Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This
Employment Agreement (“Agreement”),
dated as of October 6, 2008 (“Effective Date”)
by and between GlobalSCAPE, Inc., a Delaware corporation (“Employer” or the “Company”), and
Craig Robinson (“Employee”).

 

R E C I T A L S:

 

WHEREAS,
Employer desires to employ Employee as its Chief Operating Officer;

 

WHEREAS,
the Employer considers the maintenance of a sound management team, including
Employee, essential to protecting and enhancing its best interests and those of
its stockholders.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth, the parties hereto agree as follows:

 

Section 1.              Employment.  Employer hereby employs Employee, and
Employee hereby accepts employment, upon the terms and subject to the terms and
conditions of this Agreement.  Unless
otherwise consented to by Board of Directors, Employee’s principal place of
employment shall be at the Company’s headquarters in San Antonio, Texas.

 

Section 2.              Duties.  During the Term (as defined below), Employee
shall be employed as Chief Operating Officer of Employer.  Employee shall report to the Chief Executive
Officer of Employer.  Employee agrees to
diligently and honestly exercise his business judgment in the discharge of the
duties as are customary to this position as those duties are determined from
time to time by the Board of Directors of the Employer (the “Board”) and to fully comply with all laws
and regulations pertaining to the performance of this Agreement, all ethical rules,
Employer’s Code of Business Conduct & Ethics for Members of the Board
of Directors and Executive Officers as well as any and all of policies,
procedures and instructions of the Company including, but not limited to, the
provisions of Section 304 of the Sarbanes-Oxley Act of 2002.  Employee agrees to devote his full work time
and best efforts to the performance of the duties as an employee of Employer; provided, however, that Employee shall not be precluded from engaging in non-profit activities
(such as serving on the boards of trade and industry associations, or
religious, charitable or other community organizations), as long as such
activities do not unreasonably interfere with Employee’s duties and
responsibilities as Chief Operating Officer of
Employer.  Employee will not, during the
Term, directly or indirectly, engage in any other business, either as an
employee, employer, consultant, principal, officer, director, advisor, or in
any other capacity, either with or without compensation, without the prior
written consent of the Employer. 
Employee shall also comply with all reasonable rules and
regulations and policies now in effect or as subsequently modified, governing
the conduct of Employer’s employees, including policies relating to insider
trading and reporting obligations intended to comply with the Securities
Exchange Act of 1933.

 

Section 3.              Term.  The term of employment of Employee hereunder
shall be two (2) years from the date hereof (the “Term”). 
This Agreement may be terminated prior to the end of the Term pursuant
to Section 6 below.

 

 

Section 4.              Compensation
and Benefits.  In
consideration for the services of Employee hereunder, Employer shall compensate
Employee as follows:

 

(a)           Base Salary.  Until the termination of Employee’s employment
hereunder (but subject to any severance or other payment to which Employee may
be entitled pursuant to this Agreement or otherwise following termination of
his employment), Employer shall pay Employee a base salary of $180,000 annually
(the “Base Salary”), payable in
accordance with the regular payroll practices of Employer for executives, less
such deductions or amounts as are required to be deducted or withheld by
applicable laws or regulations and less such other deductions or amounts, if
any, as are authorized in writing by Employee. 
Such Base Salary shall be reviewed at least annually by the Compensation
Committee of the Board (the “Committee”),
and may be increased in the sole discretion of the Committee, but not decreased
(any increased amount thereupon being the Base Salary hereunder).

 

(b)           Incentive Compensation.  For each fiscal year of the Company which
ends during the Term, beginning with the fiscal year ending December 31,
2009, Employee shall be eligible to receive an annual cash bonus of up to 50%
of the Base Salary (the “Annual Bonus”),
as recommended and approved by the Committee, if the Company and Employee, as
applicable, achieve the performance targets set by the Committee and
communicated to the Employee.  Incentive
Compensation shall be paid (i) in accordance with, and subject to those
terms and conditions of, the Company’s annual incentive compensation plan which
are administrative or which are required for compliance with Section 162(m) of
the Internal Revenue Code of 1986 (the “Code”);
provided that nothing in the Company’s plan shall apply adversely with respect
to Employee to the extent inconsistent with the express terms of this
Agreement; and (ii) in no event later than the 15th day of the third month
following the end of the taxable year (of the Company or Employee, whichever is
later) in which the performance targets have been achieved.   Employee shall be required to repay any
after-tax portion of Annual Bonus received in respect of any year in which
there is an accounting restatement due to the material noncompliance of the
Company with any financial reporting requirement under the securities laws as a
result of misconduct.

 

(c)           Sign-On Bonus.  Within one week of execution and delivery of
this Agreement in lieu of an Annual Bonus for the fiscal year ending December 31,
2008, the Company shall pay Employee a one-time bonus of $30,000, less such
deductions or amounts as are required to be deducted or withheld by applicable
laws or regulations.

 

(d)           Stock Option Plan.  Employee shall be granted options to purchase
300,000 shares of common stock, par value $0.001 per share, of Employer (“Stock Options”), under the GlobalSCAPE, Inc.
2000 Stock Option Plan (the “Plan”)
and pursuant to the terms of the Stock Option Agreement in substantially the
form used by Employer in connection with the grant of stock options to their
officers and executives, a copy of which is attached as Exhibit A
hereto.  The per share exercise price
under the Stock Option shall equal the price established pursuant to the Plan.

 

(e)           Paid Time Off.  Employee shall be entitled to vacation and
other paid time off in accordance with Employer’s policies for officers and
executives, as they may be modified from time to time during Employee’s
employment hereunder, provided that Employee will have no 

 

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less than fifteen (15) days of paid vacation
during each year of this Agreement, six (6) days of paid sick leave, and
three (3) days of personal leave during each one year term accruing
bi-weekly.  Additionally, Employer agrees
that 10 days of paid vacation shall be deemed accrued as of the Effective Date
of this Agreement.  Vacation and personal
days shall be scheduled in advance and must be taken at such time or times as
approved by the Board.

 

(f)            Group Insurance and
Other Benefits.  Employee
shall be entitled to receive the same benefits Employer makes generally
available to their officers and executives, including, without limitation,
participation in Employer’s group health, life and disability programs, and
Employee’s entitlement to and participation in such benefits programs shall be
at the same rates which are available to Employer’s other executives and
officers.

 

(g)           Savings Plans.  Employee shall be entitled to participate
in Employer’s 401(k) plan, or other retirement or savings plans as are
made available to Employer’s other executives and officers and on the same
terms which are available to Employer’s other executives and officers.

 

Section 5.              Expenses.  Employer will reimburse Employee for expenses
related to the performance of his duties in accordance with its reimbursement
policies for executives and officers in effect from time to time.

 

Section 6.              Defined
Terms Relating to Termination.  The following capitalized terms used in this
Agreement shall have the meanings set forth in this Section 6:

 

(a)           Change in Control.  For purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred if (a) any “person” or “group” (as such terms are used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act as in effect on
the date hereof, except that a person shall be deemed to be the “beneficial
owner” of all shares that any such person has the right to acquire pursuant to
any agreement or arrangement or upon exercise of conversion rights, warrants,
options or otherwise, without regard to the sixty day period referred to in
such Rule), directly or indirectly, of securities representing 50% or more of
the combined voting power of Employer’s then outstanding securities; provided,
however, that if Thomas W. Brown and/or David Mann acquire, directly or
indirectly, securities representing 50% or more of the combined voting power of
Employer’s then outstanding securities it shall not be deemed a Change in
Control, (b) any person or group (other than Thomas W. Brown or David Mann
or entities controlled by either) shall make a tender offer or an exchange
offer for 50% or more of the combined voting power of Employer’s then
outstanding securities, (c) at any time during any period of two
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constituted the
board of directors of Employer and any new directors, whose election by the
board of directors of Employer or nomination for election by Employer’s
stockholders was approved by a vote of at least two-thirds (2/3) of Employer’s
directors then still in office who either were Employer’s directors at the
beginning of the period or whose election or nomination for election was
previously so approved (“Current Directors”),
cease for any reason to constitute a majority thereof, (d) Employer shall
consolidate, merge or exchange securities with any other entity and the
stockholders of Employer immediately before the 

 

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effective time of such transaction do not
beneficially own, immediately after the effective time of such transaction,
shares or other equity interests entitling such stockholders to a majority of
all votes (without consideration of the rights of any class of stock or other
equity interests entitled to elect directors by a separate class vote) to which
all stockholders of the corporation or owners of the equity interests of any
other entity issuing cash or securities in the consolidation, merger or share
exchange would be entitled for the purpose of electing directors or where the
Current Directors immediately after the effective time of the consolidation,
merger or share exchange would not constitute a majority of the board of
directors or similar governing body of the corporation or other entity issuing cash
or securities in the consolidation, merger or share exchange, or (e) any
person or group acquires all or substantially all of Employer’s assets.

