Al Bailey Employment Agreement

THIS AGREEMENT is made and entered into this ____ day of _______________, 2005, by and between CYCLE COUNTRY ACCESSORIES CORPORATION, an Iowa Corporation, (hereinafter referred to as the "Corporation") and ALAN BAILEY, of Spencer, Iowa, (hereinafter referred to as the "Executive").


WHEREAS the Executive has been an employee of a predecessor to the Corporation and served in the capacity as an officer and President of that predecessor; and


WHEREAS, the Corporation desires to assure themselves the services of the Executive as their employee for a term of sixty (60) months on the terms and conditions set forth herein; and


WHEREAS, the Executive is agreeable to continue in an Executive capacity for said sixty (60) months and is willing to accept and undertake such employment.


NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND MUTUAL COVENANTS HEREIN SET FORTH, THE CORPORATION AND THE EXECUTIVE AGREE AS FOLLOWS:


1. EMPLOYMENT. The Corporation agrees to and does hereby employ the Executive and the Executive agrees to and does hereby accept employment by the Corporation, in the capacity of President for a period of sixty (60) months commencing the ____ day of _______________, 2005 to the ____ day of _______________, 2010.


2. SCOPE OF SERVICES. The Executive shall serve as President of the Corporation. As such, the Executive shall be in full charge of the operations of the Corporation or Corporation's business affairs, subject to the directions of the chairman of the Board of Directors. It is contemplated that the Corporation will be a wholly owned subsidiary of Cycle Country Accessories Corp. (hereinafter referred to as "Cycle


Country"). Upon completion of that transaction Executive will report directly to the Chief Executive Officer of Cycle Country; and will serve in the function of a general manager of that part of Cycle Country that consisted of the Simonsen Iron Works operation before the transaction.


3. FULL-TIME SERVICES. The Executive agrees that during the term of his employment he will (subject to the provisions of Section 6 hereof), devote substantially all of his time and energies, during business hours, to the supervision, management, and conduct of the business affairs of the Corporation. The Executive will faithfully and to the best of his ability, discharge his duties hereunder to the furtherance of the interests of the Corporation. The Executive will not accept other gainful employment, become or remain an officer or director in any other Corporation, except with the consent of the Board of Directors of the Corporation.


4. PLACE OF EMPLOYMENT. The Executive will perform his services hereunder in either Clay County, Iowa or Dickinson County, Iowa.


5. COMPENSATION. For all services to be rendered hereunder by the Executive, the Corporation will pay the Executive (1) basic current compensation; (2) bonus compensation: and (3) fringe benefits, as hereinafter set forth.


A. Basic Current Compensation The Executive shall (except as otherwise provided in Section 6 hereof) receive, during the term of employment, basic current compensation at the rate of $125,000.00 per annum. Said amount shall be payable in equal weekly installments. If Lisa Bailey quits or is terminated by the Corporation as employee at will the basic current compensation shall increase to $150,000.00 per annum on the effective date of Lisa Bailey's termination. In the event the Executive's employment is terminated by death, as provided in Section 7 hereof, the Corporation will continue to pay the


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Executive or his designee, or the executor of his estate, the basic current compensation for a period of three (3) months from the end of the month in which such death occurs. Said amounts shall be payable weekly.


B. Bonus Compensation. In addition to the basic current compensation provided above, the Executive shall receive ...