Document:

Exhibit 10.3

 

Employment Contract

(as Amended and Restated Effective January 1, 2005)

 

Supreme Industries, Inc.

 

(William J. Barrett)

 

This Contract is entered
into between Supreme Industries, Inc.,
a Delaware corporation (hereafter called “Company”),
and William J. Barrett (hereafter
called “Executive”).

 

Company is engaged (through
a wholly-owned subsidiary, Supreme Corporation) in the business of
manufacturing and selling specialized truck bodies. Company desires to obtain
the services of Executive as one of its key executives, and Executive is
willing and able to perform in that capacity.

 

This Contract
was initially entered into to be effective May 1, 2003. As the result of
unexpected developments under the Internal Revenue Code of 1986, as amended
(the “Code”), the parties have received professional advise that it is
necessary and appropriate to amend the original Contract so as to bring it into
compliance with newly adopted Section 409A of the Code. As a result, this
(amended) Employment Contract amends and completely restates the Contract dated
to be effective May 1, 2003.

 

Accordingly, in
consideration of the mutual covenants herein contained, the parties to this
Contract agree as follows:

 

1.               Employment. Company hereby employs Executive, and
Executive hereby accepts such employment from Company, pursuant to those
provisions herein contained.

 

2.               Term of
Contract.

 

a.                                       Beginning
Date. The beginning
date of this Contract will be May 1, 2003.

 

b.                                      Evergreen
Provision. Commencing
on the first day after the date of this Contract, and on each day thereafter,
the term of this Contract (the “Term of this Contract”) shall automatically be
extended for one additional day so that a constant three (3) year term will
always be in effect (unless Executive elects not to extend the Term of this
Contract by giving written notice to Company, in which case the Term of this
Contract will become fixed and will end on the third anniversary date of such
written notice). In the event of the death or Disability (as hereafter defined)
of Executive, the termination of this Contract by Company without Cause (as
hereafter defined), or the termination of this Contract by Executive for Good
Reason (as hereafter defined), the Term of this Contract will become fixed and
will end on the fifth anniversary date of such event.

 

c.                                       Change in Ownership or
Control. Further, in the
event of a “Change in Ownership or Control
of Company,” the Term of this Contract will be automatically
extended so as to remain in effect until the fifth anniversary date of such
Change in Control of Company. For purposes of this Contract, the term “Change in Ownership or Control of Company”
is defined in Exhibit “A” attached
hereto.

 

d.                                      Calendar Year. Company’s financial reports are currently
maintained on a calendar year basis. If, at any time in the future, Company
switches to a fiscal year, then (during such period of time) all references in
this Contract to “calendar year” shall be deemed to refer to such fiscal year.

 

3.               Duties of
Executive. Executive
is initially employed  as Executive Vice
President (Long Range and Strategic Planning) and Secretary of Company pursuant
to the terms and conditions of this

 

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Contract. Executive
may also serve in other capacities reasonably requested by the Board of
Directors so long as such other office or offices are not demeaning in nature. In
no event may any such change or changes in officer positions have the effect of
reducing the amount of compensation payable to Executive under this Contract
(or otherwise diminishing any of the rights and benefits provided to Executive
under this Contract). It is expressly agreed to and acknowledged by the parties
that Executive’s employment with Company hereunder shall not be on a full-time
or exclusive basis. However, Executive agrees to provide services to Company on
a reasonable basis consistent with past practice, and shall conduct himself at
all times so as to advance the best interests of Company. Notwithstanding
anything contained herein (or in the exhibits attached hereto) to the contrary,
it is understood and agreed that Executive may, from time to time, make
investments in, and even obtain control of, other business entities so long as
no such business entities are competitive with the business operations of
Company.

 

4.               Compensation. During the Term of this Contract (except as
otherwise provided herein), the following shall apply:

 

a.               Base
Salary. Company
shall pay to Executive a minimum base salary of $108,000 per year payable in twenty-six (26) equal payments
per year of $4,153.85 (or in
accordance with such other sequence of payments as determined by Company’s then
existing payroll policies) from which federal withholding and social security
taxes will be deducted. However, such payments shall be offset by all other
fees actually received by Executive for serving as a member of the Board of
Directors and any committee of Company and its subsidiaries; and

 

b.              Pre-Tax
Bonus. In addition
to the above, if the pre-tax earnings of Company for a calendar year exceed
$2,000,000, Company shall pay to Executive not later than by March 15 following
the end of the calendar year to which it relates:  (i) $36,000; plus (ii) six-tenths of one
percent  (0.6%) of the amount by which
such pre-tax earnings of Company exceed $2,000,000. In making such
determination, there shall be excluded all items of an extraordinary and
non-recurring nature. For this purpose, Company’s pre-tax earnings will be
determined by Company’s independent accountants (which determination shall be
binding and conclusive).

 

5.               Fringe
Benefits. During the
Term of this Contract (except as otherwise provided herein), Executive shall
receive the following fringe benefits:

 

a.               Business
Expenses. Company
shall pay or reimburse Executive for all expenses reasonably incurred by him in
the performance of services hereunder including, without limitation, expenses
for entertainment, traveling, meals, hotel accommodations, and similar items
upon submission of vouchers or itemized lists of such expenses prepared in
compliance with Company’s policy;

 

b.              Medical
Benefits. Executive
shall receive the same rights as have been given to Company’s executives of
like stature and status as to group hospitalization, accident, and major
medical benefits for himself and the members of his family (except that
Executive shall be under the same obligation to pay his pro-rata portion of
such benefits as all other of Company’s executives in the event he desires to
receive such benefits). However, in the event that, at any time during the Term
of this Contract, Executive’s medical expenses exceed any ceiling amounts
provided for in any of Company’s medical benefit plans, Company shall
nevertheless be obligated (without any additional expense to Executive) to pay
all of such excess amounts (and may, if Company elects to do so, obtain
supplemental insurance to provide third party funding of such excess amounts). But
the payment obligation of Company, provided for in the preceding sentence,
following termination of employment will be limited to: (1) amounts
that otherwise would be deductible to Executive under IRS Code Sec. 213; and
(2) excess medical expenses incurred only within  the period ending on the
last day of the second calendar year after the calendar year in which Executive
separates from service;

 

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c.               Insurance. Company shall pay, not later than December
31 of each calendar year, the lesser of $30,000 or the actual amount of
premiums owing on insurance of any kind owned by Executive (and/or his wife)
covering Executive or “last to die” insurance covering the lives of Executive
and his wife (the “Coverage Amount”) paid during such year.

