EXHIBIT 10.7

CHANGE IN CONTROL AGREEMENT

This Agreement, made and entered into by and between PEMSTAR Inc., a Minnesota
corporation (the “Company”), with its principal offices at 3535 Technology Drive
N.W., Rochester, Minnesota, and *, an officer of the Company (the “Employee”),
residing at *.

WHEREAS, this Agreement is intended to specify the financial arrangements that
the Company will provide to the Employee upon the Employee’s separation from
employment with the Company under any of the circumstances described herein; and

WHEREAS, this Agreement is entered into by the Company in the belief that it is
in the best interest of the Company to provide stable conditions of employment
for the Employee notwithstanding the possibility, threat, or occurrence of
certain types of changes in control, thereby enhancing the Company’s ability to
attract and retain highly qualified people.

NOW, THEREFORE, in consideration of the mutual covenants, promises, payments,
and undertakings of the parties hereto, the parties agree as follows:

1. Effect of Agreement; Term. The Employee shall be employed on an at-will
basis, except to the extent otherwise provided by a written employment
agreement, if any, in effect between the Employee and the Company. This
Agreement is not, and shall not be construed as, an employment contract
affecting in any way the duration of the Employee’s employment or any terms and
conditions thereof except those set forth herein. Except as set forth herein, or
as otherwise provided by a written employment agreement, if any, in effect
between the Employee and the Company, the Employee or the Company may terminate
their employment relationship at any time, for any reason, or for no reason.

This Agreement will commence on the date hereof and shall continue in effect
until the second anniversary of the date hereof; and, commencing on the first
anniversary of the date hereof and on each anniversary thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than 90 days prior to any such date of automatic extension of this
Agreement, the Company shall have given notice to the Employee that the
Agreement will not be so extended; provided, however, if a Change in Control (as
defined in section 3(a) hereof) shall have occurred during the original or any
extended term of this Agreement, this Agreement shall continue in effect for a
period of 24 months following such Change in Control (as defined in section 3(a)
hereof), after which 24-month period this Agreement shall terminate.

2. Termination of Employment.

a) Prior to a Change in Control. Prior to the date that is six months before a
Change in Control (as defined in section 3(a) hereof), or after termination of
this Agreement, the Employee or the Company may terminate their employment
relationship at any time, for any reason, or for no reason.

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b) After a Change in Control.

i) From and after the date that is six months before a Change in Control (as
defined in section 3(a) hereof) and prior to the termination of this Agreement,
the Company shall not terminate the Employee from employment with the Company
except as provided in this section 2(b), or as a result of the Employee’s
Disability (as defined in section 3(d) hereof) or his death.

ii) From and after the date that is six months before a Change in Control (as
defined in section 3(a) hereof) and prior to the termination of this Agreement,
the Company shall have the right to terminate the Employee from employment with
the Company for Cause (as defined in section 3(c) hereof), by written notice to
the Employee, specifying the particulars of the conduct of the Employee forming
the basis for such termination.

iii) From and after the date that is six months before a Change in Control (as
defined in section 3(a) hereof) and prior to the termination of this Agreement:
(a) the Company shall have the right to terminate the Employee’s employment
without Cause (as defined in section 3(c) hereof); and (b) the Employee shall,
upon the occurrence of such termination by the Company without Cause or upon the
voluntary termination of the Employee’s employment by the Employee during such
period for Good Reason (as defined in section 3(b) hereof), be entitled to
receive the benefits provided in section 4 hereof. The Employee shall evidence a
voluntary termination for Good Reason by written notice to the Company given
within ten (10) days after the date of the occurrence of any event that the
Employee knows or should reasonably have known constitutes Good Reason for
voluntary termination. Such notice need only identify the Employee and set forth
in reasonable detail the facts and circumstances claimed by the Employee to
constitute Good Reason. Any notice given by the Employee pursuant to this
section 2 shall be effective ten (10) days after the date it is given by the
Employee.