 

Notwithstanding the foregoing, however, a Change in
Control shall not be deemed to occur merely by reason of (1) an
acquisition of Employer’s securities by, or any consolidation, merger or
exchange of securities with, any entity that, immediately prior to such
acquisition, consolidation, merger or exchange of securities, was a “subsidiary,”
as such term is defined below.  For these
purposes, the term “subsidiary” means (i) any corporation, limited
liability company or other entity of which 80% of the capital stock or other
equity interests of such entity is owned, directly or indirectly, by Employer
and (ii) any unincorporated entity in respect of which Employer has,
directly or indirectly, an equivalent degree of ownership or (2) an
acquisition of Company securities by Thomas W. Brown or David Mann.

 

(b)           Disability.  For purposes hereof, “Disability” shall be deemed to exist if
Employee (A) meets the definition of either “totally disabled” or “total
disability” (or terms with like meaning) under the terms of the Company’s
long-term disability benefit program, and (B) is suffering from any
medical or mental condition that in the Board’s reasonable opinion would
prevent him from carrying out his normal duties. Any refusal to submit to a
reasonable medical examination by an independent physician to determine whether
Employee is so totally disabled shall be deemed to constitute conclusive
evidence of his disability. The determination of such physician made in writing
to the Company and to Employee shall be final and conclusive for all purposes
of this Agreement.  Termination by the
Company or by Employee of his employment based on “Disability” shall be deemed
to have occurred if, within thirty (30) days after written Notice of
Termination (as hereinafter defined) is given, Employee shall not have returned
to the full-time performance of his duties.

 

(c)           Retirement.  Termination by the Company or Employee of his
employment based on “Retirement”
shall mean termination in accordance with the Company’s retirement policy,
generally applicable to its salaried employees or in accordance with any
retirement arrangement established with Employee’s consent.

 

(d)           Cause.  Termination by the Company of Employee’s
employment for “Cause” shall mean
termination upon:

 

(i)            the continued failure by Employee to substantially
perform his duties with the Company (other than any such failure resulting from
his incapacity due to Disability or any such actual or anticipated failure
resulting from termination by Employee for Good Reason) after a written demand
for substantial performance is delivered to Employee by 

 

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the Board, which demand specifically
identifies the manner in which the Board believes that Employee has not
substantially performed his duties;

 

(ii)           Employee engages in conduct which is demonstrably and
materially injurious to the Company or any of its affiliates, monetarily or
otherwise;

 

(iii)          Employee commits fraud, bribery, embezzlement or other
material dishonesty with respect to the business of the Company or any of its
affiliates, or the Company discovers that Employee has committed any such act
in the past with respect to a previous employer;

 

(iv)          Employee is indicted for any felony or any criminal act
involving moral turpitude, or the Company discovers that Employee has been
convicted of any such act in the past;

 

(v)           Employee commits a breach of any of the covenants,
representations, terms or provisions of this Agreement;

 

(vi)          Employee violates any instructions or policies of the
Company with respect to the operation of its business or affairs; or

 

(vii)         Employee uses illegal drugs.

 

(e)           Good Reason.  For purposes of this Agreement, “Good Reason” shall mean, without Employee’s
express written consent:

 

(i)            the material failure by the Company, without Employee’s
consent, to pay to Employee any portion of his current compensation within ten (10) days
of the date any such compensation payment is due;

 

(ii)           Employer commits a material breach of any of the
covenants, representations, terms or provisions hereof, and such breach is not
cured within thirty (30) days after written notice thereof to the Company,
which notice shall identify in reasonable detail the nature of the breach and
gives Company an opportunity to respond, excluding, however, failure to pay
salary within ten (10) days as further provided in subsection (i) above;

 

(iii)          any material diminution of Employee’s title, function,
duties, authority or responsibilities (including reporting requirements);

 

(iv)          a reduction in Employee’s salary as in effect on the date
of this Agreement or as may be increased from time to time;

 

(v)           a material reduction in the benefits that are in effect
from time to time for Employee; or

 

(vi)          a relocation of the Employee’s principal place of
employment to a location which is beyond a 50 mile radius from San Antonio,
Texas.

 

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Employee must provide notice to the Company
within 90 days of the initial existence of the condition giving rise to “Good
Reason”.  Upon the receipt of such
notice, the Company shall have 30 days to remedy the condition giving rise to “Good
Reason”.

 

(f)            Notice of Termination.  Any purported termination of Employee’s
employment by the Company or by Employee shall be communicated by written
notice to the other party hereto in accordance with Section 15(a) hereof
(“Notice of Termination”).  Such Notice of Termination shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Employee’s employment under the provisions so
indicated.

 

(g)           Date of Termination,
Etc.  “Date of Termination” shall mean (i) if
Employee’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that Employee shall not have returned
to the full-time performance of his duties during such thirty (30) day period),
or (ii) if Employee’s employment is terminated for Cause or by Employee
for Good Reason or for any other reason (other than Disability), the date
specified in the Notice of Termination as the date on which it is reasonably
anticipated that no further services would be performed by Employee for the
Company, as an employee or independent contractor (which, in the case of a
termination by Employee for Good Reason, shall not be less than two (2) weeks
nor more than two (2) months from the date such Notice of Termination is
given).

 

Section 7.              Compensation
Upon Termination or During Disability.

 

(a)           Upon termination of Employee’s employment or during a
period of Disability, Employee shall be entitled to the following benefits:

 

(i)            During any period that Employee fails to perform his
full-time duties with the Company as a result of his Disability, Employee shall
continue to receive his Base Salary at the rate in effect at the commencement
of any such period, together with all compensation payable to Employee under
the Company’s disability plan or other plan during such period, until this
Agreement is terminated as a result of his Disability. Thereafter, Employee
shall be provided with disability benefits that shall be no less than the
benefits that Employee would have been entitled to pursuant to the Company’s
long-term disability plan as in effect immediately prior to a Change in
Control.

 

(ii)           If Employee’s employment shall be terminated by the
Company for Cause or by Employee other than for Good Reason, Disability, death
or Retirement, the Company shall pay Employee his full Base Salary through the
Date of Termination at the rate in effect at the time Notice of Termination is
given unpaid and properly documented expense reimbursements incurred in
accordance with Employer’s policies prior to termination, and compensation for
accrued, and unused vacation as of the Date of Termination and any amounts to
be paid to him pursuant to the Company’s retirement and other benefits plans
then in effect (“Accrued Amounts”),
and the Company shall have no further obligations to Employee under this
Agreement.

 

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(iii)          If Employee’s employment shall be terminated by the Company
or by Employee for Retirement or by reason of Employee’s death, Employee’s
benefits shall be determined in accordance with the Company’s retirement,
benefit and insurance programs then in effect.

