Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (“Agreement”) is entered into between
Challenger Powerboats, Inc. (the “Company”) and Jack Clark (“Employee”) on the
date signed below by Employee (the Company and Employee are collectively
referred to as the “parties”).

RECITALS

WHEREAS, Employee had an employment agreement with the Company dated September
6, 2006 (“the employment agreement”);

WHEREAS, the parties have disputes relating to Employee's employment, the
termination thereof, and the employment agreement; and

WHEREAS, the parties hereto have reached an agreement to settle the current
disputes among them;

NOW THEREFORE, in consideration of the foregoing premises and the terms,
conditions, and provisions of this Agreement, and for other good and valuable
consideration, the receipt and legal sufficiency of which is hereby
acknowledged, the parties hereby agree as follows.

1.

Resignation.  Employee hereby resigns from employment, and any and all
positions, offices and directorships held, with the Company and its Affiliates,
effective as of February 20, 2008 (the “Separation Date”).   All company records
which include any personnel or employee information (in whatever form kept,
including, but not limited to, electronic files) regarding Employee, will
reflect that Employee resigned from the Company “to pursue other opportunities.”
 

2.

Severance Benefits.  In consideration of Employee’s acceptance of this Agreement
and subject to Employee meeting in full his obligations under it, the Company
will provide Employee the following severance pay and benefits:

(a)

Employee will receive separation pay equal to one (1) months pay that will be
paid over two (2) normal pay periods (“Severance Period”), to be paid on March
14, 2008 and March 31, 2008.

(b)

All severance payments made by the Company under this Agreement shall be reduced
by any tax or other amounts required to be withheld by the Company under
applicable law.

(c)

Although Employee will no longer be enrolled in Company’s health insurance plan
as of the Separation Date, Employee may elect to continue his participation
therein and that of his eligible dependents for the period of time provided for
under the federal law known as “COBRA”.  Should Employee make such election,
Company shall continue to make payments on behalf of Employee through April 30,
2008 in such amounts as it did prior to the Separation Date.

 3.

Final Salary and Vacation Payment.  Upon execution of this agreement, Employee
will receive a final paycheck for three days of pay (February 18-20, 2008) in
the amount of $1,246.15, two weeks of earned vacation pay ($4,153.85) and one
week of accrued vacation ($2,076.92). Employee will not continue to earn
vacation or other paid time off after the Separation Date.

4.

Acknowledgement of Full Payment.  Employee hereby acknowledges that this
Agreement outlines all compensation and consideration due the Employee and will
be received under the terms of this Agreement.  

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5.

Confidentiality and Non-Disparagement.

(a)

Employee agrees that he will continue to protect Confidential Information, as
defined here, and that he will never, directly or indirectly, use or disclose
it. As used in this Agreement, “Confidential Information” means any and all
information of the Company that is not generally known to others with whom it
competes or does business or with whom it plans to compete or do business.
Confidential Information also includes all information received by the Company
from customers or other third parties with any understanding, express or
implied, that the information would not be disclosed.

(b)

Employee agrees that he will not disclose this Agreement or any of its terms or
provisions, directly or by implication, except to members of his immediate
family and to his legal and tax advisors, and then only on condition that they
agree not to further disclose this Agreement or any of its terms or provisions
to others.

(c)

Employee agrees that, he will not disparage or criticize the Company, its
business, its management or its products, and that he will not otherwise do or
say anything that could disrupt the good morale of Company employees or harm its
interests or reputation. The Company agrees that it will not in any way
disparage Employee, make or solicit any oral or written comments, statements or
the like to anyone that may be considered to be derogatory or detrimental to the
good name or professional and personal reputation of the Employee.

6.

Return of Company Documents and Other Property. In signing this Agreement,
Employee assures the Company that Employee has returned to the Company any and
all documents, materials and information (whether in hardcopy, on electronic
media or otherwise) related to Company business (whether present or otherwise)
and all keys, access cards, credit cards, computer hardware and software,
telephones and telephone-related equipment and all other property of the Company
in Employee’s possession or control. Further, Employee represents and warrants
that he has not retained any copy of any Company documents, materials or
information (whether in hardcopy, on electronic media or otherwise). Recognizing
that his employment with the Company has ended, Employee agrees that he will
not, for any purpose, attempt to access or use any Company computer or computer
network or system, including without limitation its electronic mail system.
Further, Employee acknowledges that he has disclosed to the Company all
passwords necessary or desirable to enable the Company to access all
information, which he has password-protected on any of its computer equipment or
on its computer network or system.

7.

Non-solicitation.  As set out in Section 8(b) of Employee’s employment
agreement, which section Employee acknowledges is reasonable and continues to
bind him, Employee agrees he shall not at any time until the twelve (12) month
anniversary of the Separation Date, either individually or through any entity,
solicit in any matter a past or current customer of Company (as of the
Separation Date) for purposes of providing products and services to the customer
that are competitive with the products and services provided by Company; nor
shall Employee, at any time until the twelve (12) month anniversary of the
Separation Date, induce or attempt to induce a past or current customer of
Company (as of the Separation Date) to refrain from purchasing products or
services from Company.

