**FEATHERLITE,      INC.**

**Highways      63 and 9**

**Cresco,      Iowa 52136**

| **1.  ** | **Stay                Bonus.**                If                you continue to serve as President of Featherlite Luxury Coaches                until the                earlier of (i) the date any Change of Control (as defined in paragraph                4                below) is completed and or until (ii) June 1, 2006 (the “Service                Requirement”), which ever comes first, you will receive a Stay Bonus of                $100,000, less applicable                withholding. |
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| **2.  ** | **Payment.**                The Stay Bonus will be payable within five days after the Service                Requirement is satisfied. |
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| **3.  ** | **Termination                of Employment.**                If                you are terminated by the Company prior to the satisfaction of the                Service                Requirement, other than for Cause, you will receive the Stay Bonus                within                five days after such termination. “Cause” is defined as any criminal or                grossly negligent act that injures the reputation, business or performance                of the Company; job-related acts of dishonesty, theft or misappropriation                of property of the Company; or any violation of any confidentiality,                non-compete or non-solicitation agreements to which you may be                subject. |
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| **4.  ** | **Change                of Control.**                For purposes of this Agreement, “Change                of Control” shall mean a merger or consolidation to which the Company is a                party, an acquisition by the Company involving the issuance of the                Company’s securities as consideration for the acquired business, or any                combination of fully closed and completed mergers, consolidations                or                acquisitions during any consecutive twenty-four (24) month period,                if the                individuals and entities who were shareholders of the Company immediately                prior to the effective date of such merger, consolidation, or acquisition                (or prior to the effective date of the first of a combination of                such                transactions) have, immediately following the effective date of such                merger, consolidation or acquisition (or following the effective                date of                the last of a combination of such transactions), beneficial ownership                (as                defined in Rule 13d-3 under the Securities Exchange Act of 1934)                of less                than fifty percent (50%) of the total combined voting power of all                classes                of securities issued by the surviving corporation for the election                of                directors of the surviving corporation. |
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| **5.  ** | **Confidentiality.**The                contents of this letter agreement are confidential and may only be                disclosed to your legal advisers, spouse or significant other and                your                supervisor. Any violation of this provision may result in rescission                of                this offer. |
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| **6.  ** | **Employment                Status.**                This letter agreement is not an employment agreement and your status                as an                employee will not change. |
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| **7.  ** | **Termination.**                This letter agreement shall terminate upon payment of the Stay Bonus                in                accordance with paragraphs 1, 2 or 3 or, if earlier, upon the termination                of your employment for Cause, as defined above, provided that the                release                set forth in the following paragraph shall survive any termination                of this                agreement. |
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|                                   | **FEATHERLITE,              INC.**                 |
|                              |                                          |                               |
| Date: March              10, 2006 | By:                                      | /s/ Conrad              D. Clement |
|                                   |                                                    |
|                                   | President              and Chief Executive Officer |

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|                                   | **FEATHERLITE              LUXURY COACHES**                                                    |
|                              |                                                                                      |                             |
| Date: March              10, 2006 | By:                                                                                  | /s/ James              S. Wooley |
|                                   |                                                                                                |
|                                   | President,                Luxury Coach DivisonVice President,                Featherlite, Inc. |