Chief Operating Officer Employment Agreement

June 8, 2005


Mr. Lawrence Wexler 393 Carter Street New Canaan, CT 06840


RE: EMPLOYMENT TERMS


Dear Larry:


I am pleased to offer you the position of Chief Operating Officer ("COO") of North Atlantic Trading Company, Inc. In this position and at this time, you will report to me as Chief Executive Officer. This position will have the responsibilities typical of a COO, including supervision of sales, marketing, and manufacturing. Additional responsibilities may be added at the Company's discretion from time to time, without written modification of this Agreement. This position will require significant travel, primarily to our Louisville facilities. It is expected that you will be traveling or away from your New York/Connecticut area work station approximately 50% of business days. You will not be required to relocate your residence from your current home.


In accordance with our discussions, I have outlined below the principal terms and conditions of your employment. This letter, when signed by you, will represent your Employment Agreement:


Commencement Date: June 8, 2005. You will be employed for an indefinite
term, and the provisions of this Agreement shall
remain in effect until such time as modified by
mutual written agreement or until your employment is
severed under one of the conditions set forth below.


Base Salary: $385,000 per annum, paid in accordance with the
Company's regular payroll cycle and policies.


Bonuses: You will be a participant in the Company's
Management Bonus Program under which you will be
eligible for a bonus of up to 50% of your then
current annual base salary.


In respect of fiscal year 2005, $50,000 of your
bonus will be earned if the Company's EBITDAR is
greater than or equal to an amount established by
the CEO in consultation with you, $50,000 will be
tied to the achievement of certain objectives
established by the CEO in consultation with you, the
achievement of which will be determined by the CEO
in his reasonable discretion, and the remainder of
your potential performance bonus will be based upon
the Company exceeding the EBITDAR target and
objectives so established, the successful strategic
repositioning of Company brands and the Company's
financial outlook for 2006, as determined by the CEO
in his reasonable discretion.


Bonuses for any year are paid after the completion
of the year-end audit for such year and upon the
recommendation of the CEO, at his discretion, and
after approval by NATC's Board of Directors. In
general, you must remain an employee and demonstrate
satisfactory performance through the payment date to
be entitled to receive a bonus.


Stock Options: You agree that you forfeit all stock option rights
granted but not vested prior to this agreement. You
will be issued stock options or restricted stock
under terms no less favorable, including dates of
vesting, than your existing stock option grant to
replace those options you have forfeited. You will
retain the 2,500 options in which you are currently
vested.


Vacations Four (4) weeks of paid vacation, subject to the
Company's policy regarding vacations. Vacation days
do not transfer from one year to the next and no
compensation is paid for unused vacation (except as
may be required by law upon separation from
employment).


Automobile: The Company has currently leased a vehicle for your
use on Company business. You may continue the use of
that vehicle until its lease expires. At that time,
in addition to the right to purchase the vehicle,
the Company will grant you an automobile allowance
of $500 per month, grossed up for state and federal
income taxes only. You will have no other benefits
related to automobile use.


Additional Benefits: You are eligible to join the Company's group benefit
plans under each plan's terms and conditions, such
as the Company's Medical and Dental plans.


Termination: The employment relationship may be severed at any
time, subject to the provisions of the Severance
section below, as follows:


Termination by the Company Without Cause. The
Company may terminate your employment without
"cause" at any time.


Termination for Cause. The Company may terminate
your employment for "cause" at any time, with or
without notice. For purposes of this Agreement,
"cause" shall mean:


Your failure to render required and expected
services in accordance with your obligations under
this Agreement;
...