EXHIBIT 10.1.1

                              EMPLOYMENT AGREEMENT

     This  Agreement,  made and dated as of  January  2,  2003  (the  "Effective
Date"),  by  and  between   Starcraft   Corporation,   an  Indiana   corporation
("Employer"),  and Michael H. Schoeffler,  a resident of Elkhart County, Indiana
("Employee").

                               W I T N E S S E T H

     WHEREAS,  Employer  desires to employ  Employee as its  President and Chief
Operating   Officer,   for   itself   and   each  of  its   subsidiaries   ("Job
Responsibilities");

     WHEREAS,   Employer   desires  to  encourage   Employee  to  make  valuable
contributions  to  Employer's  business  operations  and not to  seek or  accept
employment elsewhere;

     WHEREAS,  Employee  desires to be assured of a secure minimum  compensation
from Employer for his services over a defined term;

     WHEREAS,  Employer desires to assure the continued  services of Employee on
behalf of Employer on an objective and impartial  basis and without  distraction
or  conflict  of  interest  in the event of an  attempt  by any person to obtain
control of Employer;

     WHEREAS,  Employer  recognizes that when faced with a proposal for a change
of control of Employer,  Employee  will have a  significant  role in helping the
Board of  Directors  assess the options and  advising  the Board of Directors on
what is in the  best  interests  of  Employer  and its  shareholders,  and it is
necessary  for  Employee to be able to provide  this advice and counsel  without
being influenced by the uncertainties of his own situation;

     WHEREAS,  Employer  desires  to provide  fair and  reasonable  benefits  to
Employee on the terms and subject to the conditions set forth in this Agreement;

     WHEREAS,   Employer  desires  reasonable  protection  of  its  confidential
business  and  customer  information  which it has  developed  over the years at
substantial  expense and assurance  that Employee will not compete with Employer
for a  reasonable  period  of time  after  termination  of his  employment  with
Employer, except as otherwise provided herein.

     NOW,  THEREFORE,  in consideration of these premises,  the mutual covenants
and undertakings  herein  contained and the continued  employment of Employee to
perform Job Responsibilities for Employer, Employer and Employee, each intending
to be legally bound, covenant and agree as follows:

     1.  Upon  the  terms  and  subject  to the  conditions  set  forth  in this
Agreement,  Employer  employs  Employee  to  perform  Job  Responsibilities  for
Employer, and Employee accepts such employment.

     2. Employee  agrees to serve as President and Chief  Operating  Officer for
Employer   and   each  of  its   subsidiaries   in   connection   with  the  Job
Responsibilities  and to perform such Job Responsibilities in that office as may
reasonably  be  assigned  to him by  Employer's  Board of  Directors;  provided,
however  that such duties  shall be performed in or from the offices of Employer
currently  located at Goshen,  Indiana,  and shall be of the same  character  as
those previously  performed by Employee and generally associated with the office
held by Employee.  Employee shall not be required to be absent from the location
of the  principal  executive  offices of Employer on travel  status or otherwise
more than 45 days in any calendar year.  Employer shall not, without the written
consent of Employee,  relocate or transfer  Employee to a location  more than 30
miles from his principal residence.  Employee shall perform Job Responsibilities
for Employer as President and Chief  Operating  Officer for Employer and each of
its subsidiaries in substantially  the same manner and to substantially the same
extent as Employee  rendered  his  services to Employer  before the date hereof.
Although while employed by Employer, Employee shall devote substantially all his
business  time  and  efforts  to  Employer's  business,  Employee  may  use  his
discretion in fixing his hours and schedule of work  consistent  with the proper
discharge of his duties.