 

(iv)          If Employee’s employment by the Company shall be terminated
by the Company other than for Cause and other than because of Employee’s death,
Disability or Retirement or by Employee for Good Reason then, effective as of
the Date of Termination, in lieu of any severance benefits which he otherwise
would be eligible to receive under the Company’s severance plan or policy as in
effect immediately prior to the Change in Control, Employee shall be entitled
to the benefits (“Severance Benefits”)
provided below:

 

(A)          The
Company shall pay Employee Accrued Amounts through the Date of Termination at
the rate in effect at the time the Notice of Termination is given (excluding
any severance benefits under the Company’s severance plan or policy); and

 

(B)           The
Company shall pay Employee, in addition to all Accrued Amounts, (i) if
prior to a Change in Control, Employee’s then current Base Salary for the
period commencing on the Date of Termination and ending upon the earlier of (1) the
last date of the Term, and (2) six (6) months after the Date of
Termination; and (ii) if after a Change in Control, Employee’s then
current Base Salary for a period commencing on the Date of Termination and
ending one (1) year after the Date of Termination.

 

(b)           Notwithstanding any other provision of this Agreement, if
any amount payable hereunder would, individually or together with any other
amounts paid or payable, constitute an “excess parachute payment,” within the
meaning of Section 280G of the Internal Revenue Code of 1986 and any
applicable regulations thereunder (the “Code”)
which would require the payment by Employee of the excise tax imposed by Section 4999
of the Code or any interest or penalty (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then he shall be entitled to
receive an additional payment (the “Gross-Up
Payment”) in an amount such that after the payment by Employee of
all taxes (including any interest or penalties imposed with respect to such
taxes) including, without limitation, any income taxes (and any interest and
penalties with respect thereto) and the Excise Tax imposed upon the Gross-Up
Payment, Employee shall retain an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the total payments to be received by Employee pursuant
to this Agreement.  The determination of
whether the Gross-Up Payment shall be paid shall be made by a nationally
recognized accounting firm selected by Employee and such determination shall be
binding upon him and the Company for purposes of this Agreement.  The costs and expenses of such accounting
firm shall be paid by the Company.

 

(c)           Except as specifically provided in this Section 7,
Employee shall not be required to mitigate the amount of any payment provided
for in this Section 7 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this 

 

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Section 7 be reduced by
any compensation earned by him as the result of employment by another employer
or by retirement benefits after the Date of Termination, or otherwise.

 

(d)           In the event that any payments under this Section 7
or elsewhere in this Agreement are determined to be subject to Section 409A
of the Code, and Employee is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of
the Code and Treasury Regulation §1.409A-1(i), no such payments shall be made
prior to the date that is six (6) months following the Date of
Termination.

 

(e)           (i)            Employee
acknowledges and agrees that (A) Employee is solely responsible for all
obligations arising as a result of the tax consequences associated with
payments under this Agreement including, without limitation, any taxes,
interest or penalties associated with Section 409A of the Code, (B) Employee
is not relying upon any written or oral statement or representation the
Company, any of its Affiliates, or any of their respective employees,
directors, officers, attorneys or agents (collectively, the “Company Parties”) regarding the tax effects
associated with the execution of the this Agreement and the payment under this
Agreement, and (C) in deciding to enter into this Agreement, Employee is
relying on his or her own judgment and the judgment of the professionals of his
or her choice with whom Employee has consulted. 
Employee hereby releases, acquits and forever discharges the Company
Parties from all actions, causes of actions, suits, debts, obligations,
liabilities, claims, damages, losses, costs and expenses of any nature
whatsoever, known or unknown, on account of, arising out of, or in any way
related to the tax effects associated with the execution of this Agreement and
any payment under the Agreement.

 

(ii)           Employee
must execute a full release of all claims within 60 days following termination
of employment in order to be eligible for Severance Benefits.  Without limiting the remedies available to
the Company for breach by Employee of Section 8, Section 9,
Section 10, , Section 11, or Section 12, if
Employee violates the provisions of such Sections after the termination of
Employee’s employment with the Company in a manner reasonably determined by the
Board to be injurious to the Company or any of its affiliates, then Employee
will forfeit the right to any payments under this Section 7 which
are unpaid at the time such violation occurs.

 

Section 8.              Inventions;
Assignment.

 

(a)           Inventions Defined.  All rights to discoveries, inventions,
improvements, designs and innovations (including all data and records
pertaining thereto) that relate to the business of Employer, including its
Affiliates (as defined below), whether or not able to be patented, copyrighted
or reduced to writing, that Employee may discover, invent or originate during
the term of his employment hereunder, and for a period of six months
thereafter, either alone or with others and whether or not during working hours
or by the use of the facilities of Employer (“Inventions”),
shall be the exclusive property of Employer. 
Employee shall promptly disclose all Inventions to Employer, shall
execute at the request of Employer any assignments or other documents Employer
may reasonably deem necessary to protect or perfect its rights therein, and
shall assist Employer, at Employer’s expense, in obtaining, defending and
enforcing Employer’s rights therein. 
Employee hereby appoints Employer as his attorney in fact to execute on
his

 

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behalf any assignments or other documents deemed necessary by Employer
to protect or perfect its rights to any Inventions.

 

(b)           Covenant to Assign and Cooperate.  Without limiting the generality of the
foregoing, Employee shall assign and transfer to Employer the worldwide right,
title and interest of Employee in the Inventions.  Employee agrees that Employer may apply for
and receive patent rights (including Letters Patent in the United States) for
the Inventions in Employer’s name in such countries as may be determined solely
by Employer.  Employee shall provide to
Employer all facts known to Employee and reasonably requested by Employer
relating to the Inventions, and shall cooperate with Employer’s reasonable requests
in connection with vesting title to the Inventions and related patents
exclusively in Employer and in connection with obtaining, maintaining and
protecting Employer’s exclusive patent rights in the Inventions.

 

(c)           Successors and Assigns. 
Employee’s obligations under this Section 8 shall inure to
the benefit of Employer, its Affiliates (as defined below) and their respective
successors and assigns and shall survive the expiration of the term of this
Agreement for such time as may be necessary to protect the proprietary rights
of Employer and its affiliates in the Inventions.  When used herein, “Affiliate”
shall mean an entity which, directly or indirectly, alone or together with
others, controls, is controlled by or is under common control with, Employer.

 

Section 9.              Confidential Information.

 

(a)           Acknowledgment of Proprietary Interest.  Employee acknowledges the proprietary
interest of Employer and its Affiliates in all Confidential Information (as
defined below).  Employee agrees that all
Confidential Information learned by Employee during his employment with
Employer or otherwise, whether developed by Employee alone or in conjunction
with others or otherwise, is and shall remain the exclusive property of
Employer.  Employee further acknowledges
and agrees that his disclosure of any Confidential Information will result in
irreparable injury and damage to Employer.

 

(b)           Confidential Information Defined.  “Confidential Information”
means all trade secrets, copyrightable works, confidential or proprietary
information of Employer or its Affiliates, including without limitation,
(i) information derived from reports, investigations, experiments,
research and work in progress, (ii) methods of operation,
(iii) market data, (iv) proprietary computer programs and codes,
(v) drawings, designs, plans and proposals, (vi) marketing and sales
programs, (vii) the identities of clients or customers,
(viii) historical financial information and financial projections,
(ix) pricing formulae and policies, (x) all other concepts, ideas,
materials and information prepared or performed for or by Employer and (xi) all
information related to the business, services, products, purchases or sales of
Employer or any of its customers, other than (A) information that is
publicly available, and (B) information that becomes available to Employee
after the termination of his employment with Employer from a third party source
not bound by a confidentiality agreement with Employer with respect to such
information.

 

(c)           Covenant Not To Divulge Confidential Information.  Employer is entitled to prevent the
disclosure of Confidential Information. 
As a portion of the consideration for the employment of Employee and for
the compensation being paid to Employee by Employer,

 

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Employee agrees at all times during the term of his employment
hereunder and thereafter to hold in strict confidence and not to disclose to
any person, firm or corporation, other than to persons engaged by Employer to
further the business of Employer or as necessary to perform Employee’s duties
as an employee of Employer and for the sole benefit of Employer or its
Affiliates, and not to use except in the pursuit of the business of Employer,
the Confidential Information, without the prior written consent of Employer.

