STIPULATION AND SETTLEMENT AGREEMENT

 Exhibit 10.8

                       IN THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF COLORADO

                           Civil Action No. 97-D-2214

LEE RASMUSSEN,  minority  shareholder of record; DOUG RICHMOND;  JEFF T. COATES;
ERNEST REEVES; VERNON RASMUSSEN;  SHEILA RASMUSSEN;  BEVERLY DITTEMORE;  CHRISTY
OLSEN, minority shareholders in street name;

                  Plaintiffs,

v.

SPURLOCK INDUSTRIES, INC., a Virginia corporation; HAROLD N. SPURLOCK; IRVINE R.
SPURLOCK;  H. NORMAN  SPURLOCK,  JR.;  PHILLIP S. SUMPTER;  WARREN E. BEAM, JR.;
LLOYD PUTMAN, as individuals;

                  Defendants.

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                      STIPULATION AND SETTLEMENT AGREEMENT

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         This derivative  action was commenced  initially by seven owners of the
common  stock  of  Spurlock  Industries,  Inc.,  a  Virginia  corporation  (such
corporation,   its  predecessors,   subsidiaries  and  affiliates,   hereinafter
collectively  referred to as the  "Corporation"),  on behalf of the Corporation,
alleging that the  Corporation had been damaged by the actions of certain of its
current and former directors and asserting that such claims should be pursued on
behalf of the Corporation.  The Corporation was included as a nominal defendant.
An eighth plaintiff was added later.

         Promptly   following   the  filing  of   plaintiffs'   complaint   (the
"Complaint"),   the  Corporation's   board  of  directors  appointed  a  special
litigation committee (the "SLC") consisting of two independent outside directors
who were not named defendants in the Complaint. The

SLC was delegated all of the Board of Directors'  corporate powers and authority
with  respect to the  lawsuit,  including  investigating  the facts  surrounding
plaintiffs'  substantive  allegations;  determining whether maintaining the suit
was in the best interests of the  Corporation  and its  shareholders;  retaining
independent  legal  counsel  to assist the SLC's  investigation;  and taking all
other action that the SLC might deem necessary or appropriate.

         The  SLC   conducted   an   extensive   investigation   of  the  facts,
circumstances  and  transactions  alleged  in  plaintiffs'  Complaint.  The  SLC
examined  and  analyzed   thousands  of  pages  of  documents  produced  by  the
Corporation, interviewed numerous witnesses alleged to have knowledge concerning
the claims set forth in the  Complaint,  and employed an  independent  certified
public accounting firm to conduct an examination of the Corporation's books. The
SLC's  findings as a result of the  investigations  are set out in the Report of
the  Special  Litigation  Committee  of  Spurlock   Industries,   Inc.  and  the
Supplemental Report of the Special Litigation  Committee of Spurlock Industries,
Inc.,  both of which reports have  previously  been filed with the Court in this
action.  The SLC  concluded  that there was merit in certain  claims  which were
implicitly embodied within Claim Three of the Complaint;  and the SLC vigorously
pursued such claims on behalf of the Corporation, resulting in a recovery by the
Corporation  of cash,  a  judgment  and a secured  note  totaling  approximately
$500,000.  The SLC further  concluded  that the remaining  claims alleged in the
Complaint either had no merit or had resulted in no damage to the Corporation.

         The plaintiffs also conducted their own  investigation  and interviewed
potential  witnesses,  and they have  studied the  reports of the SLC.  They are
satisfied with the independence of the SLC and the scope and thoroughness of its
investigations.  Accordingly, on the basis of their factual investigation, their
study of the reports  filed by the SLC,  and their  assessment  of the risks