     3. The term of this Agreement shall begin on the "Effective Date" and shall
end on the date  which is one (1) year  following  such date  (the  "Anniversary
Date");  provided,  however, that such term shall be extended for additional one
(1) year terms on each  Anniversary  Date,  unless  either  party  hereto  gives
written notice to the other party not to so extend within ninety (90) days prior
to such Anniversary Date, in which case no further extension shall occur and the
term of this Agreement shall end on the Anniversary  Date as of which the notice
not to extend is given (such term,  including any extension thereof shall herein
be referred to as the "Term"), provided, however, that such notice not to extend
the Term of this  Agreement by either party shall be a termination of employment
prior to  expiration  of the Term of this  Agreement  for all  purposes  of this
Agreement,  including section 7 and section 8 hereof.  Such notice not to extend
the Term of this Agreement  shall be in the form of the "Notice of  Termination"
defined in section 10 hereof,  and shall contain specific  reference to specific
provisions of section 7 hereof relied upon for any such  termination of the Term
of this Agreement on the Anniversary Date or otherwise.

     4.  Employee  shall  receive  an annual  salary of Three  Hundred  Thousand
Dollars  ($300,000.00)  ("Base  Compensation")  payable at regular  intervals in
accordance with Employer's  normal payroll practices now or hereafter in effect.
Employer may  consider and declare from time to time  increases in the salary it
pays Employee and thereby  increases in his Base  Compensation.  Employer  shall
review  Employee's Base  Compensation on an annual basis with the intention that
such review of the Base  Compensation  and the Executive Bonus Plan,  subject to
the  discretion,  responsibilities  and policies of the Employer's  Compensation
Committee,  shall cause the annual Base  Compensation and Bonus to increase from
year-to-year.  Any and all  increases  in  Employee's  salary  pursuant  to this
section shall cause the level of Base Compensation to be increased by the amount
of each such increase for purposes of this  Agreement.  The  increased  level of
Base  Compensation  as provided in this  section  shall become the level of Base
Compensation  for the remainder of the Term of this  Agreement  until there is a
further increase in Base Compensation as provided herein.

     5. So long as Employee is employed by Employer  pursuant to this Agreement,
he shall be  included  as a  participant  in all  present  and  future  employee
benefit,  retirement, and compensation plans generally available to employees of
Employer,  consistent with his Base Compensation,  his Job  Responsibilities and
his position as President  of Employer and Chief  Operating  Officer of Employer
and its subsidiaries,  including,  without  limitation,  Employer's 401(k) plan,
stock  incentive  plan,  Executive  Bonus Plan, and group life  insurance  plans
(collectively,  "Benefit  Plans"),  each of which Employer agrees to continue in
effect on terms no less favorable than those  currently in effect as of the date
hereof (as permitted by law) during the Term of this Agreement,  unless prior to
a Change of Control the  operating  results of Employer are  significantly  less
favorable than those for the last fiscal year, and unless either before or after
a Change of Control  changes in the  accounting  or tax  treatment of such plans
would adversely affect Employer's  operating results or financial condition in a
material   way,  and  the  Board  of  Directors  of  Employer   concludes   that
modifications to such plans need to be made to avoid such adverse  effects,  and
such  modifications  similarly  affect all other  senior  executive  officers of
Employer.

     6. So long as Employee is employed by Employer  pursuant to this Agreement,
Employee shall receive  reimbursement from Employer for all reasonable  business
expenses  incurred in the course of his employment by Employer,  upon submission
to Employer of written vouchers and statements for reimbursement. Employee shall
attend, at his discretion,  those  professional  meetings,  conventions,  and/or
similar  functions that he deems  appropriate and useful for purposes of keeping
abreast of current  developments in the industry and/or  promoting the interests
of Employer.  So long as Employee is employed by Employer  pursuant to the terms
of  this  Agreement,   Employer  shall  continue  in  effect  vacation  policies
applicable  to  Employee  no less  favorable  from his point of view than  those
written vacation  policies in effect on the date hereof.  So long as Employee is
employed by Employer  pursuant to this Agreement,  Employee shall be entitled to
office space and working  conditions  no less  favorable  from his point of view
than were in effect for him on the date hereof.  So long as Employee is employed
by Employer pursuant to this Agreement, employee shall be entitled to the use of
a company  car  provided  by the  Employer.  So long as  Employee is employed by
Employer  pursuant  to this  Agreement,  Employee  shall be  continue to pay for
membership in the Elcona  Country Club,  and Employer  shall continue to pay the
dues and assessments for such membership.

