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Employee’s Base Salary will be increased to the rate of $255,000 per annum. The Base Salarywill be paid in substantially equal installments in accordance with Employer’s regular payrollpractices, as in effect from time to time, and subject to all appropriate withholdings.     **4.2 Bonus**. Employee shall be eligible to receive a cash bonus on an annual basis in the eventthat Employee meets certain performance criteria established in advance in writing by theCompensation Committee of Employer’s Board of Directors (the “***Compensation Committee***”) for suchyear (“***Performance Criteria***”). Additional bonuses may be paid to Employee at such times and insuch amounts as may be determined in the sole discretion of the Compensation Committee. Ifawarded, payment of all bonuses will be subject to all appropriate withholdings.     **4.3 Equity Incentive Grants.**     (a) **Original Stock Options**. Pursuant to the terms of the Original Agreement, Employeereceived a one-time grant of options to purchase up to 300,000 shares of common stock ofEmployer at an exercise price equal to $1.20 per share (the “***Original Stock Options***”). TheOriginal Stock Options were granted pursuant to the terms and conditions of the Employer’s2005 Stock Incentive Plan, and were evidenced by a separate stock option agreements betweenthe Employer and the Employee. The Original Stock Options had a term of ten years from thedate of grant, and vested and became exercisable in twelve equal quarterly installmentsbeginning on June 30, 2008. As consideration for the Employer’s new equity incentive grantsdescribed below in Sections 4.3(b) and 4.3(c), Employee hereby agrees to theimmediate cancellation of all Original Stock Options.     (b) **New Stock Options**. As will be evidenced by a separate stock option agreement insubstantially the form attached hereto as Exhibit A, the Employer shall grant toEmployee an incentive stock option on the Effective Date or as soon as administrativelyfeasible thereafter, to purchase 150,000 shares of the Employer’s common stock pursuant tothe Employer’s 2005 Equity Incentive Plan (the “***2005 Plan***”). The option will vest in twelve(12) equal quarterly installments with an exercise price equal to the Fair Market Value ofthe Employer’s common stock (as defined in the 2005 Plan) on the Effective Date or theactual date of grant if the grant occurs after the Effective Date.     (c) **Restricted Stock**. As will be evidenced by a separate restricted stock agreementin substantially the form attached hereto as Exhibit B, the Employer shall grant toEmployee pursuant to the 2005 Plan 150,000 shares of the Employer’s common stock on theEffective Date or as soon as administratively feasible thereafter. The restricted stockshall be subject to forfeiture, and will vest in twelve (12) equal quarterly installments.     **4.4 Benefits**. Employee will be entitled to receive the benefits specified on ExhibitA (“***Benefits***”).     **4.5 Expense Reimbursement**. Employer will promptly reimburse Employee for all authorizedexpenses reasonably incurred or paid by Employee in connection with the performance of Employee’sservices under this Agreement upon presentation of expense statements or vouchers and such othersupporting information as Employer may from time to time reasonably require or request(“***Reimbursable Expenses***”).