 

In addition to the Coverage Amount, Company shall also
pay to Executive, each year, such amount which, after taking into consideration
the income tax effect of the “deemed income” to Executive (for the Coverage
Amount and the federal and state tax offset payments) will offset such
additional taxes (the “Gross-Up Amount”). In making the determination of the
Gross-Up Amount, the following formula shall be used: Coverage Amount/(1 –
(Executive’s marginal tax bracket + .014 [Medicare] + Executive’s marginal tax
bracket for state income taxes, if any, + city taxes, if any) minus the Coverage
Amount. For example, assuming that: (i) the annual premium is $30,000.00
(Coverage Amount = $30,000); (ii) Executive is in the 35% marginal tax bracket;
(iii) the Coverage Amount is not subject to social security taxes; (iv)
Executive is in the 10% state income tax bracket; and (v) the Coverage Amount
is not subject to city taxes; the Gross-Up Amount would be: $25,970.15
($30,000/(1 – (.35 + .014 + .1) minus $30,000;

 

d.              Dental
Benefits. Company
shall pay or reimburse Executive for all family dental expenses up to a maximum
of $5,000 per year;

 

e.               Automobile. Company shall provide an automobile (of
like kind to that currently leased) for Executive’s use in connection with the
services to be rendered by Executive to Company. Company shall pay or reimburse
Executive for maintenance, repair, and other expenses of the automobile upon
submission of vouchers or itemized lists of such expenses prepared in
compliance with Company’s policy. For so long as Company owns (or leases) the
automobile, Company shall insure the automobile with the same automobile
insurance company coverage that is provided for other executive officers of
Company. Company agrees that Executive shall be designated as an additional
insured on any Company-provided policy providing liability insurance coverage,
and that such policy shall also provide coverage for such family members of
Executive and other persons who may be authorized by Executive to drive the
automobile. In the event the automobile is damaged or destroyed by reason of
accident, theft, vandalism, or otherwise, Executive will not have any liability
to Company for any such loss or damage (including out-of-pocket deductibles);

 

f.                 Other
Benefits. No
provision of this Contract will preclude Executive from participating in any
fringe benefit plan now in effect or hereafter adopted by Company; and

 

g.              Attorneys’
Fees. Company shall
reimburse Executive for reasonable attorneys’ fees and expenses incurred in the
negotiation and review of this Contract and any issues arising hereunder.

 

6.               Key-Man
Insurance. Company
may, at any time during the Term of this Contract, apply for and procure as
owner, and for its sole benefit, life insurance on Executive’s life in such
amounts and in such forms as Company may select. Executive hereby acknowledges
the fact that he will have no interest whatsoever in any such insurance policy.
However, Executive agrees that he shall, at Company’s request, submit to such
medical examinations, supply such information, and execute such documents as
may be reasonably requested by the insuring companies.

 

7.               Termination
of Employment. Executive’s
obligations to perform the duties and services specified in paragraph 3 hereof
will be terminated as follows (entitling Executive to receive the payments and
benefits provided for in paragraph “9.” to follow):

 

a.               Upon the
Death of Executive. Within
thirty (30) days after the death of Executive, any sums then owing to Executive
pursuant to paragraph “4.a.” of this Contract shall be paid to the estate or
assigns of Executive.

 

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b.              Upon the
Disability of Executive.
For purposes of this Contract, the term “Disability” will mean: 
(i) if Executive is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months; or (ii) if Executive, is, by reason
of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for
a period of not less than three (3) months under an accident and health plan covering
employees of Company.

 

c.               Upon
Election by Company (but only for “Cause”). For purposes of this Contract, the term “Cause” will mean (only) the willful
engagement by Executive in gross misconduct materially injurious to Company
which shall have been determined by the final award of the arbitrator. For
purposes of this definition, any act or failure to act on Executive’s part
shall not be considered willful unless done or omitted to be done by him in bad
faith and without reasonable belief that his action or omission was in the best
interest of Company. In the event that Company elects to terminate this
Contract for Cause:  (1) there shall be
no change in the obligation of Company to pay compensation to Executive under
this Contract prior to a final determination of “Cause;” and (2) Company shall
pay all of the expenses of Executive in defending against the allegation of “Cause”
but, in the event there is a final determination that Company was justified in
electing to terminate Executive for Cause, Executive shall, within thirty (30)
days thereafter, reimburse Company for all such expenses paid on Executive’s
behalf by Company.

 

d.              Upon
Election by Executive for Good Reason. For purposes of this Contract, the term “Good Reason” will mean: 
(1) a Change in Control of Company (as that term is defined in paragraph
“2.c.” above); (2) any assignment to Executive by Company of any significant
undesirable or demeaning duties (other than those duties contemplated by
paragraph “3.” hereof); (3) any failure of Company to comply with paragraph “4.”
hereof; or (4) failure of Company to obtain from any successor of Company (as
specifically provided in paragraph 15 hereof) an agreement to assume all of
Company’s liabilities and obligations created by or arising from this Contract.

 

8.               Notice of
Termination. Any
termination of Executive’s obligations to perform the duties and services
designated in paragraph “3.” hereof by Company, or by Executive pursuant to the
provisions of paragraph “7.” hereof, shall be communicated by written notice to
the other party which shall indicate the specific termination provision in this
Contract relied upon by the terminating party and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for such termination.

