EXHIBIT 10.1


 


EMPLOYMENT, NON-COMPETITION, AND
SEVERANCE AGREEMENT

BETWEEN

GOLDEN OVAL EGGS, LLC

AND

WILLIAM P. BLOYER


 


This Employment,
Non-Competition, and Severance Agreement (this “Agreement”), effective for
employment as of February 27, 2006 is entered into by and between Golden
Oval Eggs, LLC, a Delaware limited liability company (“Company”) and William P.
Bloyer, (“VPSC”) and supersede and replaces any prior oral or written agreement
for employment between Golden Oval Eggs, LLC and Bill Bloyer.


 


BACKGROUND


 


The Company desires to continue
to employ Vice President Supply Chain (VPSC) to provide managerial leadership
for the development and implementation of TQM initiatives and integrating the
operational functions of the Company. Company and VPSC are entering into this
Agreement to set forth the terms under which VPSC will be employed as Vice
President Supply Chain of the Company.


 


STATEMENT OF AGREEMENT


 


Company and VPSC (the “Parties”
or either, the “Party”), each in consideration of the promises of the other
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, hereby agree as
follows:


 


1.                                      Employment Term.


 


(a)                                  Initial Term. Upon the terms and conditions set forth in this Agreement and in Exhibit A
attached to and a part of this Agreement, Company offers to employ VPSC,
and VPSC hereby accepts employment on those terms and conditions with Company. The
term of employment under this Agreement shall be for the “Employment Term”
stated in Exhibit A, unless terminated earlier under Section 8.


 


(b)                                 Renewal.
The
Employment Term, under this Agreement, shall automatically renew for successive
one year periods unless either Party notifies the other Party in writing, not
less than 60 days before the end of the then current Employment Term, that this
Agreement shall not be renewed at the end of the then current Employment Term.


 


2.                                      Duties.


 


Generally. VPSC shall be employed as the Vice
President Supply Chain of the Company to provide such services and to have such
duties and responsibilities as are normally associated with that position,
together with any other duties and responsibilities as may be designated
by the CEO from time to time. The VPSC shall devote his full time, attention and
energy to the business affairs of the Company and the performance of VPSC’s
duties under this Agreement.


 

















 


	
  WILLIAM P. BLOYER

  	
   

  	
  EMPLOYMENT
  AGREEMENT

  



 


The VPSC shall discharge the duties in a diligent and proper manner and
shall conduct himself at all times so as to advance the best interests of the
Company. The VPSC shall report to the Company’s CEO.


 


(a)                                  Specific duties of the VPSC include:


 


(1)                                  Directly responsible for strategic initiatives with respect to
continuing to improve quality, production and manufacturing costs,
distribution, safety and morale within the overall supply chain of the company


 


(2)                                  Perform a significant role in the overall strategic
development and operational performance of the business consistent with goals
and objectives established by the Company


 


(3)                                  Provide the leadership and management necessary to ensure that the
company has the proper operational controls, administrative and reporting
procedures, and personnel systems in place to effectively grow the
organization.


 


(4)                                  Reports to the CEO on a regular basis.


 


3.                                      Compensation.


 


(a)                                  Base Salary. During the Employment Term and in consideration of his services
provided hereunder, the Company shall pay VPSC an annual “Base Salary” stated
in Exhibit A and a bonus as provided in Section 4 and Exhibit A.


 


(b)                                 Base Salary Payments. The Base Salary shall be paid in equal biweekly installments each
month of the Employment Term, and prorated on a daily basis for any partial
period for which services are rendered at the end of the Employment Term.


 


(c)                                  Deductions from Compensation. Company shall withhold from VPSC’s compensation payments (Base
Salary and Bonus) state, federal and local income taxes, FICA, social security
and other amounts that are customarily withheld from a VPSC’s compensation.


 


4.                                      Bonus.


 


(a)                                  Payment of Bonus. The Company shall pay to VPSC all bonuses for which the VPSC is
eligible as provided in Exhibit A. Except for the Equity Capital Markets
Transaction Bonus, which shall be paid as provided in Exhibit A, all
bonuses will be paid by 50% in units of the Company, which are subject to
forfeit back to the Company as provided in paragraph (b), and 50% in cash. The
Company shall pay the cash portion of the bonus no later than 30 days after the
audited financial statements are approved by the Company’s Board of Directors
unless deferred by the VPSC to the next tax year. The ROE Bonus shall be
annualized and prorated to the nearest month end for any partial year for which
services are rendered at the beginning and end of the Employment Term.