     7.  Subject  to the  respective  continuing  obligations  of  the  parties,
including but not limited to those set forth in subsections 8(A), 8(B), 8(C) and
8(D) hereof,  Employee's  employment by Employer may be terminated  effective on
any  Anniversary  Date or otherwise  prior to the expiration of the Term of this
Agreement upon written notice as required by section 10, and as follows:

     (A)  Employer,  by action of its Board of Directors and upon written notice
          to Employee,  may terminate Employee's employment with Employer at any
          time for cause. For purposes of this subsection 7(A), "cause" shall be
          defined as (i)  willful  misconduct,  (ii)  breach of  fiduciary  duty
          involving personal profit, (iii) intentional failure to perform stated
          duties, (iv) conviction of a violation of any law, rule, or regulation
          (other  than  traffic   violations  or  similar   offenses)  or  final
          cease-and-desist  order,  or (v)  any  material  breach  of any  term,
          condition or covenant of this Agreement.

     (B)  Employer, by action of its Board of Directors, and upon written notice
          to  Employee,   may  fail  to  renew  this  Agreement   effective  any
          Anniversary Date, or may terminate Employee's employment with Employer
          at any time without cause.

     (C)  Employee, by written notice to Employer,  may terminate his employment
          with Employer at any time for cause.  For purposes of this  subsection
          7(C),  "cause" shall be defined as (i) any action by Employer's  Board
          of Directors to remove the Employee as President of Employer and Chief
          Operating Officer of Employer and its  subsidiaries,  except where the
          Employer's  Board of Directors  properly acts to remove  Employee from
          such office for "cause" as defined in subsection 7(A) hereof, (ii) any
          action by  Employer's  Board of  Directors  to  materially  limit,  or
          materially   increase   or   decrease   or   modify   Employee's   Job
          Responsibilities  and/or  authority  as  President  of Employer and as
          Chief Operating  Officer of Employer and its  subsidiaries  (including
          his authority,  subject to corporate controls no more restrictive than
          those in effect on the date hereof,  to hire and  discharge  employees
          who are not bona fide  officers  of  Employer),  (iii) any  failure of
          Employer to obtain the  assumption  of the  obligation to perform this
          Agreement  by  any  successor,  assignee,  or  distributee  of  all or
          substantially all of Employer's  assets (on a consolidated  basis with
          those of its subsidiaries), or the reaffirmation of such obligation by
          such successor,  assignee, or distributee,  as contemplated in section
          16 hereof;  (iv) any material breach by Employer of a term,  condition
          or covenant of this  Agreement;  (v) adoption or approval of a plan of
          liquidation,  dissolution,  or  reorganization  for  Employer  or  its
          subsidiaries by the Employer's Board of Directors; or (vi) a Change of
          Control.

          For  purposes  of this  Agreement,  a "Change of  Control" of Employer
          shall  be  deemed  to  have  occurred  if  during,  or  following  the
          consummation  of, a stock  purchase  program,  tender offer,  exchange
          offer, merger, consolidation,  sale of substantially all of Employer's
          assets,  contested  election,  or any  combination  of  the  foregoing
          transactions, any person, entity or group of persons acting in concert
          (other than the  Employee),  directly or  indirectly  (1) acquires the
          power to vote in excess of  twenty-five  percent  (25%) of the  voting
          securities  of  Employer  and one or more of its  representatives  are
          elected to the Board,  (2) acquires  ownership of the power to vote in
          excess of 50% of the voting  securities of Employer,  or (3) otherwise
          acquires  effective  control of the  business and affairs of Employer;
          provided, however, that (4) a Change of Control shall not be deemed to
          occur as a result of any existing or future  acquisition  of shares of
          Employer capital stock by Employee, or Kelly L. Rose and/or Karen Rose
          or by any  trust(s)  or voting  trust(s) of  Employee,  Kelly L. Rose,
          and/or Karen Rose,  to which any of their  Employer  capital  stock is
          transferred,  and further provided, that (5) a Change of Control shall
          not be  deemed to occur so long as and  during  that  period  after an
          event  which would  otherwise  be a Change of  Control,  during  which
          period  Kelly L.  Rose  remains  as  Chairman  of the  Board and Chief
          Executive Officer of Employer, but, it shall be a Change of Control if
          any of the events discussed in (1), (2) or (3) next above occurs,  and
          Kelly L. Rose thereafter leaves the employment of Employer.



