Document:

Exhibit
10.13

 

 

SUMMARY OF EXECUTIVE OFFICER COMPENSATION
ARRANGEMENTS

 

The following
is a summary of the current compensation arrangements between InfraSource
Services, Inc. (the “Company”) and its executive officers, with information
provided as of the March 2005 filing date of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2004 (the “Form 10-K Report”).

 

Cash
Compensation.  The Company’s cash compensation package for
its executive officers consists of two components:  (1) base salary; and (2) annual
performance-based bonuses.  The Company
also provides stock-based equity incentive grants to its executive officers as
an incentive to retain its executives and promote ownership in the Company.  Such equity-based grants are generally issued
under the Company’s 2004 Omnibus Stock Incentive Plan that is filed as Exhibit
10.6 to the Company’s Registration Statement on Form S-1, originally filed
January 30, 2004 and declared effective May 6, 2004 (the “Registration
Statement”).

 

The Company is
party to Management Agreements with each of its executive officers.  Each executive officer’s employment is
at-will, subject to the provisions of the applicable Management Agreement.

 

Base Salary:  Base salaries for executive officers are
established in the Management Agreements with the Company.  The current base salaries for the executive
officers are:

 

	
  Name

  	
   

  	
  Title(s)

  	
   

  	
  Agreement Date

  	
   

  	
  Base Salary as of

  March 15, 2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  David R. Helwig

  	
   

  	
  CEO and
  President

  	
   

  	
  September
  24, 2003

  	
   

  	
  $

  	
  437,600 

  	
  (1)

  
	
  Terence R. Montgomery

  	
   

  	
  SVP and CFO

  	
   

  	
  September
  24, 2003

  	
   

  	
  $

  	
  260,000

  	
   

  
	
  Henry E. Jackson(2)

  	
   

  	
  President,
  Dasheill Corporation and Dacon Corporation

  	
   

  	
  September
  24, 2003

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  Stephen Reiten

  	
   

  	
  President
  & COO, MJ Electric

  	
   

  	
  September
  24, 2003

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Paul M. Daily

  	
   

  	
  President
  & CEO, InfraSoure Underground Services, Inc.

  	
   

  	
  September
  24, 2003

  	
   

  	
  $

  	
  240,000

  	
   

  
	
  R. Barry Sauder

  	
   

  	
  VP,
  Corporate Controller and Chief Accounting Officer

  	
   

  	
  April 6,
  2004

  	
   

  	
  $

  	
  180,250

  	
   

  

 

(1)           Mr. Helwig’s salary is
effective as of April 1, 2005.

(2)           Mr. Jackson retired
from the Company effective January 3, 2005.

 

Under the
Management Agreements, the base salaries are reviewed annually by the Board, or
any duly authorized committee of the Board, in its sole discretion.  For Messrs. Helwig, Montgomery, Reiten and
Daily, such discretion is limited by the Management Agreement to the authority
to increase (but not decrease) the 

 

 

base
salary paid.  Annual increases, if any,
generally occur by March 15, 2005 of each year.

 

Bonus Compensation:  Each executive officer is eligible to
participate in the Annual Incentive Compensation Program (“AICP”) of the
Company.  The AICP establishes corporate
goals and individual operating unit goals. 
Potential bonus opportunity is based principally upon sharing in the
profitability, cash flow, economic value added or related financial performance
parameters.  Each executive officer’s
goals are established specifically, depending upon his role with the
Company.  For example, executive officers
that are in charge of operating units may have more of their potential bonus
compensation tied to such unit’s performance, while the “corporate” level
executive officers potential bonus compensation is tied to corporate
performance measures.

 

The principal
AICP measures are net income (at the corporate and operating unit levels) and
EBIT (earnings before income tax), 
related measures, with Days Sales Outstanding (gross accounts receivable
minus accounts receivable older than designated periods and other deductions)
and safety related indicators as potential downward modifiers.  Net income must meet a designated threshold
(determined for each year) before any bonus pool is funded by the Company.  Specific individual operating unit measures
may also be established each year.  Once
threshold funding is achieved, the Board of Directors (or duly authorized
committee of the Board) does have discretion to consider unusual items that
impact the performance measures.  The
AICP goals and performance measures for 2005 will likely be substantially
similar to those used in 2004, subject to the discretion of the Board of
Directors, or a duly authorized committee of the Board.

