CONDOR EARTH CONDOR EARTH TECHNOLOGIES, INC.TECHNOLOGIES, INC.

EMPLOYEE STOCK EMPLOYEE STOCK OWNERSHIP PLANOWNERSHIP PLAN

ESOP 101ESOP 101

What is an ESOP? What is an ESOP? ESOP is the acronym for ESOP is the acronym for EEmployee mployee SStock tock OOwnership wnership PPlanlan Retirement Plan with ownership interest in the companyRetirement Plan with ownership interest in the company Invests primarily in stock of the employerInvests primarily in stock of the employer Funded with tax-deductible contributions by the employerFunded with tax-deductible contributions by the employer Operates through a trustOperates through a trust ESOP is a qualified plan under ERISA (like a 401k) ESOP is a qualified plan under ERISA (like a 401k)

What is the Purpose of The Plan?What is the Purpose of The Plan?

To enable eligible employees to share in the growth To enable eligible employees to share in the growth and prosperity of Condor and to provide Employees and prosperity of Condor and to provide Employees with an opportunity to accumulate capital for with an opportunity to accumulate capital for retirement. The Plan is designed to do this at no cost retirement. The Plan is designed to do this at no cost to you whatsoever.to you whatsoever.

The success of Condor depends on the teamwork and The success of Condor depends on the teamwork and positive attitude of all Employees.positive attitude of all Employees.

What is the Purpose of The Plan? What is the Purpose of The Plan? (Cont’d.)(Cont’d.)

Ways in which you can contribute to the success of Ways in which you can contribute to the success of Condor include:Condor include: Number 1 is commitment to our Clients – Clients rule!Number 1 is commitment to our Clients – Clients rule! Reduce waste and inefficiencies.Reduce waste and inefficiencies. Make suggestions to your supervisor as to how the Make suggestions to your supervisor as to how the

Company can do a better job.Company can do a better job. Take an active interest in solving problems of the Take an active interest in solving problems of the

Company.Company. Communicate with fellow “employee-owners.”Communicate with fellow “employee-owners.” Get involved: It’s Get involved: It’s youryour Company! Company!

Why was the ESOP Established?Why was the ESOP Established?

To provide Ownership TransitionTo provide Ownership Transition Retirement for founders Barry Hillman and Bob Hoagland.Retirement for founders Barry Hillman and Bob Hoagland.

Principle shareholders desire for Condor to continue Principle shareholders desire for Condor to continue as a company.as a company.

Avoid sell of Condor to a third party.Avoid sell of Condor to a third party. Keep Condor, “Condor” and retain its integrity.Keep Condor, “Condor” and retain its integrity.

History of Condor ESOPHistory of Condor ESOP

Name of the PlanName of the Plan Condor Earth Technologies, Inc. Employee Stock Condor Earth Technologies, Inc. Employee Stock

Ownership Plan (ESOP) Plan Number 002Ownership Plan (ESOP) Plan Number 002 What is the effective date of the ESOP Plan?What is the effective date of the ESOP Plan?

October 1, 2005October 1, 2005 Plan Year: October 1Plan Year: October 1stst through September 30 through September 30thth

Certain valuations and distributions are made based on the Certain valuations and distributions are made based on the Anniversary Date of your plan. This date is September Anniversary Date of your plan. This date is September 30th. 30th.

Plan contributions will be held and invested by the Plan contributions will be held and invested by the Trustee(s) of your Plan.Trustee(s) of your Plan.

Plan Administrator InformationPlan Administrator Information

The Plan Committee is appointed by Condor’s Board of The Plan Committee is appointed by Condor’s Board of Directors. Directors.

Plan Committee members are Ronald L. Skaggs and Plan Committee members are Ronald L. Skaggs and Robert J. Job.Robert J. Job.

The Plan’s Trustees are Ronald L. Skaggs and Robert J. The Plan’s Trustees are Ronald L. Skaggs and Robert J. Job.Job. Plan Trustee(s) have been designated to hold and invest Plan Plan Trustee(s) have been designated to hold and invest Plan

assets. assets. Trust fund will be the funding medium used for the Trust fund will be the funding medium used for the

accumulation of assets from which benefits will be accumulation of assets from which benefits will be distributed.distributed.

Becoming an ESOP ParticipantBecoming an ESOP Participant

Who is eligible?Who is eligible? You must first complete 1,000 Hours of Service in a Plan You must first complete 1,000 Hours of Service in a Plan

Year, and maintain 1,000 Hours of Service in a Plan Year Year, and maintain 1,000 Hours of Service in a Plan Year (approximately 20 hours per week).(approximately 20 hours per week).