 


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(b)                                 Unit Bonus. The
unit portion of any bonus (“Bonus Units”) shall be issued to the VPSC effective
as of the beginning of the fiscal year, subject to forfeiture to the Company. Certain
Bonus Units will forfeit upon:  (1) termination
of employment for cause (Section 8(a)(4)); or (2) termination at VPSC’s
election (Section 8(a)(6)) (“Forfeiture Event”). Within one year after the
effective issuance of the Bonus Units, all of the Bonus Units are
nontransferable, and shall forfeit back to the Company with no rights relating
to the Bonus Units remaining with the VPSC if a Forfeiture Event occurs. One (1) year
after the effective issuance of the Bonus Units, the forfeiture and
nontransferability restrictions on one-third (1/3) of the Bonus Units terminate.
After one (1) year and until two (2) years after the effective
issuance of the Bonus Units, two-thirds (2/3) of the Bonus Units are
nontransferable, and shall forfeit back to the Company with no additional
rights relating to the forfeited Bonus Units remaining with the VPSC if a
Forfeiture Event occurs. Two years after the effective issuance of the Bonus
Units the forfeiture and nontransferability restrictions on an additional
one-third (1/3) (two-thirds (2/3) of the Bonus Units in total) terminate. After
two (2) years and until three (3) years after the effective issuance
of Bonus Units, one-third (1/3) of the Bonus Units are nontransferable, and
shall forfeit back to the Company with no rights relating to the forfeited
Bonus Units remaining with the VPSC if a Forfeiture Event occurs. The
forfeiture and nontransferability restrictions remaining Bonus Units held by
the VPSC are terminated:  (1) at the
end of three years after the effective issuance of Bonus Units to the VPSC; (2) notwithstanding
the restrictions above at any time a change of control of the Company resulting
in a different group of owners obtaining governance rights to elect a majority
of the Board of Directors occurs; or (3) notwithstanding the restrictions
above, at any time, if the retirement of the VPSC occurs at age 59 1⁄2 years of
age or older.


 


Except for the Equity Capital
Markets Transaction Bonus, which shall be paid as provided in Exhibit A,
the amount of units to be awarded as part of the bonus shall be based on
the higher of book or market value of the units at the time the bonus is
awarded. Book value shall be determined by the most recent year-end audited
financial statements. Market value shall be determined by the average price of
units that have traded in the secondary market during the preceding fiscal
year.


 


If the Employment Term is
terminated prior to the end of a fiscal year, bonuses shall be calculated based
on the financial statements of the most recent fiscal quarters prior to the
termination.


 


5.                                      VPSC Benefits, Expenses. VPSC shall have, and the Company shall provide for, the following
benefits and expenses during the Employment Term:


 


(a)                                  Group Benefits. VPSC shall be entitled to participate in group life insurance,
long-term disability, group health and hospitalization, vision and dental,
401(k) retirement program and other group benefits as are presently or may hereafter
be provided to other employees of Company, which benefits may be in
varying amounts and scope relative to the age, years of employment,
compensation and pay status of the employees.


 


(b)                               Business Expenses. Upon VPSC’s periodic presentation to Company of an itemized
account, the Company shall pay or reimburse VPSC for reasonable expenses
incurred


 


3

















 


by VPSC on behalf of Company
directly in connection with, and reasonably necessary for the rendering of, his
services to Company under this Agreement.


 


(c)                                  Vacation. VPSC
shall be entitled to four weeks paid vacation for each 12-month period of the
Employment Term.


 


6.                                      VPSC Beneficiary. If VPSC has
deceased:  (1) during the Employment
Term, or (2) after this Agreement expires or is terminated, the payments
due or payable to VPSC shall be paid or payable to the VPSC’s beneficiary
(referred to as the “Designated Beneficiary”). If the VPSC has deceased, the
Designated Beneficiary shall have the authority of the VPSC under this
Agreement on a post-termination basis (for example, to hold or transfer units,
to receive payments, etc.).


 


The Designated Beneficiary is
Patricia Ann Bloyer, wife, if she is then living, (Primary Beneficiary); or if
Patricia Ann Bloyer is not then living, the trustee, serving as trustee of the
estate of Bill Bloyer, Anthony F. Tedesco (Second Beneficiary). The trustee as
the Second Beneficiary shall be entitled to receive the payments due or payable
to VPSC and the trustee shall have the authority of the VPSC under this
Agreement on a post-termination basis, provided the Company has been notified
in writing of the trustee and there is demonstration that the trustee is duly
authorized to act as such. Upon request, the CEO will acknowledge the trustee
as Second Beneficiary upon receipt of proper notification.