 

In addition to
the potential bonus compensation under the AICP, Messrs. Helwig, Montgomery,
Reiten and Daily are eligible for signing bonuses under their respective
Management Agreements.  Such signing
bonuses relate to the merger transaction, which occurred September 24, 2003 in
which the Company acquired InfraSource Incorporated and certain of its subsidiaries
from Exelon Enterprises Company, LLC (the “Merger”).  Seventy-five percent of the signing bonuses
to be paid to the eligible executives were paid, in cash or in shares of common
stock, on September 24, 2003 and the remaining twenty-five percent will be paid
if the executive officer is employed by the Company on September 23, 2005.  The amount of the signing
bonuses are:

 

	
  Name

  	
   

  	
  Signing Bonus

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  David R. Helwig

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Terence R. Montgomery

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  Stephen J. Reiten

  	
   

  	
  $

  	
  165,000

  	
   

  
	
  Paul M. Daily

  	
   

  	
  $

  	
  150,000

  	
   

  

 

Equity-Based
Compensation.  Executive officers are eligible to receive
grants and awards under the Company’s 2004 Omnibus Stock Incentive Plan, and to
participate 

 

 

in
the Company’s 2004 Employee Stock Purchase Plan, which are filed as Exhibits
10.6 and 10.7 to the Company’s Registration Statement.

 

Deferred
Compensation Plan.  Each executive officer is eligible to
participate in the Company’s Deferred Compensation Plan, which is filed as
Exhibit 10.8 to the Company’s Registration Statement.Exhibit 10.52

 

Macadamia Nut Purchase Agreement

Hamakua Macadamia Nut Company, Inc. & ML Macadamia Orchards, L. P.

Calendar Years 2007 through 2012

 

This
Macadamia Nut Purchase Agreement is entered into on the date set forth below by
and between Hamakua Macadamia Nut Company, Inc., a Hawaii Corporation (“HMNC”)
and ML Macadamia Orchards, L.P. (“MLP”).

 

Whereas,
HMNC is experienced and capable in all aspects of the business of processing
and marketing macadamia nuts;

 

Whereas,
MLP is the legal and beneficial owner of macadamia nut crop produced in certain
macadamia nut orchards in Hawaii;

 

Whereas,
HMNC desires to purchase wet-in-shell (“WIS”) macadamia nuts from MLP as
provided herein;

 

Now,
therefore, in consideration of the promises and mutual covenants and agreements
set forth herein, the parties agree as follows:

 

1.  Term. 
This Agreement shall be deemed to have commenced for all purposes as of
January 1, 2007 and shall continue in full force and effect until December 31,
2012, unless terminated earlier as provided herein.

 

2.  Delivery.  MLP shall harvest macadamia nuts and fill
containers suitable for transport as mutually agreed upon, and arrange for
pickup or delivery of wet-in-husk (“WIH”) nuts from MLP’s orchards or WIS nuts
from a designated husking station. MLP may, at its option, husk and/or deliver
nuts prior to delivery to HMNC. If MLP husks or delivers nuts, MLP will be
entitled to husking and/or delivery bonus outlined in section 7. Ownership of
the nut crop will transfer from Seller to HMNC upon pickup by HMNC or delivery
by MLP to HMNC.

 

3.
Purchase and Sale.  MLP agrees to
sell and HMNC agrees to purchase approximately 6 million pounds (between 5.8
and 6.2 million) of WIS macadamia nuts annually from various MLP orchards. The
6 million pounds shall be divided into three equal segments of approximately 2
million pounds each. The nut purchase price for Segment I (2 million pounds)
under this contract shall be renegotiated on or before December 31, 2008 for
the remaining four years of the contract. The nut purchase price for Segment II
(2 million pounds) shall be renegotiated on or before December 31, 2010 for the
remaining two years of the contract. If the Parties are unable to negotiate a
mutually agreeable price relative to Segment I or II, the production from that
segment may be withdrawn from the contract and sold by MLP to other parties.

