treanorseparation.htm


    EXHIBIT
10.35



    
 

    SEPARATION
AGREEMENT

     

     

    THIS
AGREEMENT is made between Winland Electronics, Inc., a Minnesota
corporation (the “Company”), and Terry Treanor (the
“Employee”).

     

    BACKGROUND:

     

    
      	
              A.  

            	
              The
      Employee and the Company are parties to an Employment Agreement dated
      January 5, 2007 (the “Employment Agreement”) under which the Employee is
      employed by the Company.  Under the terms of the Employment
      Agreement, Employee is entitled to severance pay under certain
      circumstances including the condition that he release the Company in
      exchange for such severance pay.

            


    

     

    
      	
              B.  

            	
              Employee
      and the Company have reached an agreement regarding the Employee’s
      separation from the Company and desire to memorialize that
      agreement.

            


    

     

     

    THE
COMPANY AND THE EMPLOYEE AGREE AS FOLLOWS:

     

    
      	
              1.  

            	
              TERMINATION
      OF EMPLOYMENT.  Employee's
      employment with the Company is terminated effective as of the close of the
      Company’s business day on February 13, 2008 (the “Termination
      Date”).

            


    

     

    
      	
              2.  

            	
              PAYMENT. In
      exchange for the promises, releases and agreements made by the Employee in
      this Agreement and in full satisfaction of its obligations under the
      Employment Agreement, absent rescission of this Agreement, the Company
      will (1) pay Employee at regular payroll intervals an amount equal to nine
      (9) months of Employee’s current base salary, subject to required and
      authorized deductions and withholdings; and (2) continue to pay the
      Company’s ordinary share of premiums for six (6) calendar months for
      Employee’s COBRA continuation coverage in the Company’s group medical,
      dental and life insurance plans (as applicable), provided Employee elects
      such continuation coverage and timely pays Employee’s share of such
      premiums, if any.

            


    

     

    
      	
              3.

            	
              RELEASE
      OF CLAIMS.

            


    

     

    
      	
               
      

            	
              a.

            	
              Specifically
      in consideration of the Company’s agreements described in Paragraph 2 of
      this Agreement, Employee, for himself and anyone who has or obtains legal
      rights or claims through him, releases, agrees not to sue, and forever
      discharges the Company (as defined below) from any and all manner of
      claims, demands, actions, causes of action, administrative claims,
      liability, damages, claims for punitive or liquidated damages, claims for
      attorney’s fees, costs and disbursements, individual or class action
      claims, or demands of any kind whatsoever, Employee has or might have
      against them or any of them, whether known or unknown, in law or equity,
      contract or tort, arising out of or in connection with Employee’s
      employment with the Company, or the termination of that employment, or
      otherwise, and however originating or existing, from the beginning of time
      through the date of Employee’s signing this
  Agreement.

            


    

     

    
      	
               
      

            	
              b.

            	
              This
      release includes, without limiting the generality of the foregoing, any
      claims Employee may have for wages, bonuses, commissions, penalties,
      deferred compensation, vacation pay, separation benefits, defamation,
      invasion of privacy, negligence, emotional distress, breach of contract,
      claims under the Employment Agreement, estoppel, improper discharge (based
      on contract, common law, or statute, including any federal, state or local
      statute or ordinance prohibiting discrimination or retaliation in
      employment), violation of the United States Constitution, the Minnesota
      Constitution, the Age Discrimination in Employment Act, 29 U.S.C. § 621 et
      seq., the Minnesota Human Rights Act, Minn. Stat. § 363.01 et seq., Title
      VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq., the Americans with
      Disabilities Act, 42 U.S.C. § 12101 et seq., the Employee Retirement
      Income Security Act of 1976, 29 U.S.C. § 1001 et seq., the Family and
      Medical Leave Act, 29 U.S.C. § 2601 et seq., any claim arising under Minn.
      Stat. Chapters 177 and 181, Minn. Stat. § 176.82, and any claim for
      retaliation or discrimination based on sex, race, color, creed, religion,
      age, national origin, marital status, sexual orientation, disability,
      status with regard to public assistance or any other protected class, or
      sexual or other harassment.  Employee hereby waives any and all
      relief not provided for in this
Agreement.