     (D)  Except as otherwise provided in section 3 regarding  nonrenewal on any
          Anniversary Date, and in addition thereto,  Employee,  at any time and
          upon sixty (60) days written  notice to Employer,  may  terminate  his
          employment with Employer without cause.

     (E)  Employee's  employment  with Employer shall  terminate in the event of
          Employee's  death or  disability.  For purposes  hereof,  "disability"
          shall be defined as Employee's inability by reason of illness or other
          physical or mental  incapacity  to perform the duties  required by his
          employment  for any  consecutive  one hundred eighty (180) day period,
          provided  that  notice  of any  termination  by  Employer  because  of
          Employee's "disability" shall have been given to Employee prior to the
          full resumption by him of the performance of such duties.

     8. In the event of  termination  of  Employee's  employment  with  Employer
pursuant to section 7 hereof, which shall include a nonrenewal of this Agreement
on any  Anniversary  Date as provided in section 3 or in subsection 7(B) hereof,
written notice as required by section 10 shall be given, and compensation  shall
continue to be paid by Employer to Employee, as follows:

     (A)  In the event of termination  for cause by Employer or without cause by
          Employee   pursuant  to   subsection   7(A)  or  7(D),   respectively,
          compensation  provided for herein (including Base Compensation)  shall
          continue to be paid, and Employee shall continue to participate in the
          Benefit  Plans and other  perquisites  as provided in sections 5 and 6
          hereof,  through the date of  termination  specified  in the notice of
          termination. Any benefits payable under such Benefit Plans as a result
          of Employee's  participation  in such plans through such date shall be
          paid when due under those plans. The date of termination  specified in
          any notice of  termination  pursuant  to  subsection  7(A) shall be no
          later than the last  business day of the month in which such notice is
          provided to Employee.

     (B)  In the event of termination without cause by Employer or with cause by
          Employee   pursuant  to   subsection   7(B)  or  7(C),   respectively,
          compensation  provided for herein (including Base Compensation)  shall
          continue to be paid, and Employee shall continue to participate in the
          Benefit  Plans and other  perquisites  as provided in sections 5 and 6
          hereof,  through the date of  termination  specified  in the notice of
          termination. Any benefits payable under such Benefit Plans as a result
          of Employee's  participation  in such plans through such date shall be
          paid  when due under  those  plans.  In  addition,  Employee  shall be
          entitled to continue to receive from Employer his Base Compensation at
          the rates in effect at the time of termination  for one (1) additional
          twelve  (12)  month  period,  provided,  however  in  the  event  that
          termination  pursuant to  subsection  7(B) or 7(C) follows a Change of
          Control,  then the  additional  period  referred to herein as "one (1)
          additional  twelve  (12)  month  period"  shall  rather be "three  (3)
          additional  twelve  (12) month  periods."  In  addition,  during  such
          periods,  Employer  will  maintain  in full  force and  effect for the
          continued  benefit of Employee and his dependents each Benefit Plan in
          which  Employee was entitled to participate  immediately  prior to the
          date of his termination,  unless an essentially equivalent and no less
          favorable  benefit is provided by a  subsequent  employer of Employee,
          provided,  however,  that in the event that Employee shall be entitled
          to receive from Employer his Base  Compensation at the rates in effect
          at the time of termination for three (3) additional  twelve (12) month
          periods,  then  Employee at his option may elect to receive  such Base
          Compensation  for such three (3) additional  twelve (12) month periods
          payable  in one  lump  sum  payment  on or  before  thirty  (30)  days
          following the date of  termination,  and Employer will not  thereafter
          maintain  any Benefit Plan for the  continued  benefit of Employee and
          his dependents.  If the terms of any Benefit Plan, or applicable laws,
          do not permit  continued  participation  by  Employee,  Employer  will
          arrange to provide to Employee a benefit substantially similar to, and
          no less  favorable  than, the benefit he was entitled to receive under
          such Benefit Plans at the end of the period of coverage.  The right of
          Employee to continued  coverage under the health and medical insurance
          plans of Employer shall commence upon the expiration of such period.