 

(d)           Return of Materials at Termination.  In the event of any termination or cessation
of his employment with Employer for any reason, Employee shall promptly deliver
to Employer all documents, data and other information derived from or otherwise
pertaining to Confidential Information. 
Employee shall not take or retain any documents or other information, or
any reproduction or excerpt thereof, containing any Confidential Information.

 

Section 10.            Non-Solicitation.

 

(a)           Solicitation of Employees. 
During Employee’s employment with Employer and for a period of twelve
(12) months after termination of such employment at any time and for any reason
(the “Restriction Period”), and regardless of
whether any payments are made to Employee under this Agreement as a result of
such termination, Employee shall not solicit, participate in or promote the
solicitation of any person who was employed by Employer or any of its
Affiliates at the time of Employee’s termination of employment with Employer to
leave the employ of Employer or any of its affiliates, or, on behalf of himself
or any other person, hire, employ or engage any such person; provided, however,
that Employee or an entity for which Employee works shall not be precluded from
generally advertising for employees or from hiring any employees who have not
been solicited by Employee, directly or indirectly, in violation of this Section 10(b).

 

(b)           Solicitation of Clients, Customers, Etc.  During the Restriction Period, and regardless
of whether any payments are made to Employee under this Agreement as a result
of termination of his Employment, Employee shall not, directly or indirectly,
solicit any person who, at the time of termination of Employee’s employment
with Employer, was a client, customer, vendor, consultant or agent of Employer
or its Affiliates and with whom Employee had contact on behalf of Employer
during such period, to discontinue business, in whole or in part, with Employer
or its Affiliates; provided, however,
that the foregoing shall not prohibit Employee from soliciting such clients,
customers, vendors, consultants or agents to do business with any entity or
person as long as such solicitation does not include an express or implied
solicitation to discontinue business, in whole or in part, with Employer or its
Affiliates.

 

Section 11.            Non-Compete.

 

(a)           Competition During Employment.  Employee agrees that during the term of his
employment with Employer, he will not, directly or indirectly, compete with
Employer or its Affiliates in any way, and that he will not act as an officer,
director, employee, consultant, shareholder, partner, equity owner, lender,
guarantor or agent of any entity which is engaged in any business in
competition with, the businesses in which Employer and its Affiliates are
engaged as of the date hereof or in which Employer or its Affiliates become
engaged during the term of his employment; provided, however,
that this Section 11(a) shall not prohibit Employee

 

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or any of his Affiliates from: (i) purchasing or holding an
aggregate equity interest of up to 1%, so long as Employee and his Affiliates
combined do not purchase or hold an aggregate equity interest of more than 5%,
in any business in competition with Employer and its Affiliates.  Furthermore, Employee agrees that during the
term of his employment, he will undertake no planning for the organization of
any business activity competitive with the work he performs as an employee of
Employer and Employee will not combine or conspire with any other employees of
Employer and its Affiliates for the purpose of the organization of any such
competitive business activity.

 

(b)           Competition Following Employment.  In order to protect Employer against the
unauthorized use or the disclosure of any Confidential Information of Employer
and its Affiliates presently known or hereafter obtained by Employee during his
employment under this Agreement, Employee agrees that for a period of twelve
(12) months after the termination or cessation of his employment with Employer
at any time and for any reason, and regardless of whether any payments are made
to Employee under this Agreement as a result of such termination (but subject
to the provisions of Section 12 hereof), Employee shall not,
directly or indirectly, for himself or on behalf of any other corporation,
person, firm, partnership, association, or any other entity (whether as an
individual, agent, servant, employee, employer, officer, director, shareholder,
investor, principal, consultant or in any other capacity), engage or
participate in any business which engages in competition with the businesses
being conducted by Employer or any of its Affiliates during the Term anywhere
in any state in the United States or in any foreign country where Employer or
any of its Affiliates distributes software or performs services related to the
distribution of software, or any other business in which Employer or any of its
Affiliates was actively engaged at the time of termination of Employee’s
employment with Employer; provided, however, that this provision shall not
prohibit Employee or any of his Affiliates from (i) purchasing or holding
an aggregate equity interest of up to 1%, so long as Employee and his
Affiliates combined do not purchase or hold an aggregate equity interest of
more than 5%, in any business in competition with Employer, or
(ii) serving as an officer, employee or consultant to any entity or
business which operates through multiple Affiliates or business divisions, as
long as Employee is serving as an officer, employee or consultant to an
Affiliate or business division which is not engaged in competition with
Employer or any of its Affiliates.

 

Section 12.            Non-Disparagement. 
During Employee’s employment with Employer and thereafter, Employee
agrees not to make any statement or take any action which disparages, defames,
or places in a negative light Employer, Affiliates, or its or their reputation,
goodwill, commercial interests or past and present officers, directors and
employees.

 

Section 13.            Effect of Termination; Actions Upon
Termination.  The Company shall pay Employee when due any
and all previously earned, but as yet unpaid, salary and reimbursement of
business expenses submitted in accordance with the Company’s policy as in
effect.  The provisions of Section 10
and Section 11 shall terminate and be of no further force and
effect in the event (i) Employee’s employment is terminated by Employer
without Cause or by Employee for Good Reason, and (ii) Employer fails to
timely pay Employee the Severance Benefits and/or any other amounts due
pursuant to Section 7.  Upon
termination of employment hereunder, Employee shall immediately resign as an
officer and/or director of Company and of any Affiliates, including any joint
ventures.

 

11

 

Section 14.            Arbitration. 
Without limiting either party’s right to seek equitable remedies under Section 15(c) below
or otherwise, Employer and Employee agree that any dispute or controversy
arising under or in connection with this Agreement shall be settled by
arbitration.  Arbitration under this
Agreement shall be governed by the Federal Arbitration Act and proceed in San
Antonio, Texas, in accordance with the rules of the American Arbitration
Association (“AAA”).  Arbitration will be conducted before a panel
of three neutral arbitrators selected from an AAA list of proposed arbitrators
with business law experience.  Either
party may take any legal action needed to protect any right pending completion
of the arbitration.  The arbitrator will
determine whether an issue is arbitrable and will give effect to applicable
statutes of limitation.  The arbitrator
has the discretion to decide, upon documents only or with a hearing, any motion
to dismiss for failure to state a claim or any motion for summary
judgment.  Discovery shall be governed by
the Federal Rules of Civil Procedure and the Federal Rules of
Evidence.  All information developed by
the arbitration or litigation shall be held in confidence subject to such
protective orders, as the arbitrator deems useful to ensure complete
confidentiality. The decision of the arbitrator shall be final and binding on
all parties to this Agreement (and any third party beneficiaries of this
Agreement), and judgment thereon may be entered in any court having
jurisdiction over the parties.  All costs
of the arbitration proceeding or litigation to enforce the arbitration award
shall be paid by the party against whom the arbitrator decides.  The arbitrator shall have no right to award
punitive, consequential, exemplary or analogous damages.

 

Section 15.            General.

 

(a)           Notices.  All notices and other communications
hereunder shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally or if mailed by
certified mail, return receipt requested or by written telecommunication, to
the relevant address set forth below, or to such other address as the recipient
of such notice or communication shall have specified to the other party in
accordance with this Section 15(a):

 

If to Employer, to:

 

GlobalSCAPE, Inc.

4500 Lockhill Selma Road, Suite 150

San Antonio, Texas 78249

Attention: 
Chief Executive Officer

 

with copy to:

 

Jackson Walker L.L.P.

112 E. Pecan Street, Suite 2400

San Antonio, Texas 78205

Attention: 
Steven R. Jacobs

 

If to Employee, to Employee’s last known address
appearing on Employer’s records.

 

12

 

(b)           Withholding.  All payments required to be made to
Employee by Employer under this Agreement shall be subject to the withholding
of such amounts, if any, relating to federal, state and local taxes as may be
required by law.

