EMPLOYMENT AGREEMENT
This Agreement is made this 1st day of July, 1996, among XXXX XXXXXXX,
XXXXXXX OIL, INC., SUPERPUMPER,INC.,and SPF, INC., hereinafter referred to as
Farstad, Xxxxxxx Oil, Superpumper, and SPF, respectively. Xxxxxxx Oil,
Superpumper, and SPF are herein sometimes referred to collectively as Employers.
RECITALS
SPF has recently acquired all of the outstanding shares of Xxxxxxx Oil
common stock and a substantial majority of Superpumper common stock in an
exchange of Xxxxxxx Oil and Superpumper shares for SPF shares. Before SPF
acquired a majority of capital stock in Xxxxxxx Oil, Xxxxxxx was a principal
executive employee of Xxxxxxx Oil. The parties desire his continued employment,
including provisions for his employment in the management of Superpumper.
AGREEMENT
EMPLOYMENT AGREEMENT
1. EMPLOYMENT. Employers hereby employ Xxxxxxx and he accepts such
employment upon the terms and conditions 1`I herein set forth.
2. TERM. The term of employment shall begin on the date set forth above and
shall continue until terminated a herein provided.
3. DUTIES. Xxxxxxx is employed to actively participate in the management of
the Xxxxxxx Oil and Superpumper business operations. He will devote his full
time and best efforts to the performance of duties as assigned by the respective
boards of directors of Xxxxxxx Oil, Superpumper, and SPF.
4. COMPENSATION. For all services rendered by Xxxxxxx under this Agreement,
he shall be paid as follows:
A. BASIC COMPENSATION. Xxxxxxx shall be paid as basic compensation the sum
of $275,000.00 per year, payable in monthly installments.
B. ANNUAL INCREASE. Xxxxxxx'x basic compensation shall be increased each
year during the term of this contract, by an amount equal to 5% of the
preceding year's basic compensation.
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EXAMPLE
1997 compensation will be $288,750.
(1.05 x $275,000 19-q compensation)
1998 compensation will be $303,188.
(1.05 x $288,750 1997 compensation)
1999 compensation will be $318,347.
(1.05 x $288,750 1998 compensation)
C. ADDITIONAL COMPENSATION. Compensation in addition to basic
compensation and annual increases may be paid in such amounts and at such times
as the respective boards of directors of Xxxxxxx Oil, Superpumper, or SPF may
from time to time determine, provided: Xxxxxxx may be paid compensation
exceeding basic compensation and annual increases under paragraphs 4A and 4B
with respect to any fiscal year only if the year's consolidated income of the
Employers exceeds 20% of equity (determined in accordance 10 with generally
accepted accounting principles) and after accounting for any additional
compensation as an expense for the year.
EXAMPLE:
In 2002, the consolidated equity of Employers is I $7.5 million.
Accordingly, additional compensation may be paid to Xxxxxxx only if 14
consolidated income of Employers exceeds $1.5 million (before any
additional compensation). If consolidated income for the year were
$1.6 million, Employers may determine additional compensation to be
paid to Xxxxxxx, but the sum of additional compensation and direct
overhead such as employment taxes may not exceed $100,000 ($1.6
million income before additional bonus, less $1.5 million minimum
income as 20% return on equity).
D. FRINGE BENEFITS. Xxxxxxx shall participate in any "fringe
benefits," including but not limited to retirement plans, health insurance
plans, sick leave or vacation leave, as may from time to time be adopted by
Employers.
E. LOAN GUARANTEES. The parties acknowledge Xxxxxxx'x position as
majority shareholder in SPF may cause certain of 23 Employers' creditors to
request him to personally guarantee Employers' financial obligations. The
parties acknowledge that any guarantees are valuable to the corporation, and may
be compensated as determined by the board of directors. The parties acknowledge
that any compensation paid to Xxxxxxx for personal guarantees is not
compensation for personal services under this employment agreement.
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5. WORKING FACILITIES. Employers will furnish Xxxxxxx with an office,
equipment, technical and secretarial assistance, and other facilities and
services suitable to his position and adequate for the performance of his
duties.Employers shall provide Xxxxxxx with a company car of similar quality and
upon the same terms and conditions as those prevailing during 1995.
6. EMPLOYEE EXPENSES. Employers shall reimburse Xxxxxxx for travel and
other expenses reasonably and necessarily.incurred in the performance of his
duties pursuant to this Agreement.
7. ADMINISTRATION. Employers will arrange for one of them to serve as
common paymaster to provide funds and administration of Xxxxxxx'x compensation
and benefits, and to allocate his compensation, benefits, and other expenses to
among Employers in the discretion of their respective boards of directors.
8. TERMINATION. Employers shall not terminate Xxxxxxx'x employment
except for serious misconduct or failure of performance of duties.
All rights and obligations under this Agreement will terminate without
notice on December 31, 2005.
Dated this 25th day of June, 1996.
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
XXXXXXX OIL, INC.
By /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Its President
SUPERPUMPER, INC.
By /s/ Xxxxxxxx Xxxxxxx
---------------------------
Xxxxxxxx Xxxxxxx
Its President
SPF, INC.
By /s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx
Its President
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