     (C)  In the event of termination  of Employee's  employment due to death or
          disability  pursuant to  subsection  7(E),  compensation  provided for
          herein  (including Base  Compensation)  shall continue to be paid, and
          Employee  shall continue to participate in the Benefit Plans and other
          perquisites as provided in sections 5 and 6 hereof, as follows.

          In the event  Employee's  employment  with Employer shall terminate in
          the  event of  Employee's  death,  compensation  provided  for  herein
          (including Base Compensation) shall continue to be paid from and after
          the date of Employee's  death.  The spouse (or if none surviving,  the
          dependants of Employee)  shall be entitled to continue to receive from
          Employer the Employee's  Base  Compensation  at the rates in effect at
          the time of  termination  for one (1)  additional  twelve  (12)  month
          period.  In addition,  during such period,  Employer  will maintain in
          full  force and  effect  for the  continued  benefit  of the spouse of
          Employee (or if none  surviving,  the  dependants  of  Employee)  each
          Benefit Plan in which they were  entitled to  participate  immediately
          prior  to the  date  of  death  of  Employee,  unless  an  essentially
          equivalent and no less  favorable  benefit is provided by a subsequent
          employer  of the  spouse  of  Employee  (or  if  none  surviving,  the
          dependants  of  Employee).  If the  terms  of  any  Benefit  Plan,  or
          applicable laws, do not permit  continued  participation by the spouse
          (or if none  surviving,  the  dependants of  Employee),  Employer will
          arrange to provide to spouse of Employee  (or if none  surviving,  the
          dependants  of  Employee) a benefit  substantially  similar to, and no
          less  favorable  than,  the benefit the spouse of Employee (or if none
          surviving,  the  dependants of Employee) was entitled to receive under
          such Benefit Plans at the date of death of Employee. Employer reserves
          the right to cause the  payments  provided for herein to be funded and
          paid in whole or in part from life insurance, annuities, or other such
          similar devices, in its sole discretion.

          In the event  Employee's  employment  with Employer shall terminate in
          the event of Employee's  disability,  compensation provided for herein
          (including Base Compensation) shall continue to be paid from and after
          the date of  Employee's  disability  and  during  the  continuance  or
          recurrence thereof.  Employee shall be entitled to continue to receive
          from Employer the Employee's Base  Compensation at the rates in effect
          at the time of termination  for one (1)  additional  twelve (12) month
          period.  In addition,  during such periods,  Employer will maintain in
          full force and  effect for the  continued  benefit  of  Employee  each
          Benefit Plan in which Employee was entitled to participate immediately
          prior to the date of  disability  of Employee,  unless an  essentially
          equivalent and no less  favorable  benefit is provided by a subsequent
          employer of Employee.  If the terms of any Benefit Plan, or applicable
          laws, do not permit continued participation by Employee, Employer will
          arrange to provide Employee a benefit substantially similar to, and no
          less  favorable  than,  the benefit  Employee  was entitled to receive
          under  such  Benefit  Plans at the  date of  disability  of  Employee.
          Employer  reserves the right to cause the payments provided for herein
          to be  funded  and  paid in  whole  or in part  from  life  insurance,
          annuities, or other such similar devices, in its sole discretion.