Who is not eligible?Who is not eligible? An Employee whose terms of employment are covered by An Employee whose terms of employment are covered by

a collective bargaining agreement;a collective bargaining agreement; A Leased Employee; andA Leased Employee; and A nonresident alien who do not receive any earned income.A nonresident alien who do not receive any earned income.

ContributionsContributions

How are contributions to the Plan determined?How are contributions to the Plan determined? The Board of Directors decides how much to contribute for The Board of Directors decides how much to contribute for

that Plan Year based on the Company’s financial that Plan Year based on the Company’s financial performance and condition.performance and condition.

How is my share of the contribution determined?How is my share of the contribution determined? Your contribution is based on your total compensation.Your contribution is based on your total compensation.

How do I know the value of my account?How do I know the value of my account? Employee Owners will receive a statement showing the Employee Owners will receive a statement showing the

total number of shares and the dollar value at the end of total number of shares and the dollar value at the end of each Plan Year.each Plan Year.

ContributionsContributions(Cont’d.)(Cont’d.)

How is the stock valued?How is the stock valued? Each year an appraisal of the value of the Company’s stock Each year an appraisal of the value of the Company’s stock

is made by an Independent Appraiser. The profits and is made by an Independent Appraiser. The profits and growth of the Company during that year will affect the growth of the Company during that year will affect the value of the Company Stock. value of the Company Stock.

VestingVesting What is vesting?What is vesting?

Vesting is the percentage of your Accounts that is yours Vesting is the percentage of your Accounts that is yours and cannot be forfeited.and cannot be forfeited.

Year of ServiceYear of Service Credited with 1,000 Hours of Service during a Plan Year.Credited with 1,000 Hours of Service during a Plan Year.

Vesting Schedule

Years of Service Percentage of Accounts Vested

Less than Two Years 0

Two Years 20

Three Years 40

Four Years 60

Five Years 80

Six Years 100

VestingVesting(Cont’d.)(Cont’d.)

RetirementRetirement Normal retirement age is 65, upon attaining 65 you will be Normal retirement age is 65, upon attaining 65 you will be

fully vested.fully vested. Early RetirementEarly Retirement

You turn 55 or 20You turn 55 or 20thth anniversary on which you commenced anniversary on which you commenced employment, employment, whichever is laterwhichever is later..

Death & DisabilityDeath & Disability Your Accounts become fully vested automatically if your Your Accounts become fully vested automatically if your

employment is terminated because of death or disability.employment is terminated because of death or disability. TerminationTermination

If you separate from employment and you are not fully If you separate from employment and you are not fully vested, the non-vested portion of your Accounts will be vested, the non-vested portion of your Accounts will be subject to forfeiture.subject to forfeiture.

Vesting ExampleVesting Example

Employee became eligible March 1, 2011.Employee became eligible March 1, 2011.0% vested October 1, 20110% vested October 1, 2011

20% vested October 1, 201220% vested October 1, 2012

40% vested October 1, 201340% vested October 1, 2013

60% vested October 1, 201460% vested October 1, 2014

80% vested October 1, 201580% vested October 1, 2015

100% vested October 1, 2016100% vested October 1, 2016

Sample ESOP CertificateSample ESOP Certificate

DistributionDistributionWhen will Plan Benefits be Distributed?When will Plan Benefits be Distributed?

Separation from service (Death, Disability, Normal or Separation from service (Death, Disability, Normal or Early Retirement)Early Retirement) Plan Benefits will commence during the Plan Year which Plan Benefits will commence during the Plan Year which

follows the Plan Year in which you separated from service.follows the Plan Year in which you separated from service. Distribution of accounts exceeding $5,000 will be made in Distribution of accounts exceeding $5,000 will be made in

substantially equal annual installments over a period of five substantially equal annual installments over a period of five (5) years.(5) years.

Distribution of accounts of $5,000 or less shall be made in Distribution of accounts of $5,000 or less shall be made in a lump sum.a lump sum.

DistributionsDistributions(Cont’d.)(Cont’d.)

Termination of EmploymentTermination of Employment If you are not reemployed before the end of the 5If you are not reemployed before the end of the 5thth Plan Year Plan Year

following the Plan Year in which you separate from service, following the Plan Year in which you separate from service, distribution of your Accounts will commence as soon as distribution of your Accounts will commence as soon as administratively feasible during the 6administratively feasible during the 6thth Plan Year following Plan Year following the Plan Year in which you separated from service.the Plan Year in which you separated from service.

Distribution of accounts exceeding $5,000 will be made in Distribution of accounts exceeding $5,000 will be made in substantially equal annual installments over a period of five substantially equal annual installments over a period of five (5) years.(5) years.