 

9.               Termination
Payments. If:  (a) Executive dies; (b) Executive suffers a
Disability; (c) Company terminates Executive without Cause; or (d) Executive
terminates this Contract for Good Reason, then the following shall apply:

 

a.               During the remainder of the Term of this
Contract, Company shall continue to pay Executive (or, in the event of
Executive’s death, to Executive’s wife or his estate, whichever is applicable)
his base salary under paragraph “4.a.” above on a periodic basis at the same
rate as payable immediately prior to the date of termination;

 

b.              During the remainder of the Term of this
Contract, Company shall continue to pay Executive (or, in the event of
Executive’s death, to Executive’s wife or his estate, whichever is applicable)
his Pre-Tax Bonus under paragraph “4.b.” 
However, in the event that the Term of this Contract ends on a date
other than December 31, then, for the calendar year during which the Term of
this Contract terminates, Company shall pay to Executive or his estate his “Proportionate Share” of such Pre-Tax Bonus.
For this purpose, his “Proportionate Share”
will be a fraction the numerator of which is the number of days in such
calendar year ending with the end of the Term of this Contract and the
denominator of which is the total number of days in such calendar year. The
final payment of such Proportionate Share shall be paid to Executive (or, in
the event of death, to Executive’s spouse or his estate, whichever is
applicable) no later than twenty (20) days after receipt of Company’s audit. Notwithstanding
the foregoing, in the event payments are being

 

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made to
Executive on account of a Change in Control based upon a hostile takeover of
Company, the Pre-Tax Bonus under paragraph “4.b.” shall be determined based
upon the highest pre-tax earnings of Company in the three calendar years
immediately preceding the calendar year in which termination occurs;

 

c.               During the remainder of the Term of this
Contract, Company shall keep in full force and effect all of those fringe
benefits referred to above in paragraph “5.b.” (“Medical Benefits”), “5.c.” (“Insurance”),
and 5.d.” (“Dental Benefits”). With regard to Key-man insurance policies of any
kind on the life of Executive under paragraph “6.” of this Contract, Executive may, at any time during the remainder of the Term of this
Contract, elect (by written notice given to Company) to have Company transfer
to Executive whatever ownership rights Company may have in any such policy or
policies for a consideration of Ten Dollars ($10) plus any cash value that may
exist under such policies. If, at the time of Executive’s cessation of his
performance of his duties as provided under paragraph “3.” above (other than
termination by Company for Cause), Company was providing an automobile to
Executive under paragraph “5.e.” above, Company will, not later than by March
15 following the end of the calendar year in which Executive’s employment
terminates, for a consideration of Ten Dollars ($10) cash paid to Company: (i)
if Company owned the automobile, Company shall transfer the title (free and
clear of any liens or other encumbrances) to Executive along with any insurance
coverage (if assignable), Executive  understanding
that such “bargain” transaction may generate taxable income; and (ii) if
Company was leasing such automobile, Company shall assign to Executive all of
its right, title, and interest in and to such lease (and, upon termination of
such lease, purchase the leased auto pursuant to the lease agreement and convey
ownership thereof free and clear of all security interests, liens, or other
encumbrances to Executive or his beneficiary or estate);

 

d.              Sec. 416(i) of the Code defines “key
employee” as meaning an employee who, at any time during the year, is:  (i) an officer having an annual compensation
greater than $130,000; (ii) a five percent owner of the employer; or (iii) a
one percent owner of the employer having an annual compensation from the employer
of more than $150,000. Sec. 409A of the Code provides that deferred
compensation benefits payable as a result of termination of employment cannot
be made to “key employees” of publicly-traded corporations or their
subsidiaries prior to the date that is six (6) months after the employee’s separation
from service. Accordingly, notwithstanding what is stated in subparagraphs “a.”
through “c.” above, in the event any of such payments are to be made as a
result of Executive’s termination of employment at a time when Executive is a “key
employee” (as defined above) of Company, then the amount so owing shall accrue
but shall not be physically paid until at least six (6) months following
Executive’s separation from service, but only to the extent required under Sec.
409A of the Code and authoritative guidance thereunder.

 

e.               Notwithstanding what is stated in
subparagraphs “a.” through “c.” above, in the event any of such payments are
subject to Sec. 409A of the Code, the payment of such amounts will be modified
in order to be exempt from Sec. 409A to the extent possible, otherwise to be in
compliance with Sec. 409A, and that the parties understand and agree that the
Contract will be amended as needed in order to specify the particular payment’s
requirements and limitations as modified. For example, in the event that, at
the time of Executive’s termination of employment, he is deemed to be a “key
employee” (see subparagraph “d.” above), then the full amounts of deferred
compensation which could not be paid during the first six months following the
date of termination shall be paid in the seventh month following the date of
termination. However, in the event of any such modification and/or amendment
which has the effect of reducing the economic benefit receivable by Executive
under this Contract, Company shall pay to Executive a reimbursement amount
which will have the effect of offsetting (on an after-tax basis) the amount of
such economic benefit lost.

 

f.                 Upon failure to make any payment as above
provided, which failure continues uncorrected for ten (10) days after receipt
of written demand by Executive (or Executive’s legal representative), Executive
(or Executive’s legal representative) may by notice in writing declare all
future payments under this Contract to be immediately due and payable, and such
amounts

 

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shall bear
interest from the date of receipt of such written declaration at the maximum
legal rate then in effect until such amount is paid in full; and

 

g.              Executive shall not be required to mitigate
the amount of any payment provided for in this paragraph “9” by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
this paragraph be reduced by any compensation earned by Executive as the result
of self-employment or employment by another employer.

 

10.         Disclosure
of Confidential Information; Covenant Not To Compete. Company and its affiliates possess secret
and confidential equipment, techniques, processes, procedures, technical data
and information, and customer lists used or intended for utilization in its
operations of which Executive has obtained or may obtain knowledge, and Company
and its affiliates would suffer serious harm if this confidential information
were disclosed or if Executive used this information to compete against Company
or its affiliates. Further, Executive in the performance of services hereunder
may develop or conceive new and additional inventions and improvements with
respect to such matters. Accordingly, Executive hereby agrees that simultaneously
with the execution of this Contract he shall execute and deliver to Company and
thereafter abide by the terms of a “Confidentiality
Agreement and Covenant Not to Compete” and “Disclosure and Invention Agreement,”
copies of which are attached hereto respectively as Exhibits “B” and “C”
and incorporated herein by reference.

 

11.         Remedies. Executive agrees that in the event of his
breach of his covenants and agreements contained or referenced in this
Contract, the sole remedy of Company shall be to obtain injunctive or similar
relief from an arbitrator or a court of competent jurisdiction in aid of
arbitration.