     (D)  Employer  will permit  Employee or his personal  representative(s)  or
          heirs,  as the case  may be,  during a  period  of  three  (3)  months
          following  termination  of Employee's  employment by Employer  without
          cause as set forth in subsection  7(B), or Employee's  termination  of
          his  employment  with  Employer  for cause as set forth in  subsection
          7(C),  or death or  disability  of Employee as set forth in subsection
          7(E), to require  Employer,  upon written request and at Employee's or
          his personal representative's or heirs' option to purchase all or less
          than all of outstanding stock options  previously  granted to Employee
          under any  Employer  stock  option plan then in effect  whether or not
          such  options  are  then  exercisable  or have  terminated,  at a cash
          purchase price equal to the amount by which the aggregate "fair market
          value" of the shares  subject to such  options  exceeds the  aggregate
          option price for such shares. For purposes of this Agreement, the term
          "fair  market  value"  shall mean the higher of (1) the average of the
          highest  asked  prices  for  Employer  shares in the  over-the-counter
          market as reported on the NASDAQ system or other national  exchange if
          the shares are traded on such system for the thirty (30) business days
          preceding  such  termination,  or (2)  the  average  per  share  price
          actually  paid for the most  highly  priced  one  percent  (1%) of the
          Employer  shares  acquired in connection with any Change of Control of
          the Employer by any person or group acquiring such control.

     9. In order to  induce  Employer  to enter  into this  Agreement,  Employee
hereby agrees as follows:

     (A)  Unless  otherwise  required to do so by law,  including the order of a
          court or  governmental  agency,  Employee shall not divulge or furnish
          any trade secrets (as defined in IND. CODEss. 24-2-3-2) of Employer or
          any  confidential  information  acquired  by  him  while  employed  by
          Employer  concerning the policies,  plans,  procedures or customers of
          Employer to any person,  firm or  corporation,  other than Employer or
          upon its written request, or use any such trade secret or confidential
          information  directly or indirectly  for Employee's own benefit or for
          the benefit of any person,  firm or  corporation  other than Employer,
          since such trade secrets and confidential information are confidential
          and shall at all times remain the  property of Employer.  To that end,
          Employee agrees as follows:

          (i)  That  all  drawings,   blueprints,   manuals,   letters,  reports
               memoranda,  notes,  notebooks,   customer  lists  and  all  other
               documents or materials whether or not of a secret or confidential
               nature  (and all copies  thereof)  relating to Employer or any of
               its  affiliates  business in any way  obtained by Employee  while
               employed by Employer  shall be  Employer's  property and shall be
               delivered by Employee to Starcraft on  termination  of Employee's
               employment  or at any time at  Employer's  request  together with
               Employee's written certification of compliance. This includes but
               is  not  limited  to  documents  or  other  materials  concerning
               customers,  pricing, marketing, and method or process, product or
               apparatus  manufactured,  used,  developed,  or  investigated  by
               Employer or any of its affiliates, all of which are CONFIDENTIAL;

          (ii) To  disclose  to  Employer  promptly  and  fully  any  invention,
               discovery or improvement,  ("invention(s)") whether patentable or
               not,  hereafter  made or conceived  solely or jointly by Employee
               while employed by Employer and which relates in any manner to the
               business or activities  of Starcraft or any of its  affiliates or
               is suggested  by or results from any duties  assigned to Employee
               or work performed by Employee for or on behalf of Employer;

          (iii)That when requested by Employer,  whether during or subsequent to
               Employee's  employment,  to execute patent applications and other
               instruments  considered  necessary  by  Employer to apply for any
               obtain Letters Patent of the United States and foreign  countries
               with respect to inventions  covered by this Agreement and to make
               assignments and execute other instruments  necessary to convey to
               Employer  ownership  and  exclusive  rights  in such  inventions,
               patent applications and patents; provided, however, that Employer
               shall  bear all  expenses  connected  with such  patents,  patent
               applications  and  maintenance  of  patent  protection,   and  if
               services in connection therewith are performed by Employee at the
               request of Employer after  termination of Employee's  employment,
               Employer   shall   pay   reasonable    compensation    for   such
               post-employment services.

