether  imposed by statute,  rule of court,  or  otherwise)  with
respect to personal jurisdiction or service of process.

     17.  Litigation  Costs.  In the  event the  Company  shall  prevail  in any
litigation  arising in respect of  Sections 9, 10 or 11 of this  Agreement,  the
Employee shall reimburse the Company, its affiliates and any of the Company's or
its  affiliates'  directors,   officers,   agents  or  representatives  for  all
reasonable fees and expenses (including attorneys' reasonable fees and expenses)
incurred  by the  Company  and such  persons  or  entities  in  respect  of such
litigation. In the event the Employee shall prevail in any litigation arising in
respect of Sections 9, 10 or 11 of this  Agreement,  the Company shall reimburse
the  Employee  for  all  reasonable  fees  and  expenses  (including  attorneys'
reasonable  fees and  expenses)  incurred  by the  Employee  in  respect of such
litigation.

                                       10


<PAGE>

     18.  Amendment;  Waiver;  Discharge.  No provision of this Agreement may be
amended,  waived or  discharged  unless such  amendment,  waiver or discharge is
agreed  to  in  writing  and  signed  by  the  Employee  and a  duly  authorized
representative  of the Company.  No waiver by either party hereto at any time of
any breach by the other party hereto of, or  compliance  with,  any condition or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

     19.  Validity.  The  invalidity  or  unenforceability  of any  provision or
provisions of this Agreement shall not affect the validity or  enforceability of
any other  provision  of this  Agreement,  which shall  remain in full force and
effect.

     20. Notices. All notices,  demands and other communications provided for in
this  Agreement  shall be in writing and shall be  delivered by hand or sent via
fax transmission (with written fax confirmation) or mailed postage prepaid or by
registered,  certified or express mail or reputable  overnight  courier service,
charges  prepaid,  and shall be deemed given when so delivered,  if delivered by
hand, or upon receipt of reasonably adequate fax confirmation,  if faxed, or, if
mailed,  five (5)  business  days after  mailing (or one (1) business day in the
case of express mail or overnight courier service), addressed as follows:

                  If to the Employee:

                  Gregory S. Johnson
                  c/o Petroleum Development Corporation
                  Suite 400
                  4113 Eubank, N.E.
                  Albuquerque, New Mexico 87111
                  (Fax):  (505) 293-4133
                  (Tel.):  (505) 293-4044

                  If to the Company:

                  Warren Resources, Inc.
                  489 Fifth Avenue
                  32nd Floor
                  New York, NY 10016
                  Attention:  Chief Executive Officer
                  (Fax):  (212) 697-9466
                  (Tel.):  (212) 697-9660


or to such other address or person as any party may have  furnished to the other
in writing in  accordance  herewith,  except  that  notices of change of address
shall be effective only upon receipt.

                                       11
<PAGE>

     21.  Headings.  All headings  contained in this Agreement are for reference
purposes only and shall not in any way effect the meaning or  interpretation  of
any provision or provisions of this Agreement.

     22. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter  contained herein and supersedes
all  prior  agreements,  promises,  covenants,   understandings,   arrangements,
communications,  representations or warranties,  whether oral or written, by any
party or representative of any party hereto.

                  23. Assignment and Transfer. The Employee's rights and
obligations under this Agreement shall not be transferable by assignment or
otherwise, and any purported assignment, transfer or delegation thereof shall be
void. This Agreement shall inure to the benefit of, and be binding upon and
enforceable by, any purchaser of substantially all of the Company's assets, any
corporate successor to the Company or any assignee thereof.

     24. Counterparts.  This Agreement may be executed in several  counterparts,
each of which shall be deemed to be an original but all of which  together  will
constitute one and the same instrument.

     25.   Governing  Law.  The  validity,   interpretation,   construction  and
performance of this Agreement  shall be governed by the laws of the State of New
Mexico without regard to its conflicts of law principles.

                   [Signatures follow]


                                       12
<PAGE>





     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.

                                      WARREN RESOURCES, INC.



                                      By: /s/ Norman F. Swanton
                                          --------------------------------------
                                          Name:  Norman F. Swanton
                                          Title:  Chief Executive Officer



                                          /s/ Gregory S. Johnson
                                          --------------------------------------
                                          Gregory S. Johnson






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