            


    

     

    
      	
               
      

            	
              c.

            	
              Employee
      affirms that he has not caused or permitted, and to the full extent
      permitted by law, will not cause or permit to be filed, any charge,
      complaint, or action of any nature or type against the Company, including
      but not limited to any action or proceeding raising claims arising in tort
      or contract, or any claims arising under federal, state, or local
      laws.  If Employee files, or has filed on his behalf, a charge,
      complaint, or action, Employee agrees that the payments described above in
      Paragraph 2 are in complete satisfaction of any and all monetary
      claims in connection with such charge, complaint, or action and Employee
      waives, and agrees not to take, any monetary award from such charge,
      complaint, or action.

            


    

     

    
      	
               
      

            	
              d.

            	
              Employee
      understands that he is not, by signing this Agreement, releasing or
      waiving (1) any vested interest he may have in any 401(k) or profit
      sharing plan by virtue of his employment with the Company, (2) any rights
      or claims that may arise after the Agreement is signed, (3) benefit
      continuation rights under the Consolidated Omnibus Reconciliation Act or
      similar state law, (4) the right to institute legal action for the purpose
      of enforcing the provisions of this Agreement, (5) the right to apply for
      state unemployment compensation benefits, (6) any rights or claims to
      receive the consideration described above in Paragraph 2, (7) any rights
      or claims to receive payments under Paragraph 9 below, or (8) the right to
      pursue any charge, complaint, or action that cannot by law be waived by a
      private agreement such as this Agreement.  However, by signing
      this Agreement the Employee does waive, to the extent permitted by law,
      the right to receive any monetary award from any such charge, complaint,
      or action.

            


    

     

    
      	
                                      
      e.  

            	
              The
      “Company,” as used in this Paragraph and in this Separation Agreement,
      shall mean the Company and its parent, subsidiaries, divisions, affiliated
      entities, insurers, and its and their present and former officers,
      directors, shareholders, trustees, employees, agents, attorneys,
      representatives and consultants, and the successors and assigns of each,
      whether in their individual or official capacities, and the current and
      former trustees or administrators of any pension or other benefit plan
      applicable to the employees or former employees of the Company, in their
      official and individual capacities.

            


    

     

    
      	
              4.

            	
              EMPLOYEE'S
      ACKNOWLEDGMENTS.  Employee
      acknowledges and represents to the Company that: (a) he understands that
      he has the right to consult with an attorney, and that he has been advised
      by the Company to consult with an attorney, regarding the meaning and
      effect of this Agreement; (b) he understands that he is entitled to a
      period of twenty-one (21) calendar days from the date on which he receives
      an unsigned copy of this Agreement in which to consider whether to sign
      this Agreement, and that, having been advised of that entitlement, he may
      elect to sign this Agreement at any time prior to the expiration of that
      time period; (c) he has read this Agreement and understands its
      consequences; (d) he has determined to execute this Agreement of his own
      free will; (e) the amounts that the Company will pay him under this
      Agreement constitute fair and adequate consideration for the promises,
      releases and agreements made by him in this Agreement; and (f) in the
      absence of this Agreement, he would not be entitled to the amounts that
      the Company will pay him under this
    Agreement.

            


    

     

    
      	
              5.

            	
              RIGHTS
      TO RESCIND.  The
      Company and the Employee hereby acknowledge that the Employee has the
      rights described in this Paragraph
  5.

            


    

     

    
      	
               
      

            	
              a.

            	
              The
      Employee has the right to rescind this Agreement under the Age
      Discrimination in Employment Act.  To be effective, such a rescission
      must be made by written notice delivered to the Company within seven (7)
      days following the date of this Agreement or sent to the Company by
      certified mail, return receipt requested, postmarked within seven (7) days
      following the date of this
Agreement.