 

4.  Blended Index Crop Price.  A Blended Index Crop Price (“BICP”) per pound
shall be calculated each year for all pounds delivered (adjusted to 20% moisture
and 30% SK/DIS recovery). The BICP shall be based 60% on Hamakua’s weighted
average bulk nut price for the preceding crop year (July-June) and 40% on a
fixed component of 85 cents per pound as outlined in Exhibit A. The initial
BICP shall be determined based on HMNC’s average bulk nut price for the
2006-2007 crop year (July 1, 2006 – June 30, 2007) and shall apply to all
deliveries in 2007. The BICP shall apply to all deliveries from all segments
until their respective renegotiation dates.

 

5.
Minimum and Maximum BICP Guidelines The Parties agree that the BICP for
any year shall not be less than 75 cents per pound and shall be no more than 95
cents per pound (adjusted to 20% moisture and

 

1

 

30%
SK/DIS recovery). The Parties further agree that any change in the BICP shall
be limited to +/- 7 cents annually.

 

6. Spot Price Adjustment
Not withstanding the foregoing, if HMNC pays a weighted average spot price
higher than the MLP contract price during any calendar year, MLP will receive
an additional nut price adjustment equal to 50% of the difference between the
weighted average spot price and the prevailing contract price. This provision
does not affect the index calculations. Any additional payment shall be calculated
and paid by HMNC no later than January 31st of the succeeding year.

 

Any
spot prices negotiated between MLP and HMNC for deliveries above contract
volumes will not be included in the calculation of the Spot Price Adjustment
above.

 

7.
Husking and Delivery Bonuses - There shall be no charges for hauling or
husking by HMNC. HMNC will pay a Hauling Bonus of $.02 per pound WIS (adjusted
to 20% moisture and 30% SK/DIS recovery) for WIS nuts husked by MLP and a
hauling bonus of $.02 per pound WIS (adjusted to 20% moisture and 30% SK/DIS
recovery) for nuts delivered to HMNC by MLP.

 

8.
Payment Terms.  Payments shall be
made within 30 days of the date of delivery.

 

9.  PACA Lien – HMNC acknowledges that WIS
macadamias are a perishable agricultural commodity. HMNC further concedes that
all receivables related to deliveries of WIS or WIH nuts are subject to and
secured by the provisions of the Perishable Agricultural Commodities Act of
1930.

 

10.  Sampling.  HMNC and MLP shall agree on such methods and
procedures as may be appropriate to enable HMNC to determine the gross
wet-in-shell weight, the moisture content and the kernel recovery of the
macadamia nuts delivered to it by MLP with as much accuracy as is reasonably
practicable.  The procedures to be used
in sampling for moisture, kernel recovery and percentage of husked WIS nuts
included in WIH nut loads and in calculating the payment to MLP are set forth
in Exhibit B. Any deviations from the sampling procedure shall be by mutual
agreement only.

 

11.  Accounting and Reports.  HMNC shall keep full and accurate records and
accounts showing, among other things, dates of delivery and weights of nuts
from the orchards, all wet-in-husk weights measured, and all other information
that may be necessary or desirable in order to calculate and verify payments to
MLP under this Agreement.

Along with each payment for deliveries,
HMNC will provide a written report to MLP describing the shipment delivery
weight (WIH or WIS), the quality analysis results, and the calculations that
determine payment.

 

HMNC
agrees to provide a report, prepared and certified by an independent
accountant, by August 15 of each calendar year, detailing the BICP to be used
for payment of deliveries in that calendar year. HMNC also agrees to provide a report,
prepared and certified by an independent accountant, within 45 days from the
end of each calendar year, detailing the weighted average WIS price paid by
HMNC to independent growers for the preceding year. MLP shall have 90 days from
receipt of each report to object or investigate.