 


VPSC may change the
Designated Beneficiary by submitting a written change of beneficiary form to
the CEO. If the Company is unable to determine or locate the Designated
Beneficiary in the two functions of:  (1) to
whom or what entity should payments due or payable to VPSC be paid; and (2) who
shall have the authority of the VPSC under this Agreement on a post-termination
basis, then the Designated Beneficiary shall be deemed to be the estate of the
VPSC as to the entity to which the payments should be made, and the
administrator of VPSC’s estate shall have the authority of the VPSC to make any
elections as to how to receive payments or units, to transfer units or to
negotiate a resolution of compensation issues of payments or units in place of
the VPSC under this Agreement on a post-termination basis.


 


7.                                      Life Insurance. Company may at any time, in its discretion, apply for and
procure, as owner and for its own benefit, insurance on the life of VPSC in
such amounts and in such form or forms as Company may choose. VPSC
shall have no interest in any such policy or policies, but VPSC shall, at the
request of Company, submit to such medical examinations, supply such
information and execute such applications, instruments and other documents as may be
required by the insurance company or companies to whom Company has applied for
such insurance.


 


8.                                      Termination of Agreement.


 


(a)                                  Termination Events. The Employment Term shall terminate upon the first to occur of any
of the following:


 


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(1)                                  Last
Day of Term. The
last day of the then-current Employment Term if either Party has notified the
other, in accordance with Section 1, that the Employment Term will not be
renewed;


 


(2)                                  Date Set By Company. A date within the Employment Term specified by the Company by
written notice to the VPSC to terminate VPSC’s employment;


 


(3)                                  Death or Permanent Disability. The death or permanent disability of VPSC which, for purposes of
this Agreement, the “permanent disability” of VPSC shall be deemed to occur on
the earlier of: (1) the date on which VPSC is determined to be permanently
disabled for the purposes of any disability benefits provided to VPSC by
Company; or (2) the date as of which VPSC has been incapable of performing
VPSC’s duties under this Agreement for a continuous period of 60 days or for
periods aggregating 60 days within a period of 365 days; or (3) the date
of certification to Company by a physician approved by Company that VPSC is so
mentally or physically disabled or impaired as to be incapable of engaging in
and performing the duties of the employment position with Company which VPSC
occupied prior to the commencement of the disorder that led to the disability
and upon the certification by the physician that the disability is likely to be
permanent;


 


(4)                                  For Cause. A
date specified by Company by written notice to VPSC of Company’s intention to
terminate the Employment Term for Cause which, for purposes of this clause (4),
“Cause” shall mean:  (i) repeated
disobedience or insubordination after written notice of same by the CEO to VPSC
identifying this paragraph of this Agreement and if the disobedience or
insubordination is not cured by VPSC within ten (10) days after receiving
notice from Company, (ii) any other breach by VPSC of any of his
agreements contained in this Agreement if the breach is not cured by VPSC
within ten (10) days after receiving notice of the breach from Company, (iii) willfully
making derogatory statements regarding Company, (iv) misappropriation of
any of Company’s funds, (v) fraud, or (vi) any criminal conviction of
an act of moral turpitude by VPSC;


 


(5)                                  Mutual Agreement. The mutual agreement of Company and VPSC; or


 


(6)                                  VPSC Termination. A date specified by VPSC by written notice to Company of VPSC’s
intention to terminate the Employment Term.


 


(b)                                 Notice Requirements. Any notice of termination by either Party under this Section 8
shall clearly state that the terminating Party elects to terminate the
Employment Term and shall specify the subsection of this Section 8
upon which the Party is relying as the basis for the termination.


 


(c)                                  Effect of Termination. Except as specifically provided in Section 10 with respect to
any applicable continuing covenants or agreements of VPSC, subject to the
provisions for severance benefits contained in Section 9, subject to the
assignment provisions under Section 13, and subject to indemnification for
actions during the employment under Section 12, if the Employment Term is
terminated for any reason whatsoever pursuant to this Section 8:


 


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(1)                                  this Agreement shall be terminated and of no further force or
effect;


 


(2)                                  VPSC shall have no obligation or duty to further serve Company in
any capacity; and


 


(3)                                  Company shall not be under any obligation or duty to employ VPSC or
provide the benefits specified in Section 5 other than through the
Employment Term or as required by law or make any of the payments provided in Section 4,
except to the extent the obligations of payments which have accrued prior to the
effective date of the termination and remain unpaid as of the date of the
termination; provided, however, that Company may offset against, and
deduct from, any amounts due to VPSC under this Agreement the amount of any
losses, costs or other damages incurred by Company, as the case may be, in
connection with any actions constituting “Cause” for termination of VPSC
pursuant to Subsection (a), clause (4)(iv) or (v) above.