 

(c)           Equitable Remedies. 
Each of the parties hereto acknowledges and agrees that upon any breach
by Employee of his obligations under any of Section 8, Section 9,
Section 10, Section 11, or Section 12
Employer shall suffer immediate, substantial and irreparable injury and shall
have no adequate remedy at law. 
Accordingly, in event of such breach, Employer shall be entitled, in
addition other remedies and without showing actual damages, to specific
performance and other appropriate injunctive and equitable relief.

 

(d)           Severability.  If any provision of this Agreement
is held to be illegal, invalid or unenforceable, such provision shall be fully
severable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision never comprised a part hereof, and
the remaining provisions hereof shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by its
severance.  Furthermore, in lieu of such
illegal, invalid or unenforceable provision, there shall be added automatically
as part of this Agreement a provision as similar in its terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.

 

(e)           Waivers.  No delay or omission by either party in
exercising any right, power or privilege hereunder shall impair such right,
power or privilege, nor shall any single or partial exercise of any such right,
power or privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege.

 

(f)            Counterparts.  This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.

 

(g)           Captions.  The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise affect any of
the terms or provisions hereof.

 

(h)           Interpretation of Agreement.  This Agreement shall
be construed according to its fair meaning and not for or against either
party.  Use of the words “herein,”
“hereof,” “hereto,” “hereunder” and the like in this Agreement refer to this
Agreement only as a whole and not to any particular section or subsection of
this Agreement, unless otherwise noted. 
The masculine gender shall be deemed to denote the feminine or neuter
genders, the singular to denote the plural, and the plural to denote the
singular, where the context so permits.

 

(i)            Binding
Agreement; Assignment.  This Agreement shall be binding
upon and inure to the benefit of the parties and shall be enforceable by the
heirs, legal representatives, personal representatives and permitted assigns of
Employee and the successors and assigns of Employer.  The Affiliates of Employer shall be
considered third party beneficiaries of this Agreement with respect to any
services provided by Employee to them and in connection with Employee’s
covenants in Section 8, Section 9, Section 10,
Section 11, and Section 12 hereof to the extent such
covenants apply with respect to such Affiliates.  Employer may assign this Agreement to a
successor entity through a merger, consolidation or sale of all or
substantially all 

 

13

 

of the assets; provided that in the event of any such
assignment, Employer shall remain liable for all of its obligations hereunder
and shall be liable for all obligations of all such assignees hereunder.  If Employee dies while any amounts would
still be payable to him hereunder, such amounts shall be paid to Employee’s
estate.  This Agreement is not otherwise
assignable by Employee.

 

(j)            Entire Agreement.  This
Agreement contains the entire understanding of the parties relating to the
subject matter hereof, and supersedes all prior agreements and understandings
relating to such subject matter, and may not be amended except by a written
instrument hereafter signed by each of the parties hereto.

 

(k)           Governing Law.  This Agreement
and the performance hereof shall be construed and governed in accordance with
the laws of the State of Texas, without regard to its choice of law principles.

 

(l)            Employee Representations.  Employee represents and certifies to Employer
that he: (i) has received a copy of this Agreement for review and study
and has had ample time to review it before signing; (ii) has read this
Agreement carefully; (iii) has been given a fair opportunity to discuss
and negotiate the terms of this Agreement; (iv) understands its
provisions; (v) has had the opportunity to consult his attorney; and
(vi) enters into this Agreement knowingly and voluntarily.  Employee also represents that he will not
make any unauthorized use of any Confidential Information or intellectual
property of any third party in the performance of his duties under this
Agreement and that Employee is under no obligation to any prior employer or
other entity that would preclude or interfere with the full and good faith
performance of Employee’s obligations hereunder.

 

[REMAINDER OF PAGE INTENTIONALLY
BLANK]

 

14

 

EXECUTED as of the date first above written.

 

 

	
   

  	
  GLOBALSCAPE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Craig Robinson

  
					

 

15Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

(Supreme Industries, Inc.)

 

THIS AGREEMENT is made this 30th day of
September, 2008, between Supreme Industries, Inc.,
a Delaware corporation (the “Company”),
and
                                (“Indemnitee”).  This Agreement completely replaces
and supersedes the Indemnification Agreement dated October 15, 1997,
between Indemnitee and the Company.

 

Competent and experienced persons are becoming more reluctant to serve
as directors and/or officers of corporations unless they are provided with
adequate protection against claims and actions against them for their
activities on behalf or at the request of such corporations, generally through
insurance and/or indemnification.

 

Uncertainties in the interpretations of the statutes and regulations,
laws, and public policies relating to indemnification of corporate directors
and officers are such as to make adequate, reliable assessment of the risks to
which directors and officers of such corporations may be exposed difficult,
particularly in light of the proliferation of lawsuits against directors and
officers generally.

 

The Board of Directors of the Company, based upon its business
experience, has concluded that the continuation of present trends in litigation
against corporate directors and officers will inevitably make it more difficult
for the Company to attract and retain directors and officers of the highest
degree of competence committed to the active and effective direction and
supervision of the business and affairs of the Company and its subsidiaries and
affiliates and the operation of its and their facilities. In fact, the Board
deems such consequence to be so detrimental to the best interests of the
Company that it has concluded that the Company should act to provide its
directors and officers with enhanced protection against inordinate risks
attendant on their positions in order to assure that the most capable persons
otherwise available will be attracted to, or will remain in, such positions. In
such connection, such directors have further concluded that it is not only
reasonable and prudent but necessary for the Company to obligate itself
contractually to indemnify, to the fullest extent permitted by applicable law,
financial responsibility for expenses and liabilities which might be incurred
by such individuals in connection with claims lodged against them for their
decisions and actions in such capacities.

 

The General Corporation Law of the State of Delaware, under which law
the Company is organized, empowers a corporation organized in Delaware to
indemnify persons who serve as directors and/or officers of the corporation, or
persons who serve at the request of the corporation as directors and/or
officers of an affiliated corporation, further specifies that the indemnification
provided by law “shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise,” and further
empowers a corporation to “purchase and
maintain insurance” on behalf of such persons “against any liability asserted 

 

 

against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation would
have the power to indemnify him against any such liability under this
[provision].

 

The Certificate of Incorporation and Bylaws of the Company permit
indemnification to the fullest extent permitted by applicable law.

 

The Company desires to have the Indemnitee serve or continue to serve
as a director and/or officer of the Company, and/or as a director, officer,
employee, partner, trustee, agent, and/or fiduciary of such other corporations,
partnerships, joint ventures, employee benefit plans, trusts, and/or other
enterprises (herein referred to as “Company Affiliate”)
of which he or she has been or is serving, or will serve on behalf of or at the
request of or for the convenience of, or to represent the interests of the
Company, free from undue concern for unpredictable, inappropriate, or
unreasonable claims for damages by reason of his or her being, or having been,
a director and/or officer of the Company, and/or a director, officer, employee,
partner, trustee, agent, and/or fiduciary of a Company Affiliate, or by reason
of his or her decisions or actions on their behalf.

 

The Indemnitee is willing to serve, or to continue to serve, or to take
on additional service for, the Company and/or the Company Affiliate in such
aforesaid capacities on the condition that he or she be indemnified as provided
for herein.

 

Accordingly, in consideration of the premises and the covenants
contained herein, the Company and the Indemnitee do hereby covenant and agree
as follows:

 

1                                          Services to the Company: The
Indemnitee shall serve or continue to serve as a director and/or officer of the
Company (in the case of a Company officer at the will of the Company or under
separate contract, if any such contract exists or shall hereafter exist),
and/or as a director, and/or officer, or fiduciary of a Company Affiliate,
faithfully and to the best of his or her ability so long as he or she is duly
elected and qualified in accordance with the provisions of the Bylaws or other
applicable constitutive documents thereof; provided. however that: (a) the
Indemnitee may at any time and for any reason resign from such position
(subject to any contractual obligations which the Indemnitee has assumed apart
from this Agreement); and (b) neither the Company nor the Company
Affiliate will have any obligation under this Agreement to continue the
Indemnitee in any such position.