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     **5. Termination; Payments upon Termination**. This Agreement may be terminated upon thefollowing terms:     **5.1 Termination Upon Death**. If Employee should die during the Employment Term, this Agreementwill terminate on the date of death. All Base Salary through such date and any amounts owed forReimbursable Expenses that Employee incurs through such date, as well as any previously awarded butunpaid bonuses, will be paid to Employee’s designated beneficiary as promptly as practicablefollowing the date of death. All Benefits will, unless otherwise expressly set forth onExhibit A, otherwise provided by Employer policy applicable to its employees generally, orotherwise required by law, terminate on the date of death. In the event of Employee’s death, thestock option described in Section 4.3(b) shall fully vest and become exercisable byEmployee’s legal representative or authorized assignee for a period of no more than six (6) monthsfollowing Employee’s date of death and the restrictions shall immediately lapse with respect to therestricted stock grant described in Section 4.3(c) above.     **5.2 Termination Upon Disability**. This Agreement shall automatically terminate upon theEmployee’s Disability (as defined below). The Base Salary will continue to be paid to Employeethrough the date of Disability, and any amounts owed for Reimbursable Expenses that Employee incursthrough such date and any previously awarded but unpaid bonuses will be paid as promptly aspracticable following such date. In such event of Employee’s Disability, Employer will alsocontinue to pay Employee the Base Salary in effect at the time of such Disability for a period of 6months following the date of Disability. All Benefits will, unless otherwise expressly set forthon Exhibit A, otherwise provided by Employer policy applicable to its employees generally,or otherwise required by law, terminate on the date of termination. In the event of Employee’sDisability, the stock option described above in Section 4.3(b) shall fully vest and becomeexercisable by Employee for a period of no more than six (6) months following Employee’s date ofDisability and the restrictions shall immediately lapse with respect to the restricted stock grantdescribed in Section 4.3(c) above. “***Disability***” means that the (i) Employee is unable toengage in any substantial gainful activity by reason of any medically determinable physical ormental impairment that can be expected to result in death or can be expected to last for acontinuous period of not less than 12 months; (ii) Employee is, by reason of any medicallydeterminable physical or mental impairment that can be expected to result in death or can beexpected to last for a continuous period of not less than 12 months, receiving income replacementbenefits for a period of not less than three months under an accident and health plan coveringemployee’s of Employer; (iii) Employee is determined to be totally disabled by the Social SecurityAdministration; or (iv) Employee is determined to be disabled in accordance with the disabilityinsurance program under which the Employer has provided disability insurance to the Employee,provided that the definition of disability applied under such disability insurance program complieswith the requirements of Treasury Regulation Section 1.409A-3(i)(4). If a disagreement arisesbetween Employee and Employer as to whether Employee is suffering from Disability, such issue willbe determined by a physician designated by Employer. Nothing in this Paragraph relieves theEmployer of any of its obligations of reasonable accommodation under the Americans withDisabilities Act.     **5.3 Termination by Employer With Cause**. Employer will be entitled to terminate Employee’semployment at any time for Cause. The Base Salary will continue to be paid to Employee through thedate of termination, and any amounts owed for Reimbursable Expenses that Employee incurs throughsuch date will be paid to Employee following termination, subject to Employer’s right to offsetagainst such sum the amount of any damages which Employer may suffer as a result of the actions ofEmployee constituting Cause. All Benefits will, unless
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otherwise required by law, terminate on the date of termination. “***Cause***” will constitute anyone of the following:     (a) Employee’s continued failure to perform substantially Employee’s duties andresponsibilities (other than a failure resulting from a Disability), provided that theEmployer has previously addressed these failures with Employee and has given Employee areasonable opportunity to cure;     (b) Employee engaging in willful, reckless, or grossly negligent misconduct that ismaterially injurious to Employer, monetarily or otherwise;     (c) Employee’s conviction of, plea of guilty or nolo contender to, or the issuance ofan indictment or an information by a grand jury or prosecutor, as applicable, for, a felonyor a crime involving moral turpitude;     (d) Employee commits an act of fraud, misappropriation, or personal dishonesty (that isnot de minimus); and     (e) Employee commits a breach of this Agreement and fails to cure such breach withinthirty (30) days from the date that Employer gives notice thereof to Employee identifyingthe provision of this Agreement that Employer has determined has been breached.     **5.4 Termination by Employer Without Cause**. Employer may at any time terminate Employee’semployment without Cause. In such event, the Base Salary will continue to be paid through such thedate of termination, and any amounts owed for Reimbursable Expenses that Employee incurs throughsuch date and any previously awarded but unpaid bonus will be paid to Employee promptly followingtermination. Employer will also continue to pay Employee, as severance, the Base Salary for theremaining Employment Term in substantially equal installments in accordance with Employer’s regularpayroll practices, as in effect from time to time, and subject to all appropriate withholdings.All Benefits will, unless otherwise expressly set forth on Exhibit A or provided byEmployer policy applicable to its employees generally or otherwise required by law, terminate onthe date of termination. In the event that the Employee is involuntarily terminated without Cause,the stock option described above in Section 4.3(b) shall remain exercisable by Employee fora period of no more than twelve (12) months following the date of termination to the extent suchoption was vested and exercisable as of the date of termination.     **5.5 Resignation for Good Reason**. Employee may terminate this Agreement for Good Reason (asdefined below) by giving written notice of such termination, which termination will becomeeffective on the thirtieth (30th) day following receipt by the Employer. As used in thisAgreement, “***Good Reason***” shall mean any one of the following: (i) a material reduction inEmployee’s Base Salary and/or a material failure to provide the benefits required in Section4; (ii) any other action or inaction that constitutes a material breach by the Employer of thisAgreement; (iii) a material diminution in Employee’s authority, duties or responsibilities suchthat they are materially inconsistent with his position as Chief Operating Officer of the Employer;(iv) relocation of the Employer’s headquarters to a location more than thirty (30) miles from 1800W. Katella Avenue in Orange, California; and (v) in the event of a Change in Control (as definedbelow), failure of the successor to the Employer or to the Employer’s business (A) to offerEmployee the position of President and Chief Operating Officer of the successor company, reportingonly to the board of directors and/or the chief executive officer of the successor to the
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Employer, with duties, responsibilities, compensation and benefits materially similar to thoseenjoyed by Employee immediately preceding the Change in Control, or (B) to assume the obligationsof the Employer under and to become a party to this Agreement, provided that no termination forGood Reason shall be effective until Employee has given the Employer written notice (pursuant toSection 8(g) below) within sixty (60) days of the initial occurrence of any of theforegoing specifying the event or condition constituting the Good Reason and the specificreasonable cure requested by Employee, the Employer has failed to cure the occurrence within thirty(30) days of receiving written notice from Employee, and Employee resigns within six (6) monthsfollowing the initial occurrence. In the event of a termination for Good Reason, the Base Salarywill continue to be paid through such the date of termination, and any amounts owed forReimbursable Expenses that Employee incurs through such date and any previously awarded but unpaidbonus will be paid to Employee promptly following termination. Employer will also continue to payEmployee, as severance, the Base Salary for the remaining Employment Term in substantially equalinstallments in accordance with Employer’s regular payroll practices, as in effect from time totime, and subject to all appropriate withholdings. All Benefits will, unless otherwise expresslyset forth on Exhibit A or provided by Employer policy applicable to its employees generallyor otherwise required by law, terminate on the date of termination. In the event that the Employeeterminates this Agreement for Good Reason, the stock option described above in Section4.3(b) shall remain exercisable by Employee for a period of no more than twelve (12) monthsfollowing the date of termination to the extent such option was vested and exercisable as of thedate of termination.     As used in this Agreement, a “***Change in Control***” shall mean any of the following events:     (1) the acquisition by any Group or Person (as such terms are defined in Section 13(d)or 14(d) of the Securities Exchange Act of 1934, as amended (the “***1934 Act***”)), other than(A) a trustee or other fiduciary holding securities of the Employer under an employeebenefit plan of the Employer, (B) an entity in which the Employer directly or indirectlybeneficially owns fifty percent (50%) or more of the voting securities of such entity (an“***Affiliate***”), or (C) Frank Greinke or an affiliate of Frank Greinke, of any securities ofthe Employer, immediately after which such Group or Person has beneficial ownership (withinthe meaning of Rule 13d-3 promulgated under the 1934 Act) of more than fifty percent (50%)of (X) the outstanding