 

MLP
shall be entitled to observe the sampling process upon reasonable notice and
shall be entitled to any information necessary or desirable to verify the
accuracy of the nut price or payment. To the extent that information is shared
between the parties hereunder and is not otherwise in the public domain, both
parties agree to keep such information confidential except as may be required
by law or in connection with any litigation between the parties.

 

2

 

12. 
Termination.  The parties
may terminate this Agreement at any time by mutual agreement in writing.  In the event that any party shall be in
default (as defined below), the non-defaulting party may terminate this
Agreement at any time by delivering written notice of such termination to the
defaulting party.

 

A party
shall be in “default” under this Agreement in the event that (i) it files any
voluntary proceeding for dissolution or under any federal or state bankruptcy,
insolvency, receivership or similar law; (ii) any such proceeding is commenced
against it involuntarily and is not dismissed within 60 days; (iii) it makes
any composition with or assignment for the benefit of its creditors; (iv) it
enters into any corporate reorganization or acquisition without making adequate
provision for the performance of its obligations under this Agreement; (v) it
fails to perform any of its obligations when due under this Agreement and it
fails to correct such non-performance within 30 days after written demand for
performance is made by the other party; or (vi) it repeatedly fails to perform
its obligations under this Contract except after written demand for
performance.

 

13.  Notice.  For convenience of operation hereunder, each
of HMNC and MLP shall designate one representative to serve as the channel of
communication for delivering information to and securing necessary action by
its principals.  Any party may change its
representative from time-to-time by delivering written notice of such change to
the other party.  Until further notice is
given, each party’s representative shall be the person listed in the notice
address below.

 

Any and all
notices, demands, or other communications (collectively, “notice”) requiring or
desired to be given hereunder by either party shall be in writing and shall be
validly given or made to the other party or his authorized representative at
the address set forth below, if served either personally or if deposited in the
United States mails, certified or registered, postage prepaid, or if sent by
fax.

 

	
  HMNC:

  	
   

  	
  Hamakua Macadamia Nut Company, Inc.

  
	
   

  	
   

  	
  61-3251 Maluokalani Street

  
	
   

  	
   

  	
  P.O. Box 44715

  
	
   

  	
   

  	
  Kawaihae, Hawaii 96743

  
	
   

  	
   

  	
  Attention: President

  	
  Fax: (808) 882-8335

  
	
   

  	
   

  	
   

  
	
  MLP:

  	
   

  	
  ML Macadamia Orchards, L.P.

  
	
   

  	
   

  	
  26-238 Hawaii Belt Road

  
	
   

  	
   

  	
  Hilo, Hawaii 96720

  
	
   

  	
   

  	
  Attention: President

  	
  Fax: (808) 969-8152

  

 

If such
notice is delivered personally, service shall conclusively be deemed to have
been made at the time of such delivery. 
If such notice is given by mail, service shall conclusively be deemed to
have been made 72 hours after deposit thereof in the mail as provided for
above.  If such notice is given by fax,
service shall conclusively be deemed to have been made 24 hours after the
transmission thereof and receipt of the proper response code.  Any party may change its address for the
purpose of receiving notices as herein provided by a written notice given to
the other party.

 

14.  Force Majeure.  Neither of the parties hereto shall be liable
or accountable to the other party for any delay in complying or any failure to
comply with any of the terms, provisions or conditions of this Agreement in the
event that such failure shall have been caused by an act of God, strike,
lockout, public enemy, war, civil commotion, riot, condemnation, judicial or
governmental order or other requirements of law which directly prohibit the
performing by either party of the obligations hereunder (such as, but not
limited to, governmental regulations concerning the hazards of marketing or consumption
of macadamia nuts) or the refusal or failure of any governmental office or
officer to grant any permit or order necessary

 

3

 

for
compliance herewith by either party hereto, nor shall either of the parties
hereto be liable or accountable to the other party for any damages arising from
any such delay or failure.

 

15. Waiver.  The failure of either party to enforce its
rights upon any default on the part of the other party shall not be construed
as a waiver thereof, nor shall any custom or practice which may grow up between
the parties in the course of administering this Agreement be construed to waive
or to lessen the right of either party to demand performance by the other party
or exercise its rights in the event of default. 
No provision of, or default under this Agreement, may be waived except
by a notice in writing signed by the party making the waiver.  A waiver by either party of a particular
default shall not be deemed to be a waiver of any other subsequent default.