3. Definitions.

a) A “Change in Control” shall mean any of the following:

i) A sale of all or substantially all of the assets of the Company.

ii) The acquisition of securities of the Company representing more than 50% of
the combined voting power of the Company’s then outstanding securities by any
person or group of persons, except a Permitted Shareholder as hereinafter
defined, acting in concert. A “Permitted Shareholder” means a holder, as of the
date of this Agreement, of voting capital stock of the Company.

iii) A consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s
outstanding capital stock are converted into cash, securities or other property,
other than a consolidation or merger of the Company in which Company

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shareholders immediately prior to the consolidation or merger have the same
proportionate ownership of voting capital stock of the surviving corporation
immediately after the consolidation or merger.

iv) In the event that the shares of voting capital stock of the Company are
traded on an established securities market: a public announcement that any
person has acquired or has the right to acquire beneficial ownership of
securities of the Company representing more than 50% of the combined voting
power of the Company’s then outstanding securities, and for this purpose the
terms “person” and “beneficial ownership” shall have the meanings provided in
Section 13(d) of the Securities and Exchange Act of 1934, as amended or related
rules promulgated by the Securities and Exchange Commission or; the commencement
of or public announcement of an intention to make a tender offer or exchange
offer for securities of the Company representing more than 50% of the combined
voting power of the Company’s then outstanding securities.

v) The Board of Directors of the Company, in its sole and absolute discretion,
determines that there has been a sufficient change in the share ownership of the
Company to constitute a change of effective ownership or control of the Company.

b) “Good Reason” shall mean the occurrence of any of the following events,
except for the occurrence of such an event in connection with the termination or
reassignment of the Employee’s employment by the Company for Cause (as defined
in section 3(c) hereof), due to the Employee’s Disability (as defined in
section 3(d) hereof), or due to the Employee’s death:

i) The assignment to the Employee of employment responsibilities which are not
of comparable responsibility and status as the employment responsibilities held
by the Employee immediately prior to a Change in Control;

ii) a reduction by the Company in the Employee’s base salary as in effect
immediately prior to a Change in Control;

iii) the Company’s requiring the Employee to be based at a location that is in
excess of 50 miles from the location of the Employee’s principal office
immediately prior to the Change in Control;

iv) the failure by the Company to provide employee benefit plans, programs,
policies and practices (including, without limitation, retirement plans and
medical, dental, life and disability insurance coverage) to the Employee and the
Employee’s family and dependents (if applicable) that provide substantially
similar benefits, in terms of aggregate monetary value, to the Employee and the
Employee’s family and dependents (if applicable) at substantially similar costs
to the Employee as the benefits provided by those plans, programs, policies and
practices in effect immediately prior to the Change in Control; or

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c) “Cause” shall mean:

i) Repeated neglect by the Employee of any of his duties or his repeated
failures or omissions to carry out lawful and reasonable orders which, in the
reasonable judgment of the Company, are willful and deliberate and which are not
cured within a reasonable period after the Employee’s receipt of written notice
thereof from the Company;

ii) Any act or acts of personal dishonesty by the Employee intended to result in
the personal enrichment of the Employee at the expense of the Company;

iii) Any willful and deliberate misconduct that is materially and demonstrably
injurious to the Company; or

iv) Any criminal indictment, presentment, charge or conviction of the Employee
for a felony, whether or not the Company is the victim of such offense.

d) “Disability” shall mean any physical or mental condition which causes the
Employee to fail to render services to the Company for a period of ninety
(90) days during any one hundred eighty (180) day period. The existence or
nonexistence of the Employee’s Disability will be determined in good faith by
the Board of Directors after notice in writing given to the Employee at least
thirty (30) days prior to such determination. During such thirty (30) day
period, the Employee shall be permitted to make a presentation to the Board of
Directors for its consideration.

e) “Company” shall mean the Company and any successor to its business and/or
assets which executes and delivers the Agreement provided for in section 5(a) or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law.