 

12.         Notices. All notices allowed or required to be given
hereunder must be in writing and dispatched by United States certified mail,
return receipt requested, to the address of the party entitled to such notice
shown at the end of this Contract. Either party hereto may change the address
to which any such notice is to be addressed by giving notice in writing to the
other party of such change. Any time limitation provided for in this Contract
shall commence with the date that the party actually receives such written
notice, and the date or postmark of any return receipt indicating the date of
delivery of such notice to the addressee shall be conclusive evidence of such
receipt.

 

13.         Assignment. Neither Executive nor anyone claiming under
him may commute, encumber, or dispose of the right to receive benefits
hereunder. Such right to receive benefits hereunder is expressly declared to be
non-assignable and non-transferable by Executive, and in the event of any
attempted assignment or transfer, Company shall have no further liability
hereunder; provided, however, the foregoing shall not apply to assignments by
operation of law, such as to a guardian, or to an executor of Executive’s
estate or pursuant to the agent’s attorney-in-fact under a valid power of
attorney.

 

14.         Waiver. The waiver by Company of Executive’s breach
of any provision hereof shall not operate or be construed as a waiver of any
subsequent breach by Executive.

 

15.         Binding
Effect. This
Contract will be binding upon the parties hereto and their heirs, successors,
executors, administrators, personal representatives, and assigns. Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or
assets of Company, by agreement in form and substance satisfactory to
Executive, to expressly assume all of the obligations and liabilities of Company
set forth in this Contract. Failure of any to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this Contract and
shall entitle Executive to compensation from Company in the same amount and on
the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason. As used in this Contract, the term “Company” will mean Supreme Industries,
Inc, its subsidiaries and affiliates, and any successor or successors thereto
of its or their business and/or assets as provided in this paragraph “15.” or
which otherwise becomes bound by all the terms and provisions of this Contract
by operation of law.

 

16.         Indemnification. Company shall indemnify, defend, and hold
harmless Executive from any damages, losses, costs, or expenses, including
reasonable attorneys’ fees and expenses, incurred or suffered

 

6

 

by Executive
as an officer or director of Company to the fullest extent that Company is
permitted by law. This indemnification shall be in addition to that
indemnification protection already provided to Executive under one certain
Indemnification Agreement dated October 15, 1997. Without the prior written
consent of Executive in each instance (which Executive agrees not to
unreasonably withhold), Company shall not, during the Term of this Contract and
for a period of five years thereafter, further modify provisions of its
Articles of Incorporation or Bylaws which deal with the indemnification of
officers and directors or the purchase and maintenance of directors and
officers liability insurance. Company agrees to advance all expenses, including
but not limited to, reasonable attorneys’ fees, as and when such expenses are
incurred by Executive. In addition, Company agrees to continue to maintain at
its sole cost and expense for so long as Executive is an officer or director of
Company and for a period of six years thereafter, Directors and Officers
liability insurance in amount and with coverage not less than currently
provided as of the date of this Contract.

 

17.         Survival
of Provisions. All
provisions of this Contract, including all representations, warranties,
covenants, and agreements contained or referenced herein, will survive the
execution and delivery hereof and any investigation of the parties with respect
thereto. The provisions of paragraphs “10.” and “11.”, and Exhibits ”B” and “C,” will survive the
termination or amendment of this Contract.

 

18.         Validity. If any provision of this Contract is held by
a court of law to be illegal or unenforceable, the remaining provisions of the
Contract will remain in full force and effect. In lieu of such illegal or
unenforceable provision, there shall be added automatically as a part of this
Contract a provision as similar in terms to such illegal or unenforceable
provision as may be possible and be legal and enforceable.

 

19.         Amendments. This Contract may be amended at any time
and from time to time in whole or in part by an instrument in writing setting
forth the particulars of such amendment and duly executed by Company and
Executive.

 

20.         Duplicate
Originals. This
Contract has been executed in duplicate originals, each of which for all
purposes is to be deemed an original, and all of which constitute, collectively,
one agreement; but in making proof of this Contract, it will not be necessary
to produce or account for more than one such duplicate.

 

21.         Captions. The captions or section headings of this
Contract are provided for convenience and shall not limit or affect the
interpretation of this Contract.

 

22.         Arbitration. Any dispute or controversy arising under or
in connection with this Contract, or the breach thereof, shall be settled
exclusively by arbitration before a single arbitrator administered by the American
Arbitration Association in New York, New York, in accordance with its rules
applicable to employment disputes then in effect as supplemented by its large,
complex case procedures. If Executive is the prevailing party, the arbitrator
shall add to the award the reasonable attorneys’ fees and expenses incurred by
Executive.

 

23.         Governing
Law. This Contract
has been made in, and its validity, interpretation, construction, and
performance shall be governed by and be in accordance with, the laws of the
State of Delaware, without reference to its laws governing conflicts of law.

 

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24.         Complete
Understanding. This
Contract constitutes the complete understanding between the parties hereto,
except as otherwise expressly provided or referenced herein, with respect to
the employment of Executive. This Contract supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.

 

Signed to be effective
January 1, 2005.

 

	
  COMPANY:

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUPREME
  INDUSTRIES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W. Wilson

  	
   

  	
  /s/ William J. Barrett

  	
   

  
	
   

  	
   

  	
  Robert W. Wilson

  	
  William J. Barrett

  
	
   

  	
   

  	
  Executive Vice President

  	
  636 River Road

  
	
   

  	
   

  	
  P. O. Box 237

  	
  Fair Haven, NJ 07704

  
	
   

  	
   

  	
  2581 E. Kercher Road

  	
   

  
	
   

  	
   

  	
  Goshen, IN 46527-0237

  	
   

  
							

 

8

 

Exhibit “A”

to

Employment Contract

 

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 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.

 

1

 

(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 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,

 

2

 

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

 

Exhibit “B”

to

Employment Contract

 

Confidentiality Agreement and

Covenant Not To Compete

 

William J. Barrett (hereafter called “Executive”)
has entered into an Employment Contract with Supreme
Industries, Inc., a Delaware corporation (hereafter called “Company”), which is in the business
(through a wholly-owned subsidiary, Supreme Corporation) of manufacturing and
selling specialized truck bodies. Whenever used herein the word “Company” shall
be deemed to include Supreme Corporation and the other affiliates of Supreme
Industries, Inc.