shares of Common Stock or (Y) the combined voting power of theEmployer’s then outstanding securities entitled to vote generally in the election ofdirectors;     (2) the Employer (and/or its subsidiaries) is a party to a merger or consolidation witha Person, or series or related transactions, with a Person other than an Affiliate, whichresults in the holders of voting securities of the Employer outstanding immediately beforesuch merger or consolidation failing to continue to represent (either by remainingoutstanding or being converted into voting securities of the surviving entity) more thanfifty percent (50%) of the combined voting power of the then outstanding voting securitiesof the corporation resulting from such merger or consolidation; or     (3) all or substantially all of the assets of the Employer and its subsidiaries are, inany transaction or series of transactions, sold or otherwise disposed of (or consummation ofany transaction, or series of related transactions, having similar effect , other than to anAffiliate;
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     provided, however, that in no event shall a “Change in Control” be deemed to have occurredfor purposes of this Agreement solely because the Employer engages in an internalreorganization, which may include a transfer of assets to, or a merger or consolidationwith, one or more Affiliates.     **5.6 Voluntary Resignation without Good Reason**. In the event that Employee resigns withoutGood Reason as defined above in Section 5.5, Employee will be entitled only to the BaseSalary to be paid to Employee through the date of termination, and any amounts owed forReimbursable Expenses that Employee incurs through such date. The Employer will have no furtherobligation to pay any compensation of any kind (including without limitation any bonus or portionof a bonus that otherwise may have become due and payable to Employee with respect to the year inwhich such termination date occurs), or severance payments of any kind.     **5.7 Effect of Termination**. Except as expressly provided in this Section 5 and exceptfor the obligations set forth in Sections 6 and 7, all further obligations of theParties under this Agreement will terminate upon termination of Employee’s employment withEmployer.     **6. Restrictive Covenants**. Employee hereby acknowledges that, as a result of Employee’semployment by Employer hereunder, Employee will receive special training and education with respectto the operations of Employer’s and/or Employer’s affiliates’ businesses and other related matters,and will obtain access to such persons’ confidential information and business and professionalcontacts. In consideration of such special and unique opportunities afforded by Employer and itsaffiliates to Employee as a result of Employee’s employment, the Employee hereby agrees thatEmployee will not:     **6.1**From the Commencement Date until one year after Employer no longer employs Employee (thedate on which such person no longer employs Employee is hereinafter referred to as the *“****EmploymentTermination Date****”*), directly or indirectly, alone or as a partner, joint venturer, officer,director, member, employee, consultant, agent, independent contractor, or equity interest holderof, or lender to, any person or business, engage in the business of distributing gasoline, diesel,propane or lubricant products in any state of the United States where the Employer or itssubsidiaries or affiliates do business as of the Employment Termination Date, other than of, by orthrough SC Fuels or any other business owned or operated by Frank P. Greinke or his family membersor heirs by will or intestate succession.     **6.2**From the Commencement Date until one year after the Employment Termination Date, directlyor indirectly (i) induce any person that is a customer of Employer to enter into any contract withor otherwise patronize any business directly or indirectly in competition with the Employer; (ii)request or advise any person who is a customer or vendor of Employer to withdraw, curtail, orcancel any such customer’s or vendor’s business with Employer.     **6.3**From the Commencement Date until six months after the Employment Termination Date,directly or indirectly employ, or knowingly permit any affiliate of Employee to employ, any personwhom Employer employed within the prior six month period.     **6.4**From the Commencement Date until one year after the Employment Termination Date, directlyor indirectly (i) solicit for employment or other similar relationship with Employee, any ofEmployee’s affiliates or any other person, any employee of Employer or any person who was anemployee of Employer within the six month period immediately preceding such solicitation ofemployment, other than such person (A) whose employment was terminated by the applicable person, or(B) who independently responded to a general solicitation for
