EXHIBIT 10.6
MEMORANDUM
TO: Johnny Edwards
FROM: Lyle Kuntz
DATE: October 2, 1995
SUBJECT: Compensation Memorandum
Regarding Employment as ERT Employee
STRICTLY CONFIDENTIAL
Dear Johnny:
You will serve in the capacity of Engineering Manager of ERT, evaluating
business opportunities and recommending acquisitions for ERT to the best of your
ability. You will keep the President fully informed on all key matters, obtain
prior approval from the President on any commitments to be made on behalf of ERT
and will at all times endeavor to implement the instructions and directions
given to you by the President.
You may terminate your employment at will. The President may terminate your
employment at any time without cause or explanation.
You will be compensated based on your selection of the following options:
Annual salary at the rate of $84,000, adjusted annually on May 1 based
on changes in the Consumer Price Index, paid twice monthly and.
a) In addition to your annual salary, a Discretionary
Bonus of up to 100% of the annual salary will be paid
based on the sole discretion of ERT's B.O.D.
Consideration will be given to, but not be limited
to, company performance, property enhancement,
acquisition evaluation volume
or
b) Profit Sharing based on ERT's financial
results, as described as follows:
Under the Profit Sharing option (b) above, you will earn a Profit Sharing amount
(in addition to your base salary) equal to 4% of the pre-tax net income of ERT
for the calendar year. When your Profit Sharing amount in any calendar year
reaches $200,000, a percentage of any Profit Sharing in excess of $200,000 will
be adjusted downward representing a sliding scale according to the following
schedule:
Johnny E. Edwards
Page - 2 -
September 26, 1995
<Table>
<Caption>
CALENDAR YEAR
PROFIT SHARING SET ASIDE*
------------------------------------- --------------------------------------
$200,000 - 300,000 10%
------------------------------------- --------------------------------------
300,000 - 400,000 30%
------------------------------------- --------------------------------------
400,000 and over 50%
------------------------------------- --------------------------------------
</Table>
* The "Set Aside" referenced above will be distributed
(at the discretion of ERT's Board of Directors) to
other ERT employees who are not entitled to Profit
Sharing.
Pre-tax net income, for purposes of this Agreement, will include all
revenues and all expenses incurred or accrued by ERT except for income
tax and any accruals for Profit Sharing. Depreciation, depletion and
amortization expenses will be computed in accordance with common oil
and gas industry and purchase accounting practice over the life of the
acquired reserves, as appropriate. These results will be accounted for
in accordance with Generally Accepted Accounting Principals (GAAP), as
determined by ERT's third party auditors.
Profit Sharing or Discretionary Bonus proceeds will be distributed to you within
four (4) weeks of finalizing ERT's year end audit, subject to any withholdings
determined by ERT's Board as a result of Auditor's notes to the financial
statements. Should your employment be terminated, you will be entitled to Profit
Sharing through your termination date.
You will be entitled to vacation and other benefits offered to Cal Dive
employees, in accordance with Cal Dive's written plans and policies as amended
from time to time.
If this memorandum represents the agreed compensation arrangement, please select
your bonus option; sign one copy and return it to me.
/s/ JOHNNY EDWARDS /s/ LYLE KUNTZ
- ------------------------------------- ------------------------------------
Johnny Edwards Lyle Kuntz, President
Energy Resource Technology, Inc. Energy Resource Technology, Inc.
Profit Sharing
- -------------------------------------
Discretionary Bonus or Profit Sharing
11/7/95 11/13/95
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Date Date