 


9.                                       Severance Benefits. In the event that the Employment Term is terminated other than by
death or permanent disability under Section 8(a)(3), then the Company
shall pay VPSC an amount equal to the Base Salary that would otherwise be
payable to VPSC under this Agreement for a period of twelve (12) months
following termination (the “Severance Period”) or as long as the noncompetition
restriction in Section 10(a) is effective and all of Section 10
is complied with by VPSC. The amount shall be payable at normal salary payment
intervals in effect for Company’s executive personnel. In addition, the Company
shall provide to VPSC the group benefits referred to in Subsection 5(a) for
the Severance Period. In the event any applicable law or any benefit plan
referred to in Subsection 5(a) prohibits or otherwise precludes the
provision of benefits to an individual whose employment with Company has
terminated, then the Company shall pay to VPSC as expeditiously as is
practicable after the effective date of termination the cash equivalent of any
prohibited or precluded benefits.


 


10.                               Certain VPSC Covenants. VPSC expressly covenants and agrees to and with Company as set
forth in this Section:


 


(a)                                  Non-competition. VPSC recognizes and acknowledges that he has been trained by and
has knowledge of know how acquired during his employment with the Company.
During the Employment Term and for a period of twelve (12) months after the
termination of the Employment Term, VPSC shall not, without the written consent
of Company, within the United States of America, participate through management
or control or be employed by any business or enterprise which is engaged in any
business activity similar to that of the Company that competes with the Company
for the Company’s egg product markets or sources of egg supplies.


 


(b)                                 Confidential Information. VPSC recognizes the interests of Company in maintaining the
confidential nature of its respective proprietary and other business and
commercial information. VPSC shall not, at any time after the Employment Term,
or in any manner that does not promote the interests of the Company during the
Employment Term, directly or indirectly, publish, disclose or use, or authorize
anyone else to publish, disclose or use, any secret, confidential or
proprietary information of Company, or any of its respective


 


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affiliates, except for such information as is
in the public domain through no fault of VPSC, which is acquired by VPSC in
connection with VPSC’s employment with Company or work with the Company prior
to the date hereof or thereafter and relates to any aspect of the operations,
activities, research, investigations or obligations of Company, or any of its
respective affiliates, including, without limitation:  (1) the information described in Subsection (c) below;
(2) information pertaining to Company, the business of the Company, or the
business of any of Company’s respective affiliates; and (3) other
confidential material or information relating to the business, customers,
suppliers, trade or industrial practices, trade secrets, technology, know-how
or intellectual property of Company or any of Company’s affiliates
(collectively, the “Confidential Information”). All records, files, data,
documents and the like relating to suppliers, customers, costs, prices,
systems, methods, personnel, equipment and other materials relating to Company,
or the Company’s affiliates (including, but not limited to, the Confidential
Information), shall be and remain the sole property of Company or Company’s
affiliate, as the case may be. Any disclosure of Confidential Information
by the VPSC shall include appropriate protection for the type of information to
protect the Company’s interests in the Confidential Information. Upon
termination of VPSC’s employment under this Agreement, VPSC shall not remove
from Company’s premises, or retain, any of the Confidential Information
materials described in this Section.


 


(c)                                  Development of Information and
Intellectual Property. During the Employment Term,
VPSC shall keep Company informed of any and all customer lists, supplier lists,
manuals, handbooks, inventions, discoveries, improvements, trade secrets,
secret processes, technology, know-how or intellectual property made or
developed by VPSC, in whole or in part, or conceived of by VPSC, alone or with
others, which results from VPSC’s employment with Company or any work VPSC may do
for, or at the request of, Company or which relates to the operations,
activities, research, investigations or obligations of Company (collectively,
the “Information”).


 


VPSC shall assign, transfer and
set over, and hereby assigns, transfers and sets over to Company, all of VPSC’s
right, title and interest in and to any and all information, and any patents,
patent applications, copyrights, trademarks, trade names or other intellectual
property rights relating thereto, provided or conceived by VPSC and related to
the information during the Employment Term.