 

By signing this Agreement,
Executive acknowledges his understanding of the following:

 

A.                                   All companies have information, generally not
known outside the company, called “confidential
information.” All companies must conduct their businesses through
their executives, and consequently many executives must have access to
confidential information. At times Executive himself may generate confidential
information as a part of his job;

 

B.                                     The phrase “confidential
information” as used in this Agreement includes information known
as, referred to, or considered to be, trade secrets, and comprises, without
limitation, any technical, economic, financial marketing, computer program,
computer software, computer data (regardless of the medium on which they are
stored), computer source and object programs or codes, job operating control
language procedures, data entry utility programs, sorts, and miscellaneous
utilities, disk record layouts, flow charts, data entry input forms, operations
and installation instructions, report samples, data files, printouts, or other
information about Company or its business which is not common knowledge among
competitors or other companies who might like to possess such confidential
information or might find it useful. Some examples of confidential information
include customer lists, price lists, items in research or development, methods
of manufacture, scientific studies or analyses, details of training methods,
new products or new uses for old products, merchandising and selling
techniques, contracts and licenses, purchasing, accounting, long-range
planning, financial plans and results, computer programs and operating manuals,
computer source codes, and any other information affecting or relating to the
business of Company, its manner of operation, its plans or processes. This list
is merely illustrative and the confidential information covered by this Agreement
is not limited to such illustrations; and

 

C.                                     Company’s confidential information, including
information referred to as, known as, or considered to be, trade secrets,
represents the most important, valuable, and unique aspect of Company’s
business, and it would be seriously damaged if Executive breached the position
of confidential trust in which Company has placed him by disclosing such
confidential information to others or by departing and taking with him the
aforesaid unique information compiled over a period of time for the purpose of
himself competing against Company or disclosing such information to Company’s
competitors, now existing or hereafter formed.

 

Accordingly, in
consideration of ONE DOLLAR paid to Executive by Company, the receipt and
sufficiency of which are hereby acknowledged, and Company’s agreement to employ
him, Executive agrees as follows (which will constitute an agreement ancillary
to Executive’s Employment Contract with Company):

 

1.                                       Confidential information, including information
referred to as, known as, or considered to be, trade secrets, is proprietary to
Company. Executive agrees to hold such information in strictest confidence, and
not to make use thereof except in performance of duties under the Employment
Contract. Whether during or after his employment with Company, Executive may
not disclose to others (excepting

 

1

 

Company
officers or executives having a need to know who have also signed a written
agreement expressly binding themselves not to use or disclose it) any
confidential information originated, known to, or acquired by Executive while
employed by Company. Executive further agrees during such period not to remove
from the premises any of Company’s records or other written or tangible
materials, including without limitation computer programs and floppy disks
(whether prepared by Executive or others) containing any confidential
information, except as required for Executive to properly perform his duties as
an Executive of Company. Exceptions to these restrictions may be made only by
means of Company’s permission given in writing signed by the Chairman of the
Board of Directors of Company pursuant to an affirmative approval by a majority
of Supreme Industries, Inc.’s Board of Directors granting permission to
disclose.

 

2.                                       During a period of three (3) years following
the cessation of Executive’s employment with Company, Executive covenants that
Executive, either individually or in any capacity, including without limitation,
as an agent, consultant, officer, shareholder, or Executive of any business
enterprises or person with which he may become associated or in which Executive
may have a direct or indirect interest, shall not, directly or indirectly for
himself or on behalf of any other person or business entity, engage in any
business venture or other undertaking which is directly or indirectly
competitive with the business or operations of Company (and/or any of its
subsidiaries) as generally conducted at, or prior to, the cessation of
Executive’s employment with Company. Without limiting the generality of the
foregoing, Executive shall not (i) so compete with Company or its subsidiaries,
(ii) be employed by, (iii) be an affiliate (as defined by Securities and
Exchange Commission Rule 405 under the Securities Act of 1933), (iv) perform
any services for, or (v) have an equity or ownership interest in, any person,
firm, partnership, joint venture, or corporation that so competes, directly or
indirectly, with Company or any of its subsidiaries. Further, Executive will
not solicit for employment or advise or recommend to any other person that such
person employ, or solicit for employment, any executive of Company or any of
its subsidiaries who was an executive at, or prior to, the cessation of
Executive’s employment with Company. The foregoing covenant not to compete
shall be limited to a territory consisting of those states in which Company had
manufacturing facilities as of the time of cessation of Executive’s employment
with Company. If for any reason any court of competent jurisdiction finds these
covenants to be unreasonable in duration or geographic scope, the prohibitions
herein contained shall be restricted to such time and geographic areas as such
court determines to be reasonable and enforceable. However, the restrictions
stated above will not apply if Company liquidates or if Executive becomes
employed by a company (or its affiliate) which acquires (in a voluntary
transaction) the stock or business assets of Company, or if Executive is
terminated without Cause or terminates for Good Reason.

 

3.                                       Executive understands and agrees that his
violation of any of the provisions of this Agreement will constitute
irreparable injury to Company immediately authorizing it to enjoin Executive or
the business enterprise with which he may have become associated from further
violations, in addition to all other rights and remedies which Company may have
under law and equity, including recovery of damages from Executive and a right
of offset.

 

4.                                       Each party shall be entitled to receive from
the other party reimbursement of attorney’s fees and related legal costs to the
extent incurred in connection with the successful enforcement or defense, as
the case may be, of the terms and conditions hereof.

 

5.                                       The waiver by Company of Executive’s breach
of any provision hereof shall not operate or be construed as a waiver of any
subsequent breach by Executive. This Agreement shall be binding upon the
parties hereto and their heirs, successors, executors, administrators, personal
representatives, and assigns. Executive may not assign to any person his
covenants, obligations and duties hereunder. All provisions of this Agreement
shall survive the termination or amendment of Executive’s Employment Contract.

 

6.                                       If any provision of this Agreement is held by
a court of law to be illegal or unenforceable, the remaining provisions of the
Agreement shall remain in full force and effect. In lieu of such illegal or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal or unenforceable
provision as may be possible and be legal and enforceable.