 

16. Assignment.  Neither of the parties hereto may assign any
of its rights or obligations under this Agreement without the prior written
consent of the other party.  No consent
or approval required under this Agreement shall be unreasonably withheld and no
charge for the giving of such consent or approval shall be made.

 

17. Entire
Agreement.  This Agreement represents
the entire agreement and understanding of the parties with respect to the
subject matter hereof.  The parties
specifically acknowledge and agree that no joint venture or lease is created
hereby and that neither party is hereby appointed as the agent of the other
party.

 

18. Governing
Law.  This Agreement will primarily
be performed in and shall be governed by and construed in accordance with the
laws of the State of Hawaii. Each of the parties consents to the jurisdiction
of the courts of the State of Hawaii or any federal court sitting in Hawaii and
agrees that Hawaii is an appropriate venue for any action that may be brought
under this Agreement.

 

 

IN WITNESS
WHEREOF, HMNC and MLP have caused this Macadamia Nut Purchasing
Agreement to be
executed and delivered by their duly authorized representatives on this 16th
day of December, 2004.

 

	
  HMNC:

  	
   

  	
  HAMAKUA
  MACADAMIA NUT COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Richard Schnitzler

  	
   

  
	
   

  	
   

  	
   

  	
  Richard
  Schnitzler

  
	
   

  	
   

  	
   

  	
  Its
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MLP:

  	
   

  	
  ML
  MACADAMIA ORCHARDS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Dennis J. Simonis

  	
   

  
	
   

  	
   

  	
   

  	
  Dennis J.
  Simonis

  
	
   

  	
   

  	
   

  	
  Its
  President

  

 

4

 

Exhibit A

 

Macadamia Nut Purchase Agreement

Hamakua Macadamia Nut Company, Inc. & ML
Macadamia Orchards, L.P.

Blended Index Crop Price (BICP) Based on Bulk Kernel Price

 

	
  Ave Bulk Kernel Price

  	
   

  	
  60% Component

  Crop Price

  	
   

  	
  40% Fixed Component

  Crop Price

  	
   

  	
  Blended Index

  Crop Price

  
	
  At least

  	
   

  	
  & less than

  	
   

  	
   

  	
   

  
	
  6.65

  	
   

  	
  & above

  	
   

  	
  1.01

  	
   

  	
  0.85

  	
   

  	
  0.95

  
	
  6.60

  	
   

  	
  6.65

  	
   

  	
  1.00

  	
   

  	
  0.85

  	
   

  	
  0.94

  
	
  6.55

  	
   

  	
  6.60

  	
   

  	
  0.99

  	
   

  	
  0.85

  	
   

  	
  0.93

  
	
  6.50

  	
   

  	
  6.55

  	
   

  	
  0.98

  	
   

  	
  0.85

  	
   

  	
  0.93

  
	
  6.45

  	
   

  	
  6.50

  	
   

  	
  0.98

  	
   

  	
  0.85

  	
   

  	
  0.93

  
	
  6.40

  	
   

  	
  6.45

  	
   

  	
  0.97

  	
   

  	
  0.85

  	
   

  	
  0.92

  
	
  6.35

  	
   

  	
  6.40

  	
   

  	
  0.96

  	
   

  	
  0.85

  	
   

  	
  0.92

  
	
  6.30

  	
   

  	
  6.35

  	
   

  	
  0.95

  	
   

  	
  0.85

  	
   

  	
  0.91

  
	
  6.25

  	
   

  	
  6.30

  	
   

  	
  0.94

  	
   

  	
  0.85

  	
   

  	
  0.90

  
	
  6.20

  	
   

  	
  6.25

  	
   

  	
  0.93

  	
   

  	
  0.85

  	
   

  	
  0.90

  
	
  6.15

  	
   

  	
  6.20

  	
   

  	
  0.92

  	
   

  	
  0.85

  	
   