and hazards of further  litigation,  plaintiffs  have concluded that all damages
which the  Corporation may have suffered by reason of certain matters alleged in
their  Complaint have been recovered by the Corporation and that the Corporation
has suffered no damages as a result of the remaining allegations,  even if those
allegations  could be proved.  Accordingly,  plaintiffs  have  concluded  that a
settlement of the litigation on the terms and conditions  described  below would
be fair,  reasonable and adequate to plaintiffs and to the  Corporation  and its
shareholders.  The defendants,  while denying and disclaiming  wrongdoing of any
kind  whatsoever  and denying any damage to the  Corporation  which has not been
fully repaid to or otherwise  recovered by the  Corporation,  have  nevertheless
agreed to enter into a settlement in order to recognize  plaintiffs'  efforts in
investigating,  filing and prosecuting  this derivative  action which prompted a
thorough  investigation by the SLC and resulted in a recovery by the Corporation
of  approximately  $500,000;  to avoid the  further  expense of  burdensome  and
protracted  litigation;  and  finally to put to rest the claims  which have been
alleged in this litigation.  Moreover,  plaintiffs and defendants desire by this
settlement to  facilitate,  to the extent  feasible,  the potential  sale of the
Corporation  or all or a portion of its assets to persons who have  expressed an
interest in purchasing same.

         IT IS,  THEREFORE,  STIPULATED  AND AGREED by and among the  parties in
this action that this action shall be settled and compromised,  upon approval of
the Court,  after notice to shareholders  and a hearing pursuant to Fed. R. Civ.
P. 23.1,  on the terms and  conditions  set forth below.  This  Stipulation  and
Settlement  Agreement shall hereafter be termed the "Agreement,"  "action" shall
mean the civil action  captioned  above, and certain other terms will be used as
defined in this Agreement.

         1. The  undersigned  represent that they are authorized to execute this
Agreement and to take all steps which this Agreement  contemplates to effectuate
the  settlement  of this action,

and the  parties  agree  that  they will take all  steps  which  this  Agreement
contemplates to effectuate the settlement of this action.

         2. The intent and purpose of this  Agreement are to effect the full and
final  disposition  of: (a) all claims,  rights,  or causes of action  (state or
federal,  including  but  not  limited  to  claims  arising  under  the  federal
securities laws, any rules or regulations promulgated thereunder, or otherwise),
whether known or unknown,  that are,  could have been, or might in the future be
asserted by any of the plaintiffs,  whether on behalf of themselves  directly or
derivatively,  representatively,  or in any other  capacity,  against any of the
defendants, including the Corporation, (regardless of whether any such defendant
has been served or entered an  appearance  in this action) and their  respective
present or former directors,  officers,  employees, general and limited partners
and  partnerships,  principals,  agents,  attorneys,  subsidiaries,  affiliates,
associates,  parents, predecessors,  successors,  assigns, heirs, executors, and
administrators,   or  personal  representatives  (collectively,   the  "Released
Persons"),  or against  anyone  else in  connection  with,  or that arise now or
hereafter out of or are related to, the settlement  (except for compliance  with
the  settlement)  or any matters,  transactions,  circumstances  or  occurrences
referred to in the Complaint,  or the fiduciary or disclosure obligations of any
of the  Released  Persons  with  respect  to any of the  foregoing;  and (b) all
claims,  rights,  or causes of action,  known or unknown,  that are,  could have
been,  or might in the future be  asserted on behalf of the  Corporation  or any
shareholder  against any Released  Person or against  anyone else in  connection
with, or that arise now or hereafter out of or are related to, the settlement or
any  matters,  transactions,  circumstances  or  occurrences  referred to in the
Complaint,  or the  fiduciary or disclosure  obligations  of any of the Released
Persons with  respect to the any of the  foregoing

(collectively,  the  "Settled  Claims").  However,  except  as may be  expressly
provided herein,  this Agreement shall not affect any existing  contract between
the Corporation and any defendant,  nor shall it affect any existing judgment in
favor of the Corporation.

         3. In  consideration  of  paragraph  2 above,  on or  before  the tenth
Business Day after the day upon which the order  approving the settlement of the
lawsuit and  dismissing  with  prejudice  all claims  brought in the  derivative
action, through the date of this Agreement,  shall have become a Final Order and
all appeal periods have run:

                  (a) the  Corporation  will  pay to the  plaintiffs  out of the
amounts recovered by the SLC the sum of $22,500,  representing  reimbursement of
the plaintiffs' legal fees incurred in the investigation, preparation and filing
of the  action,  and the further  sum of $75,000 in cash in  recognition  of the
benefits  conferred upon the Corporation  and its  shareholders by virtue of the
investigation  which was commenced by the Corporation as a result of plaintiffs'
lawsuit,  which  resulted  in a recovery  to the  Corporation  of  approximately
$500,000 in cash, a judgment, and a secured note; and

                  (b) the  Corporation  will  deliver to the  plaintiffs  50,000
shares of the common stock of the  Corporation,  subject to the  restrictions on
such stock hereinafter set forth.