 

2

 

7.                                       This Agreement has been made in, and its
validity, interpretation, construction, and performance shall be governed by
and be in accordance with, the laws of the State of Delaware, without reference
to its laws governing conflicts of law. Any dispute or controversy arising
under or in connection with this Agreement, or the breach thereof, shall be
settled in accordance with the arbitration provision in the Employment
Contract.

 

Signed to be effective
January 1,  2005.

 

	
   

  	
   

  	
  /s/ William J. Barrett

  	
   

  
	
   

  	
   

  	
  William J. Barrett

  
	
   

  	
   

  	
  636 River Road

  
	
   

  	
   

  	
  Fair Haven, NJ 07704

  
	
   

  	
   

  	
   

  
	
  ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUPREME INDUSTRIES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W. Wilson

  	
   

  	
   

  
	
   

  	
   

  	
  Robert W. Wilson

  	
   

  
	
   

  	
   

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  	
  P. O. Box 237

  	
   

  
	
   

  	
   

  	
  2581 E. Kercher Road

  	
   

  
	
   

  	
   

  	
  Goshen, IN 46527-0237

  	
   

  
							

 

3

 

Exhibit “C”

to

Employment Contract

 

Disclosure and Invention Agreement

 

William J. Barrett (hereafter called “Executive”)
has entered into an Employment Contract with Supreme
Industries, Inc., a Delaware corporation (hereafter called “Company”), which is in the business
(through a wholly-owned subsidiary, Supreme Corporation) of manufacturing and
selling specialized truck bodies. Whenever used herein the word “Company” shall
be deemed to include Supreme Corporation and the other affiliates of Supreme
Industries, Inc.

 

In consideration of TEN
DOLLARS ($10.00) paid to Executive by Company, the receipt and sufficiency of
which are hereby acknowledged, and Company’s agreement to employ him pursuant
to an Employment Contract (to which this Exhibit
“C” is attached) between Company and Executive the provisions of
which are herein fully incorporated by reference for all purposes, Executive
agrees as follows:

 

1.                                       Executive shall communicate to Company
promptly and fully all ideas and the expressions thereof, conceptions,
improvements, discoveries, methods, techniques, processes, adaptations,
creations, and inventions (whether patentable or copyrightable or not)
conceived or made by Executive (whether solely by Executive or jointly with
others) (“Ideas”) from the time
of entering Company’s employment until one year after Executive’s employment is
terminated for any reason, or Executive resigns or retires for any reason, (a)
which involve or pertain to, directly or indirectly, the business, assets, activities,
computers or computer programs, or investigations of Company as existed at or
prior to the cessation of Executive’s employment by Company, or (b) which
result from or are suggested by any work which Executive or other executives or
independent contractors perform for or on behalf of Company, in whole or in
part, as existed at or prior to the cessation of Executive’s employment by
Company.

 

2.                                       Executive shall assist Company during and
subsequent to Executive’s employment in every proper way (solely at Company’s
expense) to obtain patents and/or copyrights for its own benefit in any or all
countries of the world, and to sign all proper papers, patent applications,
assignments, and other documents necessary for this purpose, it being
understood that such Ideas will remain the sole and exclusive property of
Company, and shall not be disclosed to any person, nor used by Executive,
except as expressly permitted herein.

 

3.                                       Written records of Executive’s Ideas in the
form of notebook records, sketches, drawings or reports, will remain the
property of and be available to Company at all times.

 

4.                                       Executive represents that Executive has no
agreements with or obligations to others in conflict with the foregoing.

 

5.                                       Executive understands that this Agreement may
not be modified or released except in writing signed by all members of Company’s
Board of Directors.

 

6.                                       Executive understands and agrees that his
violation of any of the provisions of this Agreement will constitute
irreparable injury to Company immediately authorizing it to enjoin Executive or
the business enterprise with which he may have become associated from further
violations, in addition to all other rights and remedies which Company may have
at law and equity, including recovery of damages from Executive and a right of
offset. Each party shall be entitled to recover from the other party
reimbursement of attorney’s fees and related legal costs to the extent incurred
in connection with the successful enforcement or defense, as the case may be,
of the terms of conditions hereof.

 

7.                                       This Agreement shall be binding upon the
parties hereto and their respective heirs, successors, executors,
administrators, personal representatives, and assigns. Executive may not assign
his

 

1

 

covenants,
duties, or obligations hereunder to any other person. The waiver by Company of
Executive’s breach of any provision hereof shall not operate or be construed as
a waiver of any subsequent breach by Executive.

 

8.                                           If any provision of this Agreement is held by
a court of law to be illegal or unenforceable, the remaining provisions of the
Agreement shall remain in full force and effect. In lieu of such illegal or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal or unenforceable
provision as may be possible and be legal and enforceable.

 

9.                                           This Agreement has been made in, and its
validity, interpretation, construction, and performance shall be governed by
and be in accordance with, the laws of the State of Delaware, without reference
to its laws governing conflicts of law. Any dispute or controversy arising
under or in connection with this Agreement, or the breach thereof, shall be
settled in accordance with the arbitration provision in the Employment
Contract.

 

Signed to be effective
January 1, 2005.

 

	
   

  	
   

  	
  /s/ William J. Barrett

  	
   

  
	
   

  	
   

  	
  William J. Barrett

  
	
   

  	
   

  	
  636 River Road

  
	
   

  	
   

  	
  Fair Haven, NJ 07704

  
	
   

  	
   

  	
   

  
	
  ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUPREME INDUSTRIES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W. Wilson

  	
   

  	
   

  
	
   

  	
   

  	
  Robert W. Wilson

  	
   

  
	
   

  	
   

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  	
  P. O. Box 237

  	
   

  
	
   

  	
   

  	
  2581 E. Kercher Road

  	
   

  
	
   

  	
   

  	
  Goshen, IN 46527-0237

  	
   

  
							

 

2Exhibit 10.1

 

SEVERANCE AGREEMENT 

AND MUTUAL GENERAL RELEASE OF CLAIMS

 

THIS
SEVERANCE AGREEMENT AND MUTUAL GENERAL RELEASE OF CLAIMS (“AGREEMENT”)
is being entered into between and among Pelican National Bank, N.A. (“Employer”),
Pelican Financial, Inc. (“PFI”) and Howard B. Montgomery, Jr. (“Employee)
(collectively the “Parties”) as of February 10, 2006.  