Distribution of accounts of $5,000 or less shall be made in a Distribution of accounts of $5,000 or less shall be made in a lump sum as soon as administratively feasible after the close lump sum as soon as administratively feasible after the close of the Plan Year in which your employment terminates.of the Plan Year in which your employment terminates.

How is the Plan Administered?How is the Plan Administered?

The ESOP Plan Committee is appointed by the The ESOP Plan Committee is appointed by the Condor Board of DirectorsCondor Board of Directors The Committee will make such rules, regulations, The Committee will make such rules, regulations,

decisions, etc. and maintain records and accounts decisions, etc. and maintain records and accounts necessary to administer the Plan.necessary to administer the Plan.

How Are the Shares of the Trust Voted?How Are the Shares of the Trust Voted? The Company Stock acquired by the Plan is owned The Company Stock acquired by the Plan is owned

by the Employee Stock Ownership Trust (ESOT). by the Employee Stock Ownership Trust (ESOT). The Trustees are appointed by the Condor Board of The Trustees are appointed by the Condor Board of Directors.Directors.

Plan AdministrationPlan Administration(Cont’d.)(Cont’d.)

All Company Stock held by the Trust is voted by All Company Stock held by the Trust is voted by the Trustee(s) with instructions from the the Trustee(s) with instructions from the Committee.Committee.

ESOP Participants have at least some voting rights.ESOP Participants have at least some voting rights. Direct the Trustee on the voting of allocated shares for Direct the Trustee on the voting of allocated shares for

sale of the company’s assets, merger, liquidation, sale of the company’s assets, merger, liquidation, recapitalization, reclassification, dissolution, or recapitalization, reclassification, dissolution, or consolidation. consolidation.

ESOP Participants do not have the right to direct the ESOP Participants do not have the right to direct the Trustee(s) on votes regarding the sale of the Company’s Trustee(s) on votes regarding the sale of the Company’s stock.stock.

Summary Annual ReportSummary Annual Report

The Annual Report is filed each year with the The Annual Report is filed each year with the Employee Benefits Security Administration, Employee Benefits Security Administration, United States Department of Labor, as required United States Department of Labor, as required under the under the EEmployee mployee RRetirement etirement IIncome ncome SSecurity ecurity AAct of 1974 (ERISA).ct of 1974 (ERISA).

How your Accounts GrowHow your Accounts Grow

The following are factors which can effect the The following are factors which can effect the value of your Accounts.value of your Accounts.

Employer Contributions (e.g. company income)Employer Contributions (e.g. company income) Income of the Trust (e.g. interest income from CDs)Income of the Trust (e.g. interest income from CDs) Change in Value of Trust Assets (e.g. value of stock)Change in Value of Trust Assets (e.g. value of stock) Forfeitures (e.g. former employees who have left the Forfeitures (e.g. former employees who have left the

company before 100% vested)company before 100% vested)

What is the Future of the Plan?What is the Future of the Plan?

The Company hopes that the Plan will accumulate a The Company hopes that the Plan will accumulate a significant amount of Company Stock, so that the significant amount of Company Stock, so that the Employees will own a portion of the Company. (See Employees will own a portion of the Company. (See Plan for complete information.)Plan for complete information.)

As a Participant in the Plan, you are entitled to As a Participant in the Plan, you are entitled to certain rights and protections under the Employee certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA).Retirement Income Security Act of 1974 (ERISA).

ESOP DefinitionsESOP Definitions ESOP: Employee Stock Ownership Plan. A type of defined

contribution employee benefit plan specifically intended and permitted to be invested primarily in employer securities.

Participant: An individual employee who has met the eligibility requirements of the plan.

Forfeiture: The non-vested portion of an employee’s individual account that reverts to the plan in conformance with the plan documents.

Qualified Retirement Plan: A plan that meets the requirements of the Internal Revenue Code (IRC) allowing contributions and dividends of the plan to be deducted by the plan sponsor on its tax returns. In addition, income attributable to assets held in a qualified plan is exempt until such time as they are distributed.

ESOP DefinitionsESOP Definitions(Cont’d.)(Cont’d.)

Stock Allocation: Those shares of the plan sponsors’ stock actually credited to the individual participant accounts.

Trustee(s): The person(s) and or institution who administers the ESOP for the exclusive benefits of participants and their beneficiaries.

Vested Account Balance: That portion of the participant’s interest in the plan that is non-forfeitable.

Vesting Schedule: The rate at which an employee’s interest in the plan becomes vested.

Vesting Year of Service: The employee gets credited with a vesting year of service in any plan year in which an employee works 1,000 hours.