Exhibit 10.26 to CNS, Inc. Form 10-K dated March 31, 2004





Exhibit 10.26 



CNS, Inc.

7515 Smetana Lane

Eden Prairie, Minnesota 55345

Phone: (952) 229-1500 Fax (952) 229-1700

www.cns.com 



September 18, 2003 



Samuel E. Reinkensmeyer

4506 Drexel Avenue

Edina, MN 55424 



Dear Sam: 



I am pleased to confirm my offer of
employment to you as Vice President of Finance and Chief Financial Officer reporting to
me. If you accept this offer, your start date will be as mutually agreed between us, but
not later than October 15, 2003. 



Your compensation package will
include the following components: 



	  	•  	  	Your
base salary will be $190,000 annualized, paid over our regular semi-monthly pay periods.  






	  	•  	  	You
will be eligible for annual revenue and profit based incentive bonus of up to 60% (15% at
threshold, 30% at plan and 60% maximum) of your base salary. The parameters of the
incentive bonus plan for senior management is presented by management for approval by the
Board of Directors each year.  






	  	•  	  	Subject
to the approval of the CNS, Inc. Compensation Committee, we will grant you an option to
purchase 53,500 shares of CNS common stock at a price per share determined on your first
day of employment (date of grant). These shares will vest in equal amounts over a
five-year period beginning on your first anniversary date.  






	  	• 	  	Periodically,
at the discretion of the Compensation Committee, you will be eligible to receive annual
stock options that will vest over a three-year period.  




















Samuel E. Reinkensmeyer Offer Letter

Page Two 



	  	•  	  	 CNS
will pay you a one time hiring bonus of $65,000 less required withholding, to be paid
with your first paycheck.  






	  	•  	  	You
will be eligible to receive a monthly car allowance of $450.00.  






	  	•  	  	 You
will be eligible to participate in CNS, Inc.‘s benefit plans. A packet of benefit
information will be sent to you under separate cover following your acceptance of this
offer. CNS’ benefit plan includes 25 days of Paid Time Off (PTO) during the first
year of employment. Eight of the 25 days will be added to your PTO bank immediately upon
date of hire. The remaining 17 days accrue at a rate of 5.67 hours per pay period over
the first twelve months.  






	  	•  	  	 In
the event your employment is terminated by CNS without Cause (as defined on Exhibit A)
prior to a change in control of CNS, in exchange for a written release of all claims by
you, CNS will pay you severance equal to your annual base salary payable over a period of
twelve months from your termination date, subject to required withholding plus pay your
COBRA premium over the same period. In the event your employment is terminated by CNS
without Cause or you resign your employment with CNS for Good Reason (as defined on
Exhibit A) within 24 months after a change in control of CNS, in exchange for a written
release of all claims by you, CNS will pay you severance equal to two times your annual
base salary payable over a period of twenty-four months from your termination date,
subject to required withholding plus your COBRA premium over a period of 18 months from
your termination date.  






We will schedule a pre-employment
druge and alcohol screen tests for you at the Airport Clinic. This employment offer is
contingent upon successfully completing these tests. As a condition of your employment and
as consideration for the compensation and benefits to be provided, you will, prior to your
first day of employment, execute the Employment Agreement attached as Exhibit B,
containing confidentiality, invention assignment and noncompetition provisions required of
all new employees. 




















Samuel E. Reinkensmeyer Offer Letter

Page Three 



Sam, we are very excited about the
prospect of you joining CNS and ask that you confirm your acceptance of this offer by
signing the enclosed copy of this letter and returning it to me at your earliest
convenience. If you have any questions at all about the terms of the offer, please call me
or Michelle Beuning so that we can discuss and resolve them as soon as possible. I know
that you will find this position a challenging and rewarding opportunity and that you will
be an important part of delivering the CNS vision! 



Sincerely, 



/s/   Marti Morfitt 



Marti Morfitt

President & CEO 





Accepted and agreed to this offer on the

23rd day of September, 2003. 





/s/   Samuel E. Reinkensmeyer 



Samuel E. Reinkensmeyer 




















EXHIBIT A  



	  	“Cause”
shall mean one or more of the following: (i) your willful failure or
refusal to perform your expected services to CNS consistent with your position;
(ii) your commission of an intentional breach of fiduciary duty against CNS
or a substantial act of fraud against or affecting CNS or any customer,
supplier, client, agent, or executive thereof; (iii) your commission of any
other willful or reckless act which is deemed by CNS’s Board to have a
material adverse effect on CNS (it being understood that mere negligence in
performance of duties is not Cause under this Agreement); (iv) your willful
breach of any provision of this Agreement or any policy or directive of the
Board or the CEO, including the CNS Code of Conduct; or (v) your commission
of any act involving moral turpitude which is deemed by CNS’s Board to have
a material adverse effect on CNS or your position with CNS; or (vi) your
unsatisfactory performance after specific notice of performance deficiencies,
description of expectations and opportunity to cure. 






	  	“Good
Reason” shall mean: (i) CNS has materially breached any of the terms
of this Agreement; (ii) you are assigned duties which are materially
inconsistent with your position, duties, responsibilities and status as Chief
Financial Officer; (iii) your base salary or bonus opportunity, is reduced;
or (iv) as a result of the relocation of CNS’ principal offices, you
would be required to relocate your principal residence outside reasonable
commuting distance of the Twin Cities Metropolitan area.