 

Background

 

Employer and
Employee are parties to an Employment Agreement dated as of August 1, 2004
(“Employment Agreement”).  PFI owns all
of the issued and outstanding stock of Employer.  The Parties mutually desire to terminate the
employment of the Employee and the respective obligations of the Parties under
the Employment Agreement on the terms and conditions set forth in this
Agreement.

 

NOW,
THEREFORE, in
consideration of the mutual promises, agreements and representations contained
herein, and intending to be legally bound hereby, the Parties agree as follows:

 

1.             Termination of Employment. 
Employee’s employment with the Employer shall terminate by mutual
consent effective as of the close of business on February 10, 2006 (the “Effective
Time”), at which time the Employment Agreement shall terminate and be null and
void and of no further force or effect.

 

2.             Severance.  In consideration for this Agreement and
Employee’s general release of claims hereunder, Employer shall do the following
no sooner than the eighth (8th) day
following Employee’s signing of this Agreement,
providing Employee does not revoke this Agreement:

 

 

a.                                       In lieu of amounts that are due or which may become due
under Section 3.4, Section 8.0 and Section 9.0 of the Employment
Agreement, Employer shall pay to the Employee a special lump sum severance
payment in the gross amount of $482,500 on or before February 24,
2006.  The Employer shall deduct from
this severance pay all normal tax withholdings and deductions which Employer is
required by law to make.

 

b.                                      Employer shall pay to the Employee the Employee’s base
salary through the Effective Time on or before February 24, 2006.  All other compensation due to the Employee
pursuant to the other provisions of the Employment Agreement (including but not
limited to sections 3.1, 3.2, 3.3, 3.5 through 3.7) is set forth on Exhibit A
attached hereto and shall be paid to the Employee on or before February 24,
2006.  The Employer shall deduct from
this compensation all normal tax withholdings and deductions which Employer is
required by law to make.

 

c.                                       Employer shall continue to provide to Employee all benefits
and compensation to which Employee may be entitled to under the Employer’s
401(k) plan, heath insurance plan, deferred compensation plan and other benefit
plans to the extent required under applicable law or the terms of such plan.

 

d.                                      Employee understands that he shall receive no other  wages, bonus, commissions or any other
payments or benefits from Employer other than as set forth in this Agreement.

 

e.                                       Anything in this Agreement to the contrary notwithstanding,
Employee shall have the right, in his sole and absolute discretion, to reduce
the amounts payable hereunder to the extent that such payments would subject
Employee to excise tax under Section 4999 of the Internal Revenue Code and
the regulations thereunder.

 

3.             Options.  PFI has
previously granted Employee options to purchase 50,000 shares of PFI common
stock at an exercise price of $5.07 per share (the “Options”) pursuant to PFI’s
1997 Stock Option and Incentive Plan (the “Plan”).  Anything to the contrary notwithstanding in
the Plan or the form of agreement evidencing the Options, PFI agrees that: (a) the
Options shall not expire prior to the close of business on August 2, 2015,
the original expiration date of the Options (the “Expiration Date”) and (b) the
Options shall be exercisable in full at any time beginning on the date hereof
and ending at the close of business on the Expiration Date.

 

2

 

Employee,
Employer and PFI each expressly acknowledges and agrees to the termination of
such Options and settlement in cash in accordance with and as contemplated in
the Agreement and Plan of Reorganization among Stark Bank Group, Ltd, SBG II,
Ltd., and Pelican Financial, Inc. dated November 30, 2005.

 

4.             Employee Release. 
In consideration of the payments and other benefits described above in
Paragraph 2 and Paragraph 3, effective at the Effective Time, Employee hereby
unconditionally releases and completely and forever discharges Employer and
PFI, on behalf of and for the benefit of each of them, their officers,
directors, partners, shareholders, agents, attorneys, employees, successors and
assigns (“Employer Released Parties”), from any and all rights and claims that
he may have based on or relating to the Employment Agreement, Employee’s
employment with the Employer or the termination of that employment for any and
all reasons.  Employee specifically
releases the Employer Released Parties from any rights or claims which Employee
may have based upon the Age Discrimination in Employment Act, which prohibits
age discrimination in employment; Title VII of the Civil Rights Act of 1964, as
amended, which prohibits discrimination in employment based on race, color,
creed, national origin or sex; the Equal Pay Act, which prohibits paying men
and women unequal pay for equal work; the Americans with Disabilities Act of
1990, which prohibits discrimination against disabled persons; the Employee
Retirement Income Security Act, which regulates employment benefits; the
Florida Civil Rights Act of 1992; or any other federal, state or local laws or
regulations prohibiting employment discrimination or which otherwise regulate
employment terms and conditions. 
Employee also releases the Employer Released Parties from any claim for
wrongful discharge, unfair treatment, breach of public policy, express or implied
contract, or any other claims arising under common law which relate in any way
to Employee’s employment with

 

3

 

the
Employer or the termination thereof. 
This release covers claims that Employee knows about and those that  may not know about up through the date of
this Agreement.  This Release
specifically includes any and all claims for attorney’s fees and costs which
are incurred by Employee for any reason arising out of or relating to any or
all matters covered by this Agreement. This release does not cover: (a) any
obligations of Employer and/or PFI under this Agreement or the Options, (b) any
obligations of Employer and/or PFI under benefit plans and (c) any claims
that Employee may make for unemployment compensation benefits.

 

5.             Employer and PFI Release. 
In consideration of the Employee’s release set forth in Paragraph 4,
effective at the Effective Time, Employer and PFI, for itself and its Employer
Released Parties, each hereby unconditionally releases and completely and
forever discharges Employee, on behalf of and for the benefit of Employee, his
estate, executors, administrators, beneficiaries, heirs, successors and assigns
(“Employee Released Parties”), from any and all rights and claims that any of
them may have based on or relating to the Employment Agreement, Employee’s
employment with the Employer or the termination of that employment for any and
all reasons.  This release covers claims
that any of the Employer Released Parties know about and those that  they may not know about up through the date
of this Agreement.  This release
specifically includes any and all claims for attorney’s fees and costs which
are incurred by any of the Employer Released Parties for any reason arising out
of or relating to any or all matters covered by this Agreement. This release
does not cover any obligations of Employee under this Agreement.