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employment by Employee or Employee’s affiliate; or (ii) induce, or attempt to induce, anyemployee of Employer to terminate such employee’s employment relationship with such person.     **6.5**Employee will not use for Employee’s personal benefit, disclose, communicate, divulge to,or use for the direct or indirect benefit of any person other than Employer any of Employer’sConfidential Information. This Section 6.5 will apply during and after the period whenEmployee is an employee of Employer and will be in addition to (and not a limitation of) anylegally applicable protections of Employer’s interest in confidential information, trade secretsand the like. “***Confidential Information***” includes (a) any information concerning the businesses andaffairs of the Employer or its subsidiaries or affiliates transferred or transmitted in writing,orally, visually, electronically or by any other means, whether prior to, on or after the datehereof, (b) information provided to you by third parties under circumstances where you have anobligation not to disclose that information, and (c) any memoranda, reports, analyses, extracts ornotes you produce that are based on, reflect or contain any of the Confidential Information.Confidential Information does not include any information that is or becomes generally available tothe public other than as a result of a disclosure by you in violation of this Agreement.     **6.6**Any and all writings, inventions, improvements, processes, procedures advances,discoveries, works of authorship, and/or techniques (“***Developments***”) that Employee may make,conceive, discover, or develop, whether or not patentable, copyrightable, or protectable under maskworks legislation or trademark laws, either solely or jointly with any other person, at any timeduring Employee’s employment with the Employer, whether or not during working hours and whether ornot at the request or upon the suggestion of Employer that relate to or are useful in connectionwith any business now or hereafter carried on or contemplated by Employer, including developmentsor expansions of its present fields of operations, will be Employer’s sole and exclusive property.Employee hereby assigns to Employer and/or Employer’s nominees all of Employee’s right, title, andinterest in any Developments, and hereby irrevocably designates and appoints Employer and each ofEmployer’s duly authorized officers and agents as Employee’s agent and attorney-in-fact to act forand in Employee’s behalf and stead to execute and file any document and to do all other lawfullypermitted acts to further the prosecution, issuance, and enforcement of Developments. Employeewill make full disclosure to Employer of all such Developments and will do everything necessary ordesirable to vest the absolute title thereto in Employer. Employee will write and prepare allspecifications and procedures regarding such Developments and otherwise aid and assist Employer,any Acquired Entity, or any of their affiliates so that Employer, such Acquired Entity, or suchaffiliate, as the case may be, can prepare and present applications for copyright, letters patenttherefor and can secure such copyright, letters patent, mask works, or trademark registrations,wherever possible, as well as reissues, renewals, and extensions thereof, and can obtain the recordtitle to such copyright, letters patent, mask works, or trademark registrations so that Employerand/or its nominees will be the sole and absolute owner(s) thereof in all countries in which it maydesire to have copyright, patent, mask work, or trademark protection. Employee will not beentitled to any additional or special compensation or reimbursement regarding any and all suchDevelopments.     **6.7**Notwithstanding the foregoing, the beneficial ownership of less than 1% of the equityinterests of any person having a class of equity interests actively traded on a national securitiesexchange or over-the-counter market will not be deemed, in and of itself, to breach theprohibitions of this Section 6. Employee agrees and acknowledges that the restrictions inthis Section 6 are reasonable in scope and duration and are necessary to protect Employer.If any provision of this Section 6, as applied to either Party or to any circumstance, isadjudged by
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a governmental body, arbitrator, or mediator not to be enforceable in accordance with itsterms, the same will in no way affect any other circumstance or the enforceability of the remainderof this Agreement. If any such provision, or any part thereof, is held not to be enforceable inaccordance with its terms because of the duration of such provision, the area covered thereby, orthe scope of the activities covered, the Parties agree that the governmental body, arbitrator, ormediator making such determination will have the power to reduce the duration, area, and/or scopeof activities of such provision, and/or to delete specific words or phrases, and in its reducedform such provision will then be enforceable in accordance with its terms and will be enforced.The Parties agree and acknowledge that the breach of any provision of this Section 6 willcause irreparable damage to Employer and upon breach of any provision of this Section 6,Employer will be entitled to injunctive relief, specific performance, or other equitable reliefwithout bond or other security; provided, however, that the foregoing remedies will in no way limitany other remedies that Employer may have. Employer may, without notifying Employee, notify anysubsequent employer of Employee of Employee’s rights and obligations under this Section 6.     **7. Conflicts of Interest**.     **7.1**Employee represents to Employer as follows: (a) there are no restrictions, agreements, orunderstandings, oral or written, to which Employee is a party or by which Employee is bound thatprevent or make unlawful Employee’s execution or performance of this Agreement, and (b) Employeedoes not have any business or other relationship that creates a conflict between the interests ofEmployee and Employer.     **7.2**Employee recognizes and agrees that Employee owes Employer and its affiliates a fiduciaryduty of loyalty, fidelity, and allegiance to act at all times in the best interests of Employer andits affiliates and to do no act which might injure the business, interests, or reputation ofEmployer or any of its affiliates. Employee’s duty of loyalty will extend throughout theEmployment Term. In keeping with Employee’s fiduciary duty to Employer and its affiliates,Employee agrees that, during the Employment Term, Employee will not knowingly become involved in aconflict between his personal interests and those of Employer or any of its affiliates, and, upondiscovery thereof, will not willfully allow such conflict of interest to continue. Notwithstandingthe foregoing, Employer acknowledges that Employee may have ownership interests in, may takecertain actions on behalf of, or accept payments, services or loans from, SC Fuels or otherbusinesses owned or operated by Frank P. Greinke or his family members or heirs by will orintestate succession and Employer shall not require Employee to discontinue such relationships;*provided*, *however*, that all such ownership interests, actions, payments, services or loans aredisclosed in writing to the Employer in accordance with the Employer’s Code of Business Conduct andEthics. Employee agrees to disclose in writing to Employer any facts that could reasonably beexpected to involve a material conflict of interest upon Employee’s conscious awareness that such amaterial conflict could exist. Employee recognizes that it is impossible to provide an exhaustivelist of actions or activities that constitute or might constitute a conflict of interest, butrecognizes that these actions or activities may include the following:     (a) ownership of more than a 1% interest in any supplier, contractor, customer, orother person that does business with Employer or any of its affiliates;     (b) acting in any capacity, including as a director, officer, employee, partner,consultant, or agent, for any supplier, contractor, customer, or other person that doesbusiness with Employer or any of its affiliates;
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     (c) acceptance, directly or indirectly, of payments, services, or loans (other thanentertainment, gifts, or other sales incentives that may be furnished in the ordinary courseof business) from a supplier, contractor, customer, or other person that does business withEmployer or any of its affiliates;     (d) misuse or disclosure of information of any kind obtained through Employee’srelationship with Employer; and     (e) appropriation by Employee or diversion to any other person, directly or indirectly,of any business opportunity in which it is known or could reasonably be anticipated thatEmployer or its affiliates would be interested.In further recognition of the fiduciary duties Employee owes to Employer and its affiliates,Employee agrees that all documentation that Employee provides to Employer will be accurate in allmaterial respects, when taken as a whole and in light of the circumstances in which it was made.     **8. Miscellaneous**.     **8.1 Entire Agreement**. This Agreement constitutes the entire agreement and understanding ofthe Parties in respect of its subject matter and supersedes all prior understandings, agreements,or representations by or among the Parties, written or oral, to the extent they relate in any wayto the subject matter hereof. Except for Employer’s affiliates, each of which will be deemed athird party beneficiary of all obligations of Employee under this Agreement, there are no thirdparty beneficiaries having rights under or with respect to this Agreement.     **8.2 Successors**. All of the terms, agreements, covenants, representations, warranties, andconditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by,the Parties and their respective successors.     **8.3 Assignment**. No Party may assign either this Agreement or any of its rights, interests, orobligations hereunder without the prior written approval of Employer and Employee; provided,however, that Employer may (a) assign any or all of its rights and interests hereunder to one ormore of its affiliates and (b) designate one or more of its affiliates to perform its obligationshereunder (in any or all of which cases Employer nonetheless will remain responsible for theperformance of all of its obligations hereunder).     **8.4 Notices**. All notices, requests, demands, claims and other communications hereunder willbe in writing. Any notice, request, demand, claim or other communication hereunder will be deemedduly given if (and then three business days after) it is sent by registered or certified mail,return receipt requested, postage prepaid, and addressed to the intended recipient as set forthbelow:If to Employer:Attn: Corporate Secretary