  	
  0.89

  
	
  6.10

  	
   

  	
  6.15

  	
   

  	
  0.91

  	
   

  	
  0.85

  	
   

  	
  0.89

  
	
  6.05

  	
   

  	
  6.10

  	
   

  	
  0.90

  	
   

  	
  0.85

  	
   

  	
  0.88

  
	
  6.00

  	
   

  	
  6.05

  	
   

  	
  0.89

  	
   

  	
  0.85

  	
   

  	
  0.87

  
	
  5.95

  	
   

  	
  6.00

  	
   

  	
  0.88

  	
   

  	
  0.85

  	
   

  	
  0.87

  
	
  5.90

  	
   

  	
  5.95

  	
   

  	
  0.87

  	
   

  	
  0.85

  	
   

  	
  0.86

  
	
  5.85

  	
   

  	
  5.90

  	
   

  	
  0.86

  	
   

  	
  0.85

  	
   

  	
  0.86

  
	
  5.80

  	
   

  	
  5.85

  	
   

  	
  0.85

  	
   

  	
  0.85

  	
   

  	
  0.85

  
	
  5.75

  	
   

  	
  5.80

  	
   

  	
  0.84

  	
   

  	
  0.85

  	
   

  	
  0.84

  
	
  5.70

  	
   

  	
  5.75

  	
   

  	
  0.83

  	
   

  	
  0.85

  	
   

  	
  0.84

  
	
  5.65

  	
   

  	
  5.70

  	
   

  	
  0.82

  	
   

  	
  0.85

  	
   

  	
  0.83

  
	
  5.60

  	
   

  	
  5.65

  	
   

  	
  0.81

  	
   

  	
  0.85

  	
   

  	
  0.83

  
	
  5.55

  	
   

  	
  5.60

  	
   

  	
  0.80

  	
   

  	
  0.85

  	
   

  	
  0.82

  
	
  5.50

  	
   

  	
  5.55

  	
   

  	
  0.79

  	
   

  	
  0.85

  	
   

  	
  0.81

  
	
  5.45

  	
   

  	
  5.50

  	
   

  	
  0.78

  	
   

  	
  0.85

  	
   

  	
  0.81

  
	
  5.40

  	
   

  	
  5.45

  	
   

  	
  0.77

  	
   

  	
  0.85

  	
   

  	
  0.80

  
	
  5.35

  	
   

  	
  5.40

  	
   

  	
  0.76

  	
   

  	
  0.85

  	
   

  	
  0.80

  
	
  5.30

  	
   

  	
  5.35

  	
   

  	
  0.75

  	
   

  	
  0.85

  	
   

  	
  0.79

  
	
  5.25

  	
   

  	
  5.30

  	
   

  	
  0.74

  	
   

  	
  0.85

  	
   

  	
  0.78

  
	
  5.20

  	
   

  	
  5.25

  	
   

  	
  0.73

  	
   

  	
  0.85

  	
   

  	
  0.78

  
	
  5.15

  	
   

  	
  5.20

  	
   

  	
  0.72

  	
   

  	
  0.85

  	
   

  	
  0.77

  
	
  5.10

  	
   

  	
  5.15

  	
   

  	
  0.71

  	
   

  	
  0.85

  	
   

  	
  0.77

  
	
  5.05

  	
   

  	
  5.10

  	
   

  	
  0.70

  	
   

  	
  0.85

  	
   

  	
  0.76

  
	
  Below

  	
   

  	
  5.05

  	
   

  	
  0.69

  	
   

  	
  0.85

  	
   

  	
  0.75

  

 

5

 

Exhibit B

 

Macadamia Nut Purchase Agreement

Hamakua Macadamia Nut Company, Inc. & ML
Macadamia Orchards, L.P.

Procedure for Sampling & Evaluating NIS Deliveries
/ Payment Calculations

 

1.  Upon receipt of a shipment,
weigh or verify certified weight ticket to determine the Gross Weight of the
wet-in-husk (“WIH”) or wet-in-shell (“WIS”) nuts delivered.  A shipment (“shipment”) shall mean one load
delivered on a single day.