         4. By separate  agreement (the "Spurlock  Agreement") with the Spurlock
Family  Limited  Partnership  (the  "Family  Partnership"),  the  plaintiff  Lee
Rasmussen  ("Rasmussen") and others  (collectively,  the "Rasmussen Group") have
compromised  and  settled  for  separate  consideration  the direct  claims they
asserted on their own behalf in the Sixth Claim of the  Complaint  and all other
claims they may have individually, or as representatives of any other person, on
account  of  alleged  conduct  of any of the  Corporation's  present  or  former
directors,   officers,  employees,   partners,  principals,  agents,  attorneys,
subsidiaries,  affiliates,  predecessors

or their successors,  assigns, heirs or personal representatives,  none of which
claims is a derivative  claim.  The Family Limited  Partnership/Rasmussen  Group
separate  settlement of non-derivative  claims,  which provides for Rasmussen to
receive 225,000 shares of common stock in the Corporation presently owned by the
Family Limited  Partnership  and for members of the Rasmussen  Group to have the
right to "put" to the Family Limited  Partnership  certain shares, is at no cost
to and places no obligations on the Corporation.  Harold N. Spurlock,  Irvine R.
Spurlock and H. Norman Spurlock,  Jr., as evidenced by their signatures  hereto,
agree that neither the  Corporation  nor its insurers nor any other person shall
be  required  to,  and that  they  will not  seek to have the  Corporation,  its
insurers, or any other person, indemnify, reimburse or hold harmless any of them
for any liabilities,  losses,  costs,  damages,  injuries,  claims,  demands and
expenses,  including legal  expenses,  arising from or related to the settlement
between the Spurlock  Family Limited  Partnership and the Rasmussen  Group;  and
Harold N.  Spurlock,  Irvine R.  Spurlock  and H. Norman  Spurlock,  Jr.  hereby
expressly waive and release any claim thereto.

         5.  As soon as  practicable  after  the  execution  of this  Agreement,
counsel  shall submit this  Agreement to the Court for approval of submission of
its terms by notice to all  shareholders of record of the  Corporation's  stock,
and  shall  submit  to the  Court a  proposed  order  containing  the  following
provisions, which are hereby consented to by the parties signatory hereto:

                  (a) Approving the  appropriate  forms of notice to be given to
shareholders ("Notice") and the manner of giving such Notice, and directing that
such Notice be given by the Corporation on or before a date certain (the "Notice
Date"),  as well as containing the manner for filing proof of the giving of such
Notice and such other provisions as shall be appropriate with respect to Notice.

                  (b)  Directing  that  a  hearing  be  held  to  determine  the
fairness,  reasonableness,  and adequacy of the settlement and whether it should
be approved by the Court; fixing a date for such hearing; and providing that any
shareholder who objects to the approval of this settlement or to the judgment to
be  entered  as a  result  of its  approval  may  appear  at the  hearing,  upon
conditions  stated,  and show cause why the settlement should not be approved as
fair,  reasonable  and adequate and why final  judgments  pursuant to Rule 54(b)
should not be entered.

                  (c) Requiring that the objection of any person must be made in
writing and that such  objection  together  with any  supporting  papers must be
filed  with the Court more than ten (10) days  prior to the  hearing  set by the
Order and served on counsel designated in the Order.

                  (d)  Providing  that,  upon  approval of the  settlement,  all
shareholders  and the Corporation  shall forever be barred from  prosecuting the
Settled Claims.

         6. In advance of the  hearing at which  final  approval by the Court of
the  Settlement is sought,  counsel for  plaintiffs  and counsel for  defendants
shall  jointly  file a motion  for an  Order,  which  shall  constitute  a final
judgment  pursuant  to Rule 54(b) as to all claims on behalf of the  Corporation
and its shareholders:

                  (a) Finding  that  adequate  notice has been given,  approving
this  Agreement  and the  Settlement  and adjudging the terms hereof to be fair,
reasonable  and  adequate  and  directing  consummation  of  the  Settlement  in
accordance with the terms and conditions of this Agreement.