8.

Non-Compete.  Employee is free from any obligations as set out in Section 8(a)
of Employee’s employment agreement: to work directly or indirectly, as an
employee, owner, partner, agent, director, officer, or otherwise, in any
business which manufactures marine products.

9.

Employee Cooperation. Employee agrees to cooperate with the Company hereafter
with respect to all matters arising during or related to his employment,
including but not limited to all matters in connection with any governmental
investigation, litigation or regulatory or other proceeding which may have
arisen or which may arise following the signing of this Agreement. The Company
will reimburse Employee’s out-of-pocket expenses incurred in complying with
Company requests hereunder, provided such expenses are authorized by the Company
in advance.

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10.

Release of Claims.

(a)

In exchange for the special severance pay and benefits provided to Employee
under this Agreement, to which Employee would not otherwise be entitled, on
Employee’s own behalf and that of Employee’s heirs, executors, administrators,
beneficiaries, personal representatives and assigns, Employee agrees that this
Agreement shall be in complete and final settlement of any and all causes of
action, rights or claims, whether known or unknown, that Employee has had in the
past, now has, or might now have, in any way related to, connected with or
arising out of Employee’s employment, or its termination, the employment
agreement, or pursuant to Title VII of the Civil Rights Act, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the fair employment
practices statutes of the state or states in which Employee has provided
services to the Company or any other federal, state or local law, regulation or
other requirement and Employee hereby releases and forever discharges the
Company and its subsidiaries and other Affiliates and all of their respective
past, present and future directors, shareholders, officers, members, managers,
general and limited partners, employees, agents, representatives, successors and
assigns, and all others connected with any of them, both individually and in
their official capacities, from any and all such causes of action, rights or
claims.

(b)

This Agreement, including the release of claims set forth in the paragraph
immediately above, creates legally binding obligations and the Company therefore
advises Employee to consult an attorney before signing this Agreement. In
signing this Agreement, Employee give the Company assurance that he has signed
it voluntarily and with a full understanding of its terms; that he has been
advised of his right to consult with an attorney; that he has had sufficient
opportunity, before signing this Agreement, to consider its terms and to consult
with an attorney, if Employee wished to do so, or to consult with any other of
those persons to whom reference is made in paragraph 4[b] above; and that, in
signing this Agreement, Employee has not relied on any promises or
representations, express or implied, that are not set forth expressly in this
Agreement.

11.

Compliance with Laws.  Employee also acknowledges his obligation, since the
beginning of his employment, to report to the Company any information indicating
that any employee of the Company has, by act or omission, violated any company
policy or federal, state or local law, regulation or ordinance and he confirms
that he either is not aware of any such information or that he has reported any
such information to the Company.

12.

Miscellaneous.

(a)

Except as set out above in paragraphs 6 and 7 of this Agreement relating to
sections 8(a) and 8(b) of Employee’s employment agreement, this Agreement
constitutes the entire agreement between Employee and the Company and supersedes
all prior and contemporaneous communications, agreements and understandings,
whether written or oral, with respect to Employee’s employment, including the
employment agreement, its termination and all related matters, excluding only
any existing obligations Employee has to the Company or any of its Affiliates
with respect to the protection of Confidential Information that are contained in
other agreements between the parties.

(b)

This Agreement may not be modified or amended, and no breach shall be deemed to
be waived, unless agreed to in writing by Employee and the Chief Executive
Officer of the Company or his expressly authorized designee. The captions and
headings in this Agreement are for convenience only and in no way define or
describe the scope or content of any provision of this Agreement.

(c)

The obligation of the Company to make payments to Employee or on Employee’s
behalf under this Agreement is expressly conditioned upon Employee’s continued
full performance of Employee’s obligations under this Agreement.

(d)

For purposes of this Agreement, the term “Affiliates” means any and all persons
and entities directly or indirectly controlling, controlled by or under common
control with the Company, where control may be by management authority, equity
interest, contract or otherwise.

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(e)

All provisions of this Agreement will be construed and governed by Missouri law.

(f)

Employee acknowledges that he has been given twenty-one (21) days to consider
this Agreement. Employee may revoke this Agreement at any time during the seven
(7) day period immediately following the date of his execution by delivering
written notice thereof to the Company. If Employee does not revoke it, prior to
the expiration of that seven (7) day period, this Agreement will take effect as
a legally binding agreement between Employee and the Company on the basis set
forth herein. The enclosed copy of this Agreement, which Employee should also
sign and date, is for Employee’s records.

[Signatures on following page]

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CHALLENGER POWERBOATS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Laurie A. Phillips

 

 

 

 

Signature

 

 

 

 

 

 

 

 

 

Laurie A. Phillips

 

 

 

 

Printed Name

 

 

 

 

 

 

 

 

 

Chief Executive Officer

 

 

 

 

Title

 

 

 

 

 

 

 

 

 

February 20, 2008

 

 

 

 

Date

 

Accepted and agreed:

 

 

 

 

 

 

 

 

 

/s/ Jack Clark

 

 

 

 

Jack Clark

 

 

 

 

 

 

 

 

 

February 20, 2008

 

 

 

 

Date