 

6.             Certain Representations. 
Each of the Parties represents and warrants to the other that as of the
date of this Agreement, such Party has not filed any charge, claim, complaint,
demand for arbitration or lawsuit against any of the other Parties nor has such
Party allowed any

 

4

 

other
person or entity acting on such Party’s behalf to do so based on any of the
claims released herein.

 

7.             Attorney’s Fees. 
The Parties recognize that nothing herein is meant to preclude any Party
from recovering attorney’s fees or costs specifically authorized under federal
or state law in any subsequent litigation between the Parties.

 

8.             Additional Obligations of Employee.  In conjunction with the execution of this
Agreement and for the consideration received herein, Employee further agrees as
follows:

 

a.                                       Subject to his availability and schedule, during normal
business hours, to cooperate fully with any reasonable request of Employer or
PFI to provide truthful information and/or materials to them or to otherwise
assist any of them in matters relating to the performance of his former duties
and the defense of any litigation or disputes arising or based upon actions
occurring during the course of his employment. 
Employee shall provide 80 hours of such service without additional
compensation and shall be compensated at the rate of $80.00 per hour for every
hour in excess of 80 hours and will be paid any reasonable, documented expenses
which he incurs in performing such duties; and

 

b.                                      To maintain the confidentiality of all proprietary
information of Employer in accordance with the terms of  Section 4.1 and Section 4.2 of the
Employment Agreement.

 

9.             Additional Obligations of Employer and PFI.    In conjunction with the execution of this
Agreement and for the consideration received herein,  Employer and PFI each agree that it shall
continue to indemnify, defend and hold harmless Employee to the fullest extent
provided by  applicable law, the charter
or bylaws of Employer and/or PFI as in existence on the date hereof or under
any agreement, understanding or arrangement with Employer and/or PFI in existence
on the date hereof.

 

5

 

10.           Non-Disparagement.  Each Party agrees not to make any statement,
whether oral or written, which in any way disparages the other.  A violation of this Paragraph shall
constitute a material breach of this Agreement.

 

11.           Advice
of Counsel.  Each Party
represents that they consulted with an attorney before signing this Agreement.

 

12.           Review
Period.  Employee
understands that he is being given a period of 21 days to review and consider
this Agreement before signing it. 
Employee understands that he may use as much of such period as he wishes
prior to signing it.

 

13.           Right
of Rescission.   Employee
may revoke this Agreement within seven (7) days of his signing it.  Revocation can be made by delivering a
written notice of revocation to Pelican National Bank, N.A. Attention: Ken
Aschom  at  811 Anchor Road, Naples, Florida  34104.  
For this revocation to be effective, written notice must be received by Mr. Aschom
no later than the close of business on the seventh (7th) day after
Employee signs the Agreement.  If
Employee revokes this Agreement, it shall not be effective and enforceable and
Employee will not receive the consideration contained in Paragraphs 2  or 3 or any other consideration set forth
herein.

 

14.           No
Admission.  By entering
into this Agreement, no Party admits, and each Party  expressly denies,  that such Party has violated any contract,
rule, law or regulation, including, but not limited to, any federal, state or
local law or regulation relating to employment or employment discrimination.

 

15.           Entire
Agreement.  This
Agreement, and the Options as modified herein, are the entire agreements
between Employee, PFI and Employer and any other prior agreements between or
among Employer and/or PFI, on the one hand, and Employee, on the other hand,
are

 

6

 

hereby
terminated and shall have no other force or effect.  No Party has made any promises to the other
Parties other than those set forth in this Agreement.  This Agreement may be modified only upon an
express written agreement among the Parties.

 

16.           Governing
Law.  This Release will be
governed and construed in accordance with the laws of the State of Florida
without regard to principles of conflicts of laws.

 

17.           Invalidity
of Agreement Provision. 
The invalidity or unenforceability of any provision of this Agreement,
whether in whole or in part, shall not in any way affect the validity or
enforceability of any other provision contained herein.

 

18.           Neutral
Construction.  In view of
the fact that each of the parties hereto have been represented by their own
counsel and this Agreement has been fully negotiated by all parties, the legal
principle that ambiguities in a document are construed against the draftsperson
of that document shall not apply to this Agreement.

 

19.           Parties
in Interest.  This
Agreement shall bind, benefit, and be enforceable by parties and their
respective successors, legal representatives, permitted assigns, heirs,
executors, administrators and personal representatives.

 

20.           Section Headings;
References.  Section and
subsection headings in this Agreement are for convenience of reference
only, and shall neither constitute a part of this Agreement nor affect its interpretation.  All words in this Agreement shall be
construed to be of such number and gender as the context requires or permits.

 

21.           Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original hereof, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one counterpart hereof.

 

7

 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

 

8

 

22.           Employee
Acknowledgement.  EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT,
UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT.  EMPLOYEE UNDERSTANDS AND AGREES THAT THIS
AGREEMENT CONTAINS A GENERAL RELEASE OF CLAIMS RELATING TO HIS EMPLOYMENT AND
THE TERMINATION OF THAT EMPLOYMENT AGAINST ALL EMPLOYER RELEASED PARTIES.

 

IN
WITNESS WHEREOF,
and intending to be legally bound, the Parties agree to the terms of this
Agreement.

 

	
  Date:

  	
  Pelican National Bank, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 10, 2006

  	
  By: 

  	
  s/s
  Kenneth Aschom

  	
   

  
	
   

  	
  Print name and title: Kenneth
  Aschom, CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  Pelican Financial, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 10, 2006

  	
  By:

  	
  Charles C. Huffman

  	
   

  
	
   

  	
  Print name and title: Charles C. Huffman,

  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  Employee:

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 10, 2006

  	
  s/s
  Howard B. Montgomery,

  	
   

  
	
   

  	
  Howard
  B. Montgomery, Jr.

  
						

 

9

 

Exhibit A

 

Vacation pay for 2005 - $0.00 (none)

 

10

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