                  (b)  Dismissing  the Complaint,  all claims  therein,  and all
related claims on the merits, without costs, in favor of the defendants and with
prejudice to plaintiffs,  individually, and on behalf of the Corporation and its
shareholders; and

                  (c) Providing that all shareholders and the Corporation  shall
forever be barred from prosecuting the Settled Claims.

         7. With respect to any shares of stock delivered to any plaintiff under
the Settlement (the "Shares"),  each plaintiff hereby represents and warrants to
the Corporation and all other defendants that:

                  (a) Each  plaintiff is acquiring  the Shares as an  investment
for his/her own account, as principal, and not with a view towards the resale or
distribution  thereof;  he/she has no  intention,  agreement or  arrangement  to
divide  his/her  interest in the Shares  with  others or to assign,  transfer or
otherwise  dispose of any or all of the  Shares  unless and until the Shares are
registered or an exemption from such  registration is available under applicable
federal and state securities laws.

                  (b) Each  plaintiff,  either  alone or together  with  his/her
representatives,  has such  knowledge  and  experience in financial and business
matters that he/she is capable of evaluating the  Corporation and the merits and
risks of an investment in the Shares.

                  (c) Neither the Corporation nor any person acting on behalf of
the  Corporation  made any offer of the  Shares by means of any form of  general
solicitation or general advertising.

                  (d)  Each  plaintiff  has  been  furnished  with a copy of the
Corporation's  Form 10-K for the fiscal year ended December 31, 1997, and copies
of the  Corporation's  Form 10-Q for the quarters ended March 31, 1998, June 30,
1998,  and September 30, 1998,  and has been afforded the  opportunity to obtain
any additional  information necessary to make an informed investment decision on
the Shares.

         8. Each plaintiff agrees that the Shares will bear a restrictive legend
prohibiting  transfers thereof except in compliance with applicable  federal and
state securities laws and will not be transferred of record except upon adequate
evidence  of  compliance  therewith.  The  Corporation  may  require  that  each
plaintiff provide the Corporation with an opinion of counsel satisfactory to the
Corporation  that such  transfer  complies  with  applicable  federal  and state
securities laws. Stop transfer  instructions will be issued to the Corporation's
transfer agent with respect to the Shares.

         9. The plaintiffs  hereby  unconditionally  release the Corporation and
all current,  past and future officers,  directors,  employees and agents of the
Corporation, whether or not named, from any and all liability that may arise out
of any breach,  default or claim under the separate  agreement with the Spurlock
Family Limited  Partnership,  including but not limited to any liability arising
out of the transfer of the  Corporation's  common stock to any  plaintiff or the
fulfillment of the obligations of the Spurlock Family Limited  Partnership under
such separate  agreement  relating to any rights related to those  securities by
any of the  plaintiffs.  The Corporation in no way guarantees the performance of
the  obligations  set forth in the separate  agreement with the Spurlock  Family
Limited Partnership,  and each plaintiff agrees that his or her remedies for any
breach,  claim or default thereunder shall be exclusively against the parties to
such  agreement and not against the  Corporation,  its  officers,  directors and
employees, or any successor of the Corporation.

         10.  In the  event  that  the  orders  of  the  Court  contemplated  in
Paragraphs  4 and 5 not be entered,  or be entered  but  reversed or modified on
appeal, then this Agreement shall have no further force and effect, and shall be
without  prejudice  to the  claims,  defenses,  rights  and  contentions  of the
defendants or plaintiffs.

         11. Neither this Agreement nor any  proceedings  hereunder shall in any
event be construed  as or deemed to be evidence of any  admission on the part of
any of the  Corporation's  present  or former  directors,  officers,  employees,
partners,   principals,   agents,   attorneys,   subsidiaries,   affiliates,  or
predecessors or successors of any liability or wrongdoing whatsoever,  or of the
truth of the  averments  of the  Complaint in this action or an admission of any
lack of merit in their defenses,  nor shall this Agreement,  or any of the terms
hereof, or any of the negotiations or proceedings connected herewith, be offered
or  received  in  evidence  for any  purpose  other  than  for  purposes  of the
Settlement and its  effectuation  and the dismissal order which it contemplates,
and, without limitation,  they shall not be used as an admission of any wrongful
or illegal activity on the part of any person or of any liability  whatsoever by
any of the defendants, or as an admission of damage to any person, including the
Corporation,  or as an  admission  of  any  of the  averments  contained  in the
Complaint in this action.