 

2                                          Right to Indemnification:

 

2.1                                 The Company shall,
except to the extent prohibited by applicable law as then in effect, indemnify
any Indemnitee who is or was involved in any manner (including, without
limitation, as a party or witness), or is threatened to be made so involved, in
any threatened, pending, or completed investigation, claim, action, suit, or
proceeding whether civil, criminal, administrative, or investigative (including,
without limitation, 

 

2

 

any action, suit, or proceeding by or in the right of the Company to
procure a judgment in its favor) (herein referred to as a “Proceeding”)
by reason of the fact that such person is or was a director or officer of the
Company, and/or is or was serving at the request of the Company as a director
or officer, of any Company affiliate, against all expenses (including attorneys’
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such Proceeding; provided.
however, that, except as provided in Paragraph 3.4, the foregoing shall not
apply to a director or officer of the Company with respect to a Proceeding that
was commenced by such director or officer. Such indemnification shall include
the right to receive payment in advance of any expenses incurred by the
Indemnitee in connection with such Proceeding, consistent with the provisions
of applicable law as then in effect.

 

2.2                                 Notwithstanding the
obligation of the Company to indemnify attorneys’ fees as above provided in
Paragraph 2.1, as a condition to being so indemnified the following shall
apply. With regard to any “Proceeding” (as
above defined), there will be groups the members of which have totally common
interests —  i.e., their goals are
identical and there are no conflicts-of-interest among them. At such time as
the determination of these groups has been completed (such determination to be
made by “Independent Counsel” [as hereafter
defined] if the parties involved cannot make such determination among
themselves), each group shall, by majority vote of those comprising such group,
select a single attorney or law firm to serve as (exclusive) legal counsel for
all of the members of such group. In the event that any member of any such
group acts independently by retaining the legal services of any other attorney
or law firm to additionally or separately represent him, her, or it, all legal
fees and expenses of such independently retained attorney or law firm shall be
the (sole) responsibility of such independently acting member of the group.

 

3                                          Advancement of Expenses; Procedures; Presumptions
and Effect of Certain Proceedings: Remedies: In furtherance, but
not in limitation, of the foregoing provisions, the following procedures,
presumptions, and remedies shall apply with respect to advancement of expenses
and the right to indemnification hereunder:

 

3.1                                 Advancement
of Expenses: All reasonable expenses incurred by or on behalf of
the Indemnitee in connection with any Proceeding shall, after initial approval
in accordance with Paragraph 3.2, be advanced to the Indemnitee by the Company
within twenty (20) calendar days after the receipt by the Company of a statement
or statements from the Indemnitee requesting such advance or advances from time
to time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall:  (a) be
delivered to the Company within ninety (90) days after the incurrence of the
expenses being reported on such statement or statements; 

 

3

 

and (b) reasonably evidence the expenses incurred by the
Indemnitee (and, if required by law at the time of such advance, shall include
or be accompanied by an undertaking by or on behalf of the Indemnitee to repay
the amounts advanced if it should ultimately be determined that the Indemnitee
is not entitled to be indemnified against such expenses hereunder).

 

3.2                                 Procurement
for Determination of Entitlement to Indemnification:

 

3.2.1        To
obtain indemnification as herein provided, an Indemnitee shall submit to the
President or Secretary of the Company a written request, including such
documentation and information as is reasonably available to the Indemnitee and
reasonably necessary to determine whether and to what extent the Indemnitee is
entitled to indemnification (herein referred to as the “Supporting
Documentation”). The determination of the Indemnitee’s entitlement to indemnification
shall be made not later than 60 calendar days after receipt by the Company of
the written request for Indemnification together with the Supporting
Documentation. The Secretary or President of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that the Indemnitee has requested indemnification.

 

3.2.2        The
Indemnitee’s entitlement to indemnification hereunder shall (except as provided
in Subparagraph 3.2.3 below) be determined in one of the following ways (each
of which shall give effect to the presumptions set forth in Paragraph 3.3): (a) by
a majority vote of the Disinterested Directors (as hereinafter defined) if they
constitute a quorum of the Board of Directors; (b) by a written opinion of
Independent Counsel (as hereinafter defined) if a quorum of the Board of
Directors consisting of Disinterested Directors is not obtainable or, even if
obtainable, a majority of such Disinterested Directors so directs: (c) by
the stockholders of the Company (but only if a majority of the Disinterested
Directors, if they constitute a quorum of the Board of Directors, presents the
issue of entitlement to indemnification to the stockholders for their
determination); or (d) as provided in Paragraph 3.3. In the event that
this Subparagraph 3.2.2 applies, stockholder approval will be deemed to have
been received if the holders of a majority of the Company’s total common stock
outstanding vote in favor of such approval.

 

3.2.3        Notwithstanding
what is stated above, in the event of a Change in Control (see definition
contained in Exhibit “A” hereto) the
Indemnitee’s entitlement to indemnification shall be determined by a written
opinion of Independent Counsel in a written opinion to 

 

4

 

the Board of Directors, a copy of which shall be delivered to the
Indemnitee. The Independent Counsel shall be selected by the Indemnitee. In the
event the Company objects to the Independent Counsel so selected, within seven
days after written notice of the selection has been given by the Indemnitee to
the Company, the Company may object to such selection by written notification
given to the Indemnitee. Such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirement of “Independent Counsel” as hereafter
defined, and the objection shall set forth with particularity the factual basis
of such assertion. If such written objection is made, the Independent Counsel
so selected may not serve as Independent Counsel unless and until a court has
determined that such objection is without merit. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with the performance of his or her
responsibilities hereunder, and the Company shall pay all reasonable fees and
expenses instant to the implementation of the procedures referred to above.
Upon the due commencement of any judicial proceeding or arbitration pursuant to
Subparagraph 3.4.1 hereof, the Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).

 

3.2.4        In
the event of a Potential Change in Control (as hereinafter defined), the
Company, upon written request by the Indemnitee, shall create a trust (which
shall be a “grantor trust” for federal income tax purposes) for the benefit of
the Indemnitee and from time to time upon written request of the Indemnitee
shall fund such trust in an amount sufficient to satisfy any and all expenses
which at the time of each such request it is reasonably anticipated will be
incurred in connection with a Proceeding for which the Indemnitee is entitled
to rights of indemnification under Paragraph 2 hereof, and any and all
judgments, fines, penalties, and settlement amounts of any and all proceedings
for which the Indemnitee is entitled to rights of indemnification under
Paragraph 2 from time to time actually paid or claimed, reasonably anticipated,
or proposed to be paid. The amount or amounts to be deposited in the trust
pursuant to the foregoing funding obligation shall be determined by the
Independent Counsel referred to in Subparagraph 3.2.2 above. The terms of the
trust shall provide that upon a Change in Control:  (i) the trust shall ‘not be revoked or
the principal thereof invaded, without the written consent of the Indemnitee; (ii) the
trustee shall advance, within two (2) business days of a request by the
Indemnitee, any and all expenses to the Indemnitee; (iii) the trust shall
continue to be funded by the Company in accordance with the funding obligations
set forth above; (iv) the trustee shall promptly 

 

5

 

pay to the Indemnitee all amounts for which the Indemnitee is entitled
to indemnification pursuant to this Agreement or otherwise; and (v) all
unexpended funds in such trust shall revert to the Company upon a final
determination by such Independent Counsel that the Indemnitee has been fully
indemnified under the terms of this Agreement. The trustee shall be an
institutional trustee with a highly regarded reputation chosen by the
Indemnitee. Nothing in this Subparagraph 3.2.4 shall relieve the Company of any
of its obligations under this Agreement. Nothing contained in this Subparagraph
3.2.4. shall prevent the Board of Directors of the Company in its discretion at
any time and from time to time, upon request of the Indemnitee, from providing
security to the Indemnitee for the Company’s obligations hereunder through an
irrevocable line of credit, funded trust as described above, or other
collateral. Any such security, once provided to the Indemnitee, may not be
revoked or released without the Indemnitee’s prior written consent.