 

2.  Obtain a sample, drawn
randomly from throughout the delivered shipment of mutually agreed upon
quantity of nuts.

 

3.  Weigh the sample and record
the weight.  For loads received WIH, husk
the sample and record the weight of the resulting sample of WIS nuts.  The ratio of WIS weight to the WIH weight of
the sample shall be applied to the Gross Weight determined in item 1 above to
determine the gross weight of the WIS nuts delivered for loads received WIH.
The gross weight of WIS nuts delivered as determined by the foregoing for WIH
loads or the weight determined in item 1 above for WIS loads is designated
herein as “W”.

 

4.  Split the sample into two
lots, one to determine moisture (“moisture sample”) and the other to determine
spoilage and kernel recovery (“quality sample”).

 

5.  Weigh the moisture sample and
record the weight.  Dry the sample at
approximately 175 degrees Fahrenheit for a period of 3 days.  Weigh the dried sample and record the weight
after drying.  Divide the difference in
weight prior to and after drying by the weight prior to drying.  The result is the percentage of moisture of
the WIS nuts designated herein as “M”.

 

6.  Weigh the quality sample and
record the weight.  Dry the sample at
approximately 110 degrees Fahrenheit for 7 days.  Record the dry-in-shell (“DIS”) weight.  The weight, in grams, of the DIS sample is
designated herein as “X”.

 

7.  Crack the DIS sample and
separate the shells from the kernels. 
Determine the weight of the recovered raw kernels.

 

8.  Inspect the raw kernels and
separate unsaleable kernels and record the weights of the following categories.

a)  Stinkbug damage (>3 spots)

b)  Other insect damage

c)  Mold

d)  Germination

e)  Bacterial damage

f)  Immature/Shrivels

g) Total a) through f)

 

Record the data and summarize for field management purposes.

 

9.  Using commercial criteria,
separate out the salable kernel and record the weight.  The weight, in grams, of salable kernel is
designated herein as “Y”.

 

6

 

10. Determine the Salable Kernel Recovery (SK/DIS) factor designated
herein as “KR”.

 

KR = Y/X

 

11. Determine spoilage percentages for each category of unusable as
follows:

 

For each category of unusable, divide the recorded category

weight by the total of unusable and usable kernel (8(g) plus Y).

 

12. Determine Payable Pounds for the load.

 

a)  Convert total load to WIS
weight at 20% moisture designated herein as             “WM”

 

WM =
W*(1-M)/(1-.2)

 

b)  Determine Payable Pounds for
the load designated herein as “P”

 

P = WM*(KR/.3)

 

13. Sample Calculation.

 

	
  WIS Delivered

  	
   

  	
  45,000

  	
   lbs

  
	
  Moisture (from sample)21.0%

  	
   

  	
   

  	
   

  
	
  Salable Kernel Recovery (from sample)

  	
   

  	
  30.5

  	
  %

  
	
  Price (e.g. 1st year volume price)

  	
   

  	
  $

  	
  .85

  	
   

  
	
  Delivery Bonus (if delivered)

  	
   

  	
  $

  	
  .02

  	
   

  
	
  Husking Bonus (if husked)

  	
   

  	
  $

  	
  .02

  	
   

  

 

	
  WM = 45,000 * (1-.21)/(1-.2) = 44,437 lbs
  WIS adjusted to 20% moisture

  	
   

  	
   

  
	
  P = 44,437 * 0.305/0.3 = 45,178 lbs WIS
  adjusted to 20% moisture &

  	
   

  	
  30%

  
	
  recovery (Contract Pounds)

  	
   

  	
   

  

 

	
  Payment =
  45,178 lbs * $.85

  	
  =

  	
   

  	
  $

  	
  38,401.30

  	
   

  
	
  Delivery Bonus
  (if delivered)

  	
  = 45,178 *
  $.02=

  	
   

  	
  $

  	
  903.56

  	
   

  
	
  Husking
  Bonus (if husked)

  	
  = 45,178 *
  $.02=

  	
   

  	
  $

  	
  903.56

  	
   

  

 

7

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