Exhibit 10.12


 


EMPLOYMENT AGREEMENT


 


THIS  EMPLOYMENT AGREEMENT, dated as of September
8, 2003, is made by and between Dotronix, Inc., a Minnesota corporation
(hereinafter “Dotronix”) and Robert V. Kling, a resident of the State of
Minnesota (hereinafter “Kling”).


 


WITNESSETH THAT:


 


WHEREAS,
Dotronix desires to employ the services of Kling by reason of his ability and
experience in the business of Dotronix; and


 


WHEREAS, Kling
desires to continue to be employed by Dotronix and is willing to accept
employment in accordance with the provisions hereinafter set forth.


 


NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto agree as follows:


 


1.             Duties.  Dotronix hereby employs Kling as Chief
Financial Officer, Treasurer, and Secretary of Dotronix to supervise and direct
various operations of the business conducted and to be conducted by Dotronix,
subject to the direction and control of the  
Board of Directors of Dotronix, and 
Kling does hereby accept such employment.


 


2.             Term.  This Agreement and Kling’s employment shall
commence on the date hereof and expire on June 30, 2006, unless sooner
terminated as provided for herein.


 


3.             Base Compensation.  Dotronix shall pay, and Kling shall accept,
as base compensation for the services to be performed by Kling hereunder, a
monthly salary of


 


1

















 


six thousand five hundred
dollars ($6,500) adjusted annually at the same rate as the average annual
salary adjustment of all Dotronix employees; provided, however, that such
salary shall at no time be less than of six thousand five hundred dollars
($6,500) per month.


 


4.             Bonus Compensation.


 


In addition to the base compensation described in Section 3, Kling
shall be paid a cash incentive payment within 30 days of the end of each
reporting quarter in accordance with the details set  forth below. The calculation of pre-tax earnings or loss for such
fiscal years shall not take into account the accrual or payment of any bonuses
payable to Kling under this Section 4. or to Kurt T. Sadler under an employment
agreement.


 


	
  Quarterly pre-tax earnings

  	
   

  	
  % of
  quarterly pre-tax earnings to

  
	
   

  	
   

  	
   

  
	
  $50,000 to $89,999

  	
   

  	
  3%

  
	
   

  	
   

  	
   

  
	
  $90,000 or greater

  	
   

  	
  5%

  



 


 


5.                                       Stock option
grants


 


Dotronix agrees to issue stock options for
50,000 shares of common stock to Kling under the 1999 Stock Incentive Plan, in
increments of 12,500 shares, starting October 1, 2003, and continuing every six
months thereafter until options for 50,000 has been granted.  The option price for each increment of
12,500 shares shall be the closing price of the stock on the grant date. Each
stock option shall be for 10 years. Once a grant has been made it will remain
in effect until it expires 10 years after issuance.


 


6.             Severance
Benefit.


 


(a)                              In the event Kling’s
employment terminates following a Change of Control as defined in Section 11
below, he shall be paid a severance benefit equal to one year of the base
compensation which would be due under Section 3 (as adjusted, if applicable,
pursuant to Section 3) through the expiration date set forth in Section 2.  This severance benefit shall be due and
payable immediately upon such termination of employment.


 


(b)                             In the event Kling’s
employment terminates following a Change of Control as defined in Section 11
below, he shall be issued the balance of the un-issued stock options pursuant
to section 5.  This severance benefit
shall be due and payable immediately upon such termination of employment.


 


(c)                                  Kling shall not be
entitled to a severance benefit pursuant to this Section 6 in the event of his
termination for “cause” as defined in Section 10 below


 


2

















 


or in the event of his resignation (other than a resignation following
a Change of Control, as contemplated by the last sentence of Section 11).


 


7.                                       Activities
During Employment.  Kling does
hereby warrant and represent to Dotronix that he is not subject to any
agreement or arrangement which would preclude him from carrying out the terms
of this Agreement.


 


8.                                       Benefits.  Kling shall be entitled to participate in
any insurance, pension and other benefits which may be afforded by Dotronix to
its employees engaged in a supervisory or management position.


 


9.             Covenant Not to
Compete.  Kling agrees that, during
the term of this Agreement he will not, directly or indirectly, on his own
behalf or as a partner, officer, employee, consultant, stockholder, director,
or trustee of any person, firm or corporation solicit, accept or service any
customers of Dotronix, nor engage in any business which would compete with, or
be of a similar nature to, the business being carried on by Dotronix.  The parties hereto hereby recognize that
money damages would not be an adequate remedy for the breach of this covenant
and Kling hereby agrees to the grant of specific performance of this covenant
or other appropriate equitable relief by a court of competent jurisdiction in
the event of its breach.


 


10.           Termination.  Notwithstanding any other provision
contained herein, this Agreement may be terminated by (a) the mutual agreement
of the parties hereto; (b) the death of Kling, or the disability of Kling which
prevents him from performing his normal duties for a period of six consecutive
months or more; or (c) Dotronix for cause. 
For purposes of this Agreement, the term “cause” shall mean deliberate
misconduct on the part of Kling which is seriously injurious to the interests
of Dotronix, which misconduct shall be specified in a written notice of
termination delivered to Kling by the Board of Directors of Dotronix.


 


11.           Change of Control.  A “Change of Control” shall have occurred if


 


(i)             Kling’s employment with Dotronix
thereafter is terminated (other than (A) for “cause” as defined in Section 10
above, or (B) by virtue of the death or disability of Kling, or (C) by means of
the resignation of Kling), or


 


(ii)            Kling’s responsibilities with Dotronix
thereafter are materially reduced without his agreement, or Kling is required
to relocate without his agreement.


 


A resignation by Kling following the occurrence of an event specified
in (ii) above shall not be deemed a resignation by Kling for purposes of (i)(C)
above or for purposes of Section 6(b).


 


12.           Entire
Agreement and Governing Law.  This
Agreement contains the entire agreement between the parties hereto and it shall
be amended or modified only by written instruments signed by both parties
hereto.  This Agreement shall in all
respects be governed, enforced and interpreted in accordance with the laws of
the State of Minnesota.


 


3

















 


IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.


 


	
   

  	
  DOTRONIX, INC.

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Kurt T. Sadler

  	
   

  
	
   

  	
   

  	
  Kurt T. Sadler

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robert V. Kling

  	
   

  



 


4