 

3.3           Presumptions and Effect of Certain Proceedings:
Except as otherwise expressly provided herein, the Indemnitee shall be presumed
to be entitled to indemnification hereunder upon submission of a request for
indemnification together with the Supporting Documentation in accordance with
Subparagraph 3.2.1, and thereafter the Company shall have the burden of proof
to overcome that presumption in reaching a contrary determination. In any
event, if the person or persons empowered under Paragraph 3.2 to determine
entitlement to indemnification have not been appointed or have not made a
determination within 60 calendar days after receipt by the Company of the
request therefor together with the Supporting Documentation, the Indemnitee shall
be deemed to be entitled to indemnification, and the Indemnitee shall be
entitled to such indemnification unless the Company establishes as provided in
the final sentence of Paragraph 3.4.2 or by written opinion of Independent
Counsel that: (a) the Indemnitee misrepresented or failed to disclose a
material fact in making the request for indemnification or in the Supporting
Documentation; or (b) such indemnification is prohibited by law. The
termination of any Proceeding described in Paragraph 2, or of any claim, issue,
or matter therein, by judgment, order, settlement, or conviction, or upon a
plea of nolo contendere  or
its equivalent, shall not, of itself, adversely affect the right of the
Indemnitee to indemnification or create a presumption that the Indemnitee did
not act in good faith and in a manner which the Indemnitee reasonably believed
to be in, or not opposed to, the best interests of the Company or, with respect
to any criminal Proceeding, that the Indemnitee had reasonable cause to believe
that his or her conduct was unlawful.

 

6

 

3.4                                 Remedies
of Indemnitee:

 

3.4.1                        In the event that a
determination is made pursuant to Paragraph 3.2 that the Indemnitee is not
entitled to indemnification hereunder: (a) the Indemnitee shall be
entitled to seek an adjudication of his or her entitlement to such
indemnification either, at the Indemnitee’s option, in (x) an appropriate
court of the State of Delaware or any other court of competent jurisdiction, or
(y) an arbitration to be conducted by a single arbitrator, selected by
mutual agreement of the Company and the Indemnitee (or, failing such agreement
by the then sitting Chief Judge of the United States District Court for the
appropriate jurisdiction), pursuant to the commercial arbitration rules of
the American Arbitration Association; (b) any such judicial proceeding or
arbitration shall be de novo, and
the Indemnitee shall not be prejudiced by reason of such adverse determination;
and (c) in any such judicial proceeding or arbitration, the Company shall
have the burden of proving that indemnification is prohibited by applicable
law. If any such determination is made, the Indemnitee shall be entitled, on
five days’ written notice to the Secretary of the Company, to receive the
written report of the persons making such determination, which report shall
include the reasons and factual findings, if any, upon which such determination
was based.

 

3.4.2                        If a determination has been
made, or is deemed to have been made, pursuant to Paragraph 3.2 or 3.3, that
the Indemnitee is entitled to indemnification, the Company shall be obligated
to pay the amounts constituting such indemnification within five days after
such determination has been made or deemed to have been made and shall be
conclusively bound by such determination unless the Company establishes as
provided in the final sentence of this paragraph that: (a) the Indemnitee
misrepresented or failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation; or (b) such
indemnification is prohibited by law. If either (x) advancement of
expenses is not timely made pursuant to Paragraph 3.1, or (y) payment of
indemnification is not made within five calendar days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Paragraph 3.2 or 3.3, the Indemnitee shall be entitled to seek
judicial enforcement of the Company’s obligation to pay to the Indemnitee such
advancement of expenses or indemnification. Notwithstanding the foregoing, the
Company may bring an action, in an appropriate court in the State of Delaware
or any other court of competent jurisdiction, contesting the right of the
Indemnitee to receive indemnification hereunder due to the occurrence of an
event described in subclause (a) or (b) of this Subparagraph 3.4.2
(herein referred to as a 

 

7

 

“Disqualifying Event”); provided, however, that in any such
action the Company will have the burden of proving the occurrence of such
Disqualifying Event. 

 

3.4.3                        The Company shall be precluded
from asserting in any judicial proceeding or arbitration commenced pursuant to
this Paragraph 3.4 that the procedures and presumptions of this Paragraph 3 are
not valid, binding, and enforceable, and shall stipulate in any such court or
before any such arbitrator that the Company is bound by all of the provisions of
this Agreement.

 

3.4.4                        If the Indemnitee, pursuant to
this Paragraph 3.4, seeks a judicial adjudication of, or an award in
arbitration to enforce, his or her rights under, or to recover damages for
breach of, this Agreement, the Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, those expenses (see
definition contained in Paragraph 2 above) actually and reasonably incurred by
the Indemnitee if the Indemnitee prevails in such judicial adjudication or arbitration.
If it shall be determined in such judicial adjudication or arbitration that the
Indemnitee is entitled to receive part but not all of the indemnification or
advancement of expenses sought, the expenses incurred by the Indemnitee in
connection with such judicial adjudication or arbitration shall be prorated
accordingly.  Provided, however,
notwithstanding what has just been stated: 
(1) the amount of expenses for reimbursement during the Indemnitee’s
taxable year may not affect the expenses eligible for reimbursement in any
other taxable year; (2) the reimbursement of an eligible expense must be
made on or before ninety (90) days after the date the Indemnitee prevailed in
such adjudication or arbitration; (3) the right to reimbursement may not
be subject to liquidation or exchange for another benefit.  Further, the Indemnitee’s recovery from the
Company of any such expenses must take place during the duration of this
Agreement (see Paragraph 5.1 which follows).

 

3.5                                 Definitions:
For purposes of this Paragraph 3:

 

“Disinterested Director” means a director
of the Company who is not or was not a party to the Proceeding in respect of
which indemnification is sought by the Indemnitee.

 

“Independent Counsel” means
a law firm or a member of a law firm that neither presently is, nor in the past
five years has been, retained to represent: (a) the Company or the
Indemnitee in any matter material to either such party; or (b) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the 

 

8

 

term “Independent Counsel” shall
not include any person who, under the applicable standards of professional
conduct then prevailing under the laws of the State of Delaware would have a
conflict of interest in representing either the company or the Indemnitee in an
action to determine the Indemnitee’s rights hereunder.

 

“Potential Change in Control” shall
be deemed to have occurred if: (i) the Company enters into an agreement,
the consummation of which would result in the occurrence of a Change in
Control; (ii) a person (including the Company) publicly announces a
legitimate intention to take or to consider taking actions which if consummated
would constitute a Change in Control; (iii) any person, other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their ownership of
stock of the Company, who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 9.5 % or more of the
combined voting power of the Company’s then outstanding Voting Securities,
increases his or her beneficial ownership of such securities by five percentage
points or more over the percentage so owned by such person; or (iv) the
Board of Directors adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

 

4                                          Other Rights to Indemnification:
The indemnification and advancement of costs and expenses (including attorneys’
fees and disbursements) provided by this Agreement shall not be deemed
exclusive of any other rights to which the Indemnitee may now or in the future
be entitled under any provision of applicable law, the Certificate of
Incorporation, or any Bylaw of the Company or any other agreement, or any vote
of directors or stockholders or otherwise, whether as to action in his or her
official capacity or in another capacity while occupying any of the positions
or having any of the relationships referred to in Paragraph 1 of this
Agreement.

 

5                                          Duration of Agreement:

 

5.1           This
Agreement shall be effective from and after the date hereof, and shall continue
until and terminate upon the later of: (i) the tenth (10th)
anniversary after the Indemnitee has ceased to occupy any of the positions or
have any of the relationships described in Paragraph 1 of this Agreement; or (ii) (a) the
final termination or resolution of all proceedings with respect to the
Indemnitee commenced during such ten (10) year period, and (b) either
(x) receipt by the Indemnitee of the Indemnification to which he or she is
entitled hereunder with respect thereto, or (y) a final adjudication or
binding arbitration that the Indemnitee is not entitled to any further
indemnification with respect thereto, as the case may be.