 


(d)                                 Return of Information. Upon termination of VPSC’s employment for whatever reason, VPSC
shall return to or leave with Company, without making or retaining copies
thereof, all documents, records, notebooks and other repositories containing
Confidential Information.


 


(e)                                  Breach of Covenants. If VPSC breaches any of the covenants and agreements contained in
this Section 10, then, in addition to any other rights or remedies of
Company hereunder, Company shall have at its option the following specific
rights and remedies: (1) VPSC’s right to any payments pursuant to Sections
3, 4, 5 and 9 may be terminated by Company; (2) Company shall have
the right to enforce any legal or equitable remedy (including injunctive
relief) that may be available to Company; and (3) Company shall be
entitled to an accounting and repayment of all profits, compensation,
commissions,


 


7

















 


remuneration, or other benefits that VPSC has
directly or indirectly realized or may realize as a result of any such
breach and VPSC acknowledges that any breach of the covenants and agreements
under this Section 10 will cause irreparable harm and injury to Company.


 


Except to the extent otherwise
expressly limited to a restricted period in Subsection (a) of this
Section, all covenants and provisions contained in this Section 10 shall
survive any termination of VPSC’s employment with Company.


 


11.                                 Notices. Any
notice or other communication required or desired to be given under this
Agreement shall be in writing and shall be deemed duly given to a Party when
personally delivered or when mailed by first class mail, registered or
certified, return receipt requested and postage prepaid, addressed to the Party
at the address set forth below or at such other address as may be
specified by the Party by a notice to the other Party:


 


If to Company:


 


Golden Oval
Eggs, LLC


1800 Park
Avenue East, P.O. Box 615


Renville,
MN  56284


Attention:
President & CEO


 


If to VPSC:


 


Mr. Bill
Bloyer


8881 Jane Road
N.


Lake Elmo, MN
55042


 


12.                               Waiver: Remedies Cumulative. No waiver of any right or option hereunder by either Party shall
operate as a waiver of any other right or option, or the same right or option
as respects any subsequent occasion for its exercise, or of any legal remedy.
No waiver by any Party of any breach of this Agreement or of any agreement or
covenant contained in this Agreement shall be held to constitute a waiver of
any other breach or a continuation of the same. All remedies; provided by this
Agreement are in addition to all other remedies provided by it or applicable
law.


 


13.                                Assignment. This
Agreement shall be binding upon and inure to the benefit of the successors and
assigns of Company and shall survive any change of control or change of
ownership of Company. Neither this Agreement nor any rights under this
Agreement shall be assignable by VPSC and any purported assignment by VPSC
shall be void and of no force or effect.


 


14.                                Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota.


 


15.                               Enforceability; Understanding; Amendment. The invalidity or unenforceability of any term or provision of this
Agreement shall not impair or affect the other provisions of this Agreement,
which shall remain in full force and effect. This Agreement shall


 


8

















 


constitute the entire understanding between
Company and VPSC concerning VPSC’s employment and shall supersede any and all
previous agreements, whether written or oral, between the Parties concerning
such employment. This Agreement cannot be amended or modified in any respect
unless such amendment or modification is evidenced by a written instrument
executed by Company and VPSC. The captions of the various sections of this
Agreement are not a part of the context hereof, but are inserted merely
for convenience in locating the different provisions hereof and shall be
ignored in construing this Agreement.


 


16.                               Indemnification. Company agrees to indemnify and hold harmless VPSC for any matter
relating to his performance of his obligations under this Agreement, other than
acts taken by VPSC with the intention to harm Company and except to the extent
that VPSC may incur criminal liability for his acts. The obligation to
indemnify and hold harmless includes, but is not limited to, all pending
litigation and claims against Company, its officers, employees and directors.
The expenses against which VPSC is indemnified include, but are not limited to,
all reasonable attorney fees and other costs associated with legal
representation.


 


17.                                 Opportunity for Independent Legal Counsel. This Agreement has been prepared by legal counsel acting as
representative solely to Company. VPSC confirms that he has been afforded the
opportunity to review this Agreement with his independent legal counsel.


 


IN WITNESS WHEREOF, the Parties
have executed multiple counterparts of this Agreement, each of which is deemed
to be an original, this 5th day of April, 2006.


 


 


	
  COMPANY:

  	
  VPSC:

  
	
  GOLDEN OVAL EGGS,
  LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Dana Persson

  	
   

  	
  /s/ William P. Bloyer

  	
   

  
	
   

  	
  President & CEO

  	
   

  	
  William P. Bloyer

  	
   

  



 


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EXHIBIT A


 


EMPLOYMENT,
NON-COMPETITION, AND SEVERANCE AGREEMENT


BETWEEN


GOLDEN
OVAL EGGS, LLC


AND


BILL
BLOYER


 


TERMS
AND CONDITIONS


 


	
  1.