         12. This Agreement is to be construed and enforced in accordance  with,
and the rights of the parties shall be governed by, the laws of the Commonwealth
of Virginia (without giving effect to any laws or rules relating to conflicts of
laws that would cause the application of the laws of any jurisdiction other than
the  Commonwealth  of Virginia).  All parties  hereby  consent to and accept the
exclusive  jurisdiction of the federal and state courts serving the Commonwealth
of Virginia in all  disputes  arising  from this  Agreement,  including  without
limitation the interpretation, performance, termination of this Agreement.

         13.  This  Agreement  may be executed  in  counterparts  by the parties
hereto,  each of which  shall be deemed an  original  and which  together  shall
constitute one and the same instrument.

         DATED as of December 2, 1998.

                                      PLAINTIFFS:

                                               /s/ LEE RASMUSSEN
                                               -----------------------------
                                               LEE RASMUSSEN

                                               /s/ DOUG RICHMOND
                                               -----------------------------
                                               DOUG RICHMOND

                                               /s/ JEFF T. COATES
                                               -----------------------------
                                               JEFF T. COATES

                                               /s/ ERNEST REEVES
                                               -----------------------------
                                               ERNEST REEVES

                                               /s/ VERNON RASMUSSEN
                                               -----------------------------
                                               VERNON RASMUSSEN

                                               /s/ SHEILA RASMUSSEN
                                               -----------------------------
                                               SHEILA RASMUSSEN

                                               /s/ BEVERLY DITTEMORE
                                               -----------------------------
                                               BEVERLY DITTEMORE

                                               /s/ CHRISTY OLSEN
                                               -----------------------------
                                               CHRISTY OLSEN

                                      DEFENDANTS:

                                               SPURLOCK INDUSTRIES, INC.,
                                               a Virginia corporation

                                               By: /s/ Phillip S. Sumpter
                                                   -------------------------
                                                   Phillip S. Sumpter
                                                   Chairman and CEO

                                               /s/ HAROLD N. SPURLOCK
                                               -----------------------------
                                               HAROLD N. SPURLOCK

                                               /s/ IRVINE R. SPURLOCK
                                               -----------------------------
                                               IRVINE R. SPURLOCK

                                               /s/ H. NORMAN SPURLOCK, JR.
                                               -----------------------------
                                               H. NORMAN SPURLOCK, JR.

                                               /s/ PHILLIP S. SUMPTER
                                               -----------------------------
                                               PHILLIP S. SUMPTER

                                               /s/ WARREN E. BEAM, JR.
                                               -----------------------------
                                               WARREN E. BEAM, JR.

                                               /s/ LLOYD PUTMAN
                                               -----------------------------
                                               LLOYD PUTMAN

 

Basic Info X:

Name: STIPULATION AND SETTLEMENT AGREEMENT
Type: Stipulation and Settlement Agreement
Date: March 31, 1999
Company: SPURLOCK INDUSTRIES INC
State: Virginia

Other info:

Date:

  • December 31 , 1997
  • March 31 , 1998
  • June 30 , 1998
  • September 30 , 1998
  • December 2 , 1998

Organization:

  • THE DISTRICT OF COLORADO Civil Action No
  • Board of Directors
  • Special Litigation Committee of Spurlock Industries , Inc.
  • Family Limited PartnershipRasmussen Group
  • Spurlock Family Limited Partnership
  • Commonwealth of Virginia

Location:

  • BEVERLY DITTEMORE
  • Civ
  • RICHMOND
  • Virginia
  • IRVINE

Money:

  • $ 22,500
  • $ 75,000
  • $ 500,000

Person:

  • v. SPURLOCK
  • Lee Rasmussen
  • Irvine R. Spurlock
  • JEFF T. COATES
  • ERNEST REEVES
  • VERNON RASMUSSEN
  • SHEILA RASMUSSEN
  • CHRISTY OLSEN
  • HAROLD N. SPURLOCK
  • R. SPURLOCK s H. NORMAN SPURLOCK
  • PHILLIP S. SUMPTER
  • WARREN E. BEAM
  • LLOYD PUTMAN