 

9

 

5.2           This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of the Indemnitee and his or her heirs, devisees,
executors, administrators, or other legal representatives.

 

6.                                       Severability: If any provision or
provisions of this Agreement are held to be invalid, illegal, or unenforceable
under any particular circumstances or for any reason whatsoever: (a) the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including, without limitation, all other portions of any paragraph
or clause of this Agreement that contains any provision that has been found to
be invalid, illegal, or unenforceable, that are not themselves invalid,
illegal, or unenforceable) or the validity, legality, or enforceability under
any other circumstances shall not in any way be affected or impaired thereby;
and (b) to the fullest extent possible consistent with applicable law, the
provisions of this Agreement (including, without limitation, all other portions
of any paragraph or clause of this Agreement that contains any such provision
that has been found to be invalid, illegal, or unenforceable, that are not
themselves invalid, illegal, or unenforceable) shall be deemed revised and
shall be construed so as to give effect to the intent manifested by this Agreement
(including the provision held invalid, illegal, or unenforceable).

 

7.                                       Identical Counterparts: This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original, but all of which together shall
constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence
the existence of this Agreement.

 

8.                                       Headings: The headings of the
paragraphs of this Agreement are inserted for convenience and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.

 

9.                                       Modification and Waiver: No
supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

10.                                 Notification
and Defense of Claim: The Indemnitee agrees to notify the
Company promptly in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information, or other document relating to any
matter which may be subject to indemnification hereunder, whether civil,
criminal, or investigative; provided. however, that the failure of the
Indemnitee to give such notice to the Company shall not adversely affect the
Indemnitee’s rights under this Agreement except to the extent the Company has
been materially prejudiced as a direct result of such failure. Nothing in this
Agreement shall constitute a waiver of the Company’s right to seek
participation at its own expense in any Proceeding which may give rise to
indemnification hereunder.

 

10

 

11.                                 Notices:
All notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if: (i) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed; or (ii) mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is
so mailed, in either case:

 

(a)           if to the
Indemnitee, at the address indicated on the signature page hereof;

 

(b)           if to the Company:

 

Supreme Industries, Inc.

2581 E. Kercher Road

Goshen, IN 46528

 

or to such address as may have been furnished to either party by the
other Party.

 

12            Governing Law: The parties hereto
agree that this Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Supreme Industries, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Robert W. Wilson,

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:

  
	
   

  	
   

  	
  Address:

  

 

11

 

Exhibit “A”

to

Indemnification Agreement

 

I.              Change
in the ownership of a corporation

 

(A)  In general.  A change
in the ownership of a corporation occurs on the date that any one person, or
more than one person acting as a group, acquires ownership of stock of the
corporation that, together with stock held by such person or group, constitutes
more than 50 percent of the total fair market value or total voting power of
the stock of such corporation.  However,
if any one person, or more than one person acting as a group, is considered to
own more than 50 percent of the total fair market value or total voting power
of the stock of a corporation, the acquisition of additional stock by the same
person or persons is not considered to cause a change in the ownership of the
corporation (or to cause a change in the effective control of the
corporation).  An increase in the
percentage of stock owned by any one person, or persons acting as a group, as a
result of a transaction in which the corporation acquires its stock in exchange
for property will be treated as an acquisition of stock.  This applies only when there is a transfer of
stock of a corporation (or issuance of stock of a corporation) and stock in
such corporation remains outstanding after the transaction.

 

(B)                                Persons
acting as a group.  Persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering.  However, persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase, or acquisition of stock, or
similar business transaction with the corporation.  If a person, including an entity, owns stock
in both corporations that enter into a merger, consolidation, purchase, or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

 

II.                                     Change
in the effective control of a corporation.

 

(A)          In general.  Notwithstanding that a corporation has not
undergone a change in ownership, (see above), a change in the effective control
of a corporation occurs only on the date that either –

 

(1)           Any one person, or
more than one person acting as a group, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the corporation possessing 35 percent
or more of the total voting power of the stock of such corporation; or

 

(2)           A majority of
members of the corporation’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the corporation’s board of directors prior to the election,
provided that for purposes of this paragraph the term corporation refers solely
to the relevant corporation 

 

1

 

for which no other corporation is a majority shareholder for purposes
of that paragraph (for example, if Corporation A is a publicly held corporation
with no majority shareholder, and Corporation A is the majority shareholder of
Corporation B, which is the majority shareholder of Corporation C, the term
corporation for purposes of this paragraph would refer solely to Corporation
A).

 

(B)                                Multiple
change in control events.  A change in
effective control also may occur in any transaction in which either of the two
corporations involved in the transaction has a change in control event.  Thus, for example, assume Corporation P
transfers more than 40 percent of the total gross fair market value of its
assets to Corporation O in exchange for 35 percent of O’s stock.  P has undergone a change in ownership of a
substantial portion of its asset, and O has a change in effective control.

 

(C)                                Acquisition
of additional control.  If any one
person, or more than one person acting as a group, is considered to effectively
control a corporation, the acquisition of additional control of the corporation
by the same person or persons is not considered to cause a change in the
effective control of the corporation (or to cause a change in the ownership of
the corporation).

 

(D)                               Persons
acting as a group.  Persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering.  However, persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase, or acquisition of stock, or
similar business transaction with the corporation.  If a person, including an entity, owns stock
in both corporations that enter into a merger, consolidation, purchase, or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation only with respect
to the ownership in that corporation prior to the transaction giving rise to
the change and not with respect to the ownership interest in the other
corporation.

 

III.                                 Change
in the ownership of a substantial portion of a corporation’s assets.

 

(A)          In general.  Change in the ownership of a substantial
portion of a corporation’s assets.  A change
in the ownership of a substantial portion of a corporation’s assets occurs on
the date that any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or person) assets from the corporation
that have a total gross fair market value equal to or more than 40 percent of
the total gross fair market value of all of the assets of the corporation
immediately prior to such acquisition or acquisitions.  For this purpose, gross fair market value
means the value of the assets of the corporation, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
such assets.

 

(B)           Transfers to a
related person.

 

(1)           There is no change
in control event when there is a transfer to an entity that is controlled by
the shareholders of the transferring corporation immediately after the 

 

2

 

transfer.  A transfer of assets
by a corporation is not treated as a change in the ownership of such assets if
the assets are transferred to –

 

(i)  A shareholder of the corporation (immediately before the
asset transfer) in exchange for or with respect to its stock;

 

(ii)  An entity, 50 percent or more of the total value or voting
power of which is owned, directly or indirectly, by the corporation;

 

(iii)  A person, or more than one person acting as a group, that
owns, directly or indirectly, 50 percent or more of the total value or voting
power of all the outstanding stock of the corporation; or

 

(iv)  An entity, at least 50 percent of the total value or voting
power of which is owned, directly or indirectly, by a person described in “(iii)”
immediately preceding.

 

(2)           A person’s status is
determined immediately after the transfer of the assets.  For example, a transfer to a corporation in
which the transferor corporation has no ownership interest before the
transaction, but which is a majority-owned subsidiary of the transferor corporation
after the transaction is not treated as a change in the ownership of the assets
of the transferor corporation.

 

(C)           Persons acting as a
group.  Persons will not be considered to
be acting as a group solely because they purchase assets of the same corporation
at the same time.  However, persons will
be considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase, or acquisition of assets, or
similar business transaction with the corporation.  If a person, including an entity shareholder,
owns stock in both corporations that enter into a merger, consolidation,
purchase, or acquisition of assets, or similar transaction, such shareholder is
considered to be acting as a group with other shareholders in a corporation
only to the extent of the ownership in that corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

 

3

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