     (B)  For a period of two years after  termination of Employee's  employment
          by Employer for reasons other than those set forth in subsections 7(B)
          or (C) of this Agreement,  Employee shall not (a) compete, directly or
          indirectly, with the business of Employer as conducted during the term
          of this Agreement (defined as aftermarket parts, cargo haulers,  upfit
          customization and specialized  packages through its ownership interest
          in Tecstar,  LLC),  or have any  interest  (including  any interest or
          association,  including but not limited to, that of owner, part owner,
          partner, shareholder,  director, officer, employee, agent, consultant,
          lender or advisor) in any person,  firm or entity which  competes with
          Employer in the geographic  area  described on the attached  Exhibit A
          (each such person, firm or entity is referred to as "Competitor"); (b)
          solicit or accept  business  for or on behalf of any  Competitor;  (c)
          solicit,  induce  or  persuade,  or  attempt  to  solicit,  induce  or
          persuade,  any  person to work for or provide  services  to or provide
          financial assistance to, any Competitor;  or (d) solicit or accept for
          or on behalf of or for the  benefit of any  Competitor,  any  business
          from  any  person,  firm  or  entity  which  during  the  term of this
          Agreement  was a vendor or  supplier  to,  or  subcontractor  for,  or
          commercial purchaser from, Employer.

     (C)  If Employee's  employment by Employer is terminated  for any reason by
          either  Employee  or  Employer,  Employee  will turn over  immediately
          thereafter to Employer all business  correspondence,  letters, papers,
          reports,  customers' lists, financial statements,  records,  drawings,
          credit  reports or other  confidential  information  or  documents  of
          Employer or its  affiliates in the  possession or control of Employee,
          all of  which  writings  are and  will  continue  to be the  sole  and
          exclusive property of Employer or its affiliates.

     (D)  If Employee's  employment by Employer is terminated during the Term of
          this  Agreement  for reasons set forth in  subsections  7(B) or (C) of
          this  Agreement,  Employee  shall have no obligations to Employer with
          respect to noncompetition under subsections 9(A) and 9(B).

     10. Any termination of Employee's  employment with Employer as contemplated
by section 3 and section 7 hereof,  except in the  circumstances  of  Employee's
death,  shall  be  communicated  by  written  "Notice  of  Termination"  by  the
terminating  party to the other party hereto.  Any "Notice of Termination"  must
refer to one or more of  subsections  7(A),  7(B),  7(C),  7(D) or  7(E),  shall
indicate  the  specific  provisions  of this  Agreement  and one or more of such
subsections of section 7 relied upon,  and shall set forth in reasonable  detail
the facts and  circumstances  claimed  to  provide a basis for such  termination
under one or more of such subsections of section 7.

     11. Anything in this Agreement to the contrary notwithstanding,  payment of
Base Compensation by the Employer to or for the benefit of the Employee pursuant
to  subsection  8(B) hereof shall be inclusive  of payment  attributable  to the
confidentiality  and  noncompetition  covenants of section 9 hereof and shall be
payable  whether  or not  deductible  by the  Employer  for  federal  income tax
purposes.

     12. If a dispute arises  regarding the grounds for  termination of Employee
pursuant  to  section  7 hereof,  said  dispute  shall be  resolved  by  binding
arbitration  determined in accordance with the rules of the American Arbitration
Association  and if Employee  obtains a final award in his favor or his claim is
settled by Employer prior to the rendering of an award by such arbitration,  all
reasonable  legal fees and  expenses  incurred  by  Employee  in  contesting  or
disputing any such termination or otherwise  pursuing his claim shall be paid by
Employer, to the extent permitted by law.

     If a dispute arises regarding other provisions of this Agreement, including
enforcement of the  confidentiality  and noncompetition  provisions hereof, then
such shall be heard only by the judge and not by a jury, in any court of general
jurisdiction  in  Elkhart  County,  Indiana,  to which  such sole and  exclusive
jurisdiction  each party  irrevocably  consents.  The prevailing  party shall be
entitled to its costs, expenses and reasonable attorney's fees.

     13. Should  Employee die after  termination of his employment with Employer
while any amounts are payable to him hereunder,  this  Agreement  shall inure to
the  benefit of and be  enforceable  by  Employee's  executors,  administrators,
heirs,  distributees,  devisees and legatees and all amounts  payable  hereunder
shall be paid in  accordance  with the  terms of this  Agreement  to  Employee's
devisee,  legatee or other  designee  or, if there is no such  designee,  to his
estate.