  	
   

  	
  Effective Date:

  	
   

  	
  February 27, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Employment Term:

  	
   

  	
  From February 27, 2006 until August 31,
  2009

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Base Salary:

  	
   

  	
  The annual base salary shall be $160,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  ROE Bonus:

  	
   

  	
  Company shall pay VPSC a bonus based upon
  the Company’s return on equity (“ROE”) calculated from the Company’s audited
  financial statements for each fiscal year during the Employment Term (“ROE
  Bonus”). The table below shall be used to determine the ROE Bonus as a
  percent of Base Salary through interpolation between the numbers stated. For
  Example, if Company’s ROE is 16%, the ROE bonus shall be 65.625% of the Base
  Salary.

  



 




	
  ROE

  	
   

  	
  < 4.0

  	
   

  	
  4.0

  	
   

  	
  9.0

  	
   

  	
  14.0

  	
   

  	
  18.0

  	
   

  	
  22.0

  	
   

  	
  27.0

  	
   

  	
  33.0

  	
   

  	
  40.0

  	
   

  	
  > 40

  	
   

  
	
   

  	
   

  	
  0%

  	
   

  	
  18.75

  	
  %

  	
  37.5

  	
  %

  	
  56.25

  	
  %

  	
  75

  	
  %

  	
  93.75

  	
  %

  	
  112.5

  	
  %

  	
  131.25

  	
  %

  	
  150

  	
  %

  	
  150

  	
  %

  






 


	
   

  	
   

  	
   

  	
   

  	
  The Company’s ROE shall be calculated by
  dividing Company’s Fiscal Year Net Income by Company’s Previous Fiscal Year
  End Equity. Fiscal Year Net Income means the net income reported in the
  audited consolidated statement of operations for the fiscal year with the
  following adjustments as relevant:  (a) add
  back any bonuses to management that have been deducted in calculating the
  consolidated statement of operations and (b) any adjustments for any
  non-recurring income or expense or other exogenous event as determined by the
  Board of Directors in its sole discretion. No ROE Bonus will be paid below a
  4.0% ROE. The maximum percentage is 150%, which cap may be lifted in the
  discretion of the Board of Directors.

  



 


A-1

















 


	
  5.

  	
   

  	
  Discretionary Individual 

  	
   

  	
   

  
	
   

  	
   

  	
  Performance Bonus:

  	
   

  	
  VPSC will be eligible for an individual
  performance bonus of up to 50% of VPSC’s base salary (up to $80,000 maximum)
  based on individual performance. The CEO and VPSC will establish specific
  goals by the beginning of each year, which may be adjusted due to
  changed circumstances or new information as agreed by VPSC and CEO.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Equity Capital Markets 

  	
   

  	
   

  
	
   

  	
   

  	
  Transaction Bonus:

  	
   

  	
  Concurrent with the completion of one or
  more transactions in which equity interests in the Company or a subsidiary
  are offered through the equity capital markets to investors “Equity Capital
  Markets Transaction” or the (“Transaction”), the VPSC shall be paid an amount
  equivalent to .5% of the members gain on ownership whether in cash or equity
  interests in the Company (“Member’s Gain on Equity”). Member’s Gain on Equity
  shall be measured by using Total Transaction value to determine the new
  equity value of the Company less the book value immediately prior to the
  Transaction and less any costs directly related to the Transaction. This
  bonus shall be paid to the VPSC in the same form (or forms) of payment
  as received by the other unitholders of the Company as a result of the
  Transaction.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Similarly, if more than 20% of the fixed or
  operating assets of the Company are sold which would represent a proportional
  gain on Member’s Gain on Equity allocated to those assets on a pro rata
  basis, or has a change in control resulting in a gain on Member’s Gain on
  Equity, then VPSC shall be paid a “Liquidation Bonus” equivalent to .5% of
  the actual or proportional Gain on Member’s Equity. The date for
  determination of such percentage amount shall be as of the effective date of
  the sale, merger, consolidation, or change in control and the liquidation
  bonus shall be paid upon closing of the transaction. This bonus shall be paid
  to the VPSC in the same form (or forms) of payment as received by the
  other unitholders of the Company as a result of the Transaction.

  



 


A-2