4. Benefits Upon Termination Under section 2(b)(iii).

a) Upon the termination (voluntary or involuntary) of the employment of the
Employee pursuant to section 2(b)(iii) hereof, the Company shall pay to the
Employee, in lieu of any further compensation to the Employee for periods
subsequent to the date that the termination of the Employee’s employment becomes
effective, as severance pay, two hundred twenty percent (220%) of the Employee’s
annual base salary in effect at the time the notice of termination is given or
immediately prior to the Change in Control (whichever is greater), payable in
twenty four (24) equal monthly installments beginning in the first month after
the termination. At the option of the Company, the amount due hereuncer may be
prepaid in whole or in part at any time or from time to time.

b) All payments described in this section shall be subject to any applicable
payroll or other taxes required by law to be withheld.

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5. Successors and Binding Agreement.

a) This agreement shall inure to the benefit of and be binding upon the Company
and its successors. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or of the assets of the Company to
expressly assume and agree to perform this Agreement.

b) This agreement is personal to the Employee, and the Employee may not assign
or transfer any part of his rights or duties hereunder, or any compensation due
to him hereunder, to any other person. Notwithstanding the foregoing, this
Agreement shall inure to the benefit of, and be enforceable by, the Employee’s
personal or legal representatives, executors, administrators, heirs,
distributes, devisees, and legatees.

6. Limitation of Damages. If for any reason the Employee believes the severance
provisions of this agreement have not been properly adhered to by the Company,
and if it is determined that the Company has not, in fact, properly adhered to
the severance provisions of this Agreement, the sole and exclusive remedy to
which the Employee is entitled is the severance payment to which the Employee is
entitled under the provisions of this Agreement.

7. Modification; Waiver. No provision of this Agreement may be modified, waived,
or discharged unless such waiver, modification, or discharge is agreed to in a
writing signed by the Employee and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

8. Notice. All notices, requests, demands, and all other communications required
or permitted by either party by this Agreement (including, without limitation,
any notice of termination of employment) shall be in writing and shall be deemed
to have been duly given when delivered personally or received by certified or
registered mail, return receipt requested, postage prepaid, at the address of
the other party as first written above (directed to the attention of the Board
of Directors in the case of the Company). Either party hereto may change its
address for purposes of this section by giving fifteen (15) days’ prior written
notice to the other party hereto.

9. Severability. If any term or provision of this Agreement or the application
hereof to any person or circumstances shall to any extent be determined to be
invalid or unenforceable, the remainder of the Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.

10. Governing Law. This Agreement has been executed and delivered in the State
of Minnesota and shall in all respects be governed by, and construed and
enforced in accordance with, the laws of the State of Minnesota, including all
matters of construction, validity, and performance.

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11. Settlement of Disputes. Any claims or disputes of any nature between the
Company and the Employee arising from or related to the performance, breach,
termination, expiration, application or meaning of this Agreement shall, at the
option of either party, be resolved exclusively by arbitration in Olmsted
County, Minnesota, in accordance with the applicable rules of the American
Arbitration Association. In the event of submission of any dispute to
arbitration, each party shall, not later than 30 days prior to the date set for
the hearing, provide to the other party and to the arbitrator(s) a copy of all
exhibits upon which the party intends to rely at the hearing and a list of all
persons each party intends to call at the hearing. The fees for the
arbitrator(s) and other costs incurred by the Employee and the Company in
connection with such arbitration shall be paid by the party that is unsuccessful
in such arbitration. The decision of the arbitrator(s) shall be final and
binding upon both parties. Judgement of the award rendered by the arbitrator(s)
may be entered in any court of competent jurisdiction.

12. Effect of Agreement; Entire Agreement. The Company and the Employee
understand and agree that this Agreement is intended to reflect their agreement
only with respect to the subject matter hereof and is not intended to create any
obligation on the part of either party to continue employment. This Agreement
supercedes any and all other oral or written agreements or policies made
relating to the subject matter hereof and constitutes the entire agreement of
the parties relating to the subject matter hereof; provided that this Agreement
shall not supercede or limit in any way the Employee’s rights under any benefit
plan or program in accordance with its terms.

IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement by
their signatures below.

 

Dated:                 , 200       PEMSTAR Inc. _____________       By   
_____________ _____________       Its    _____________ Dated:                 ,
200       _____________________ _____________               Employee