     14. For purposes of this  Agreement,  notices and all other  communications
provided  for herein  shall be in writing and shall be deemed to have been given
when delivered or mailed by United States  registered or certified mail,  return
receipt requested, postage prepaid, addressed as follows:

         If to Employee:   Michael H. Schoeffler
                           57073 Copper Cove
                           Elkhart, IN 46516

         If to Employer:   Starcraft Corporation
                           2703 College Avenue
                           Post Office Box 1903
                           Goshen, IN  46529

                           Attention:  Kelly L. Rose, Chairman of the Board and
                                       Chief Executive Officer

or to such address as either party hereto may have  furnished to the other party
in writing in  accordance  herewith,  except  that  notices of change of address
shall be effective only upon receipt.

     15. The validity,  interpretation,  and performance of this Agreement shall
be governed by the laws of the State of Indiana.

     16.  Employer shall require any successor,  assignee,  distributee or other
transferee of all or  substantially  all of its or its  subsidiaries'  assets or
business  ("Succession")  (whether  direct or  indirect,  by  purchase,  merger,
dissolution, liquidation, consolidation or otherwise, and whether or not it is a
Change of Control) by agreement in form and substance  satisfactory  to Employee
to expressly  assume and agree to perform this  Agreement in the same manner and
same extent that Employer would be required to perform it if no such  Succession
had taken  place.  Failure of  Employer to obtain  such  agreement  prior to the
effectiveness of any such Succession shall be a material  intentional  breach of
this  Agreement and shall  entitle  Employee to terminate  his  employment  with
Employer  pursuant  to  subsection  7(C)  hereof.  As used  in  this  Agreement,
"Employer"  shall mean Employer and its  subsidiaries  from time to time and any
successor to its or their business or assets as aforesaid.

     17. No provision of this  Agreement  may be modified,  waived or discharged
unless such waiver,  modification or discharge is agreed to in writing signed by
Employee  and  Employer.  No waiver by  either  party  hereto at any time of any
breach by the other  party  hereto of, or  compliance  with,  any  condition  or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver of  dissimilar  provisions  or  conditions  at the same or any prior or
subsequent time. No agreements or representation,  oral or otherwise, express or
implied,  with  respect to the  subject  matter  hereof have been made by either
party which are not set forth expressly in this Agreement.

     18. The invalidity or  unenforceability of any provisions of this Agreement
shall not affect the validity or  enforceability of any other provisions of this
Agreement which shall remain in full force and effect.

     19. This  Agreement  may be executed in one or more  counterparts,  each of
which shall be deemed an original but all of which together shall constitute one
and the same agreement.

     20. This  Agreement is personal in nature and neither  party hereto  shall,
without consent of the other, assign or transfer this Agreement or any rights or
obligations  hereunder  except as  provided  in section 13 and section 16 above.
Without  limiting  the  foregoing,  Employee's  right  to  receive  compensation
hereunder shall not be assignable or transferable,  whether by pledge,  creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or  distribution  as set forth in section 13 hereof,  and in the
event of any  attempted  assignment  or  transfer  contrary  to this  paragraph,
Employer  shall have no liability to pay any amounts so attempted to be assigned
or transferred.

     IN WITNESS  WHEREOF,  the parties have caused the  Agreement to be executed
and delivered this 2nd day of January, 2003.

"Employee"                                     "Employer"
                                               STARCRAFT CORPORATION


/s/ Michael H. Schoefferl                      By: /s/ Kelly L. Rose
-------------------------------                --------------------------------
Michael H. Schoeffler                          Kelly L. Rose
                                               Chief Executive Officer

<PAGE>
                                    EXHIBIT A


     In Japan,  Europe,  Mexico,  Canada, and any of the 48 contiguous States of
the United States of America; it being acknowledged by Employee that the Company
conducts  business in all such States,  and also it is  acknowledged by Employee
that the Company presently  conducts a substantial amount of its business in any
and all of the States.