            


    

     

    
      	
               
      

            	
              b.

            	
              The
      Employee has the right to rescind this Agreement under the Minnesota Human
      Rights Act.  To be effective, such a rescission must be made by
      written notice delivered to the Company within fifteen (15) days following
      the date of this Agreement or sent to the Company by certified mail,
      return receipt requested, postmarked within fifteen (15) days following
      the date of this Agreement.

            


    

     

    The
address to which notice of a rescission under this Paragraph 6 is to be
delivered or sent is:  Thomas J. de Petra, 1950
Excel Drive,
Mankato,
MN 56001.

     

    
      	
               
      

            	
              6.

            	
              EMPLOYMENT
      AGREEMENT.

            


    

     

    
      	
               
      

            	
              a.

            	
              For
      the avoidance of doubt in that regard, nothing contained in this
      Separation Agreement will terminate, extinguish or in any manner limit any
      right, privilege or benefit which the Company has under the Employment
      Agreement (including, without limitation, Article 5 of the Employment
      Agreement) and each provision of the Employment Agreement under which the
      Company has any right, privilege or benefit (including, without
      limitation, Article 5 of the Employment Agreement) will continue in full
      force and effect in accordance with its
terms.

            


    

     

    
      	
               
      

            	
              b.

            	
              Without
      limiting anything contained in Paragraph 6(a) above, and in order to
      induce the Company to enter into this Separation Agreement, Employee
      hereby reaffirms, remakes and restates each and all of his obligations
      under Article 5 of the Employment Agreement.  Employee hereby
      knowingly and voluntarily waives the defense that such obligations are not
      supported by sufficient consideration.  If, and to the extent
      that, the foregoing waiver may be invalid for any purpose, Employee hereby
      acknowledges that the Company would not have entered into this Agreement
      in the absence of this Paragraph 6(b) and that the obligations of the
      Company to the Employee under this Agreement constitute good, valuable and
      sufficient consideration for the obligations of the Employee under Article
      5 of the Employment Agreement, as those obligations are reaffirmed, remade
      and restated herein.

            


    

     

    
      	
               
      

            	
              c.

            	
              If
      the Employee violates any term or provision of Article 5 of the Employment
      Agreement, the Company’s remaining obligation to the Employee under the
      Separation Agreement made under Paragraph 2 above will automatically
      terminate.

            


    

     

    
      	
               
      

            	
              d.

            	
              For
      the avoidance of any doubt in that regard, the payment to be made to the
      Employee under Paragraph 2 above is in lieu of any payment which may be
      due the Employee under the Employment Agreement in connection with or by
      reason of the termination of the Employee’s employment with the Company,
      and the release made and given by the Employee in Paragraph 3 above
      includes within its scope any claim that the Employee may have to any
      payment under the Employment Agreement in connection with or by reason of
      the termination of the Employee’s employment with the
    Company.

            


    

     

    
      	
              7.

            	
              CONFIDENTIALITY. The
      Employee will not disclose the terms of this Agreement to any person
      without the prior written consent of the Company; provided, however, that
      (a) the Employee may disclose the terms of this Agreement to the
      Employee’s legal counsel, the Employee’s accounting and tax advisors, the
      Employee’s spouse and the Employee’s other immediate family members, (b)
      the Employee may disclose the terms of this Agreement if and to the extent
      that the Employee is compelled to do so by an order issued by a court of
      competent jurisdiction, and (c) the Employee may disclose the amount paid
      to him under this Agreement to the United States Internal Revenue Service,
      the Minnesota Department of Revenue and the Minnesota Department of
      Economic Security.

            


    

     

    
      	
              8.

            	
              COMMUNICATIONS
      WITH CUSTOMERS AND OTHERS.  Company and Employee agree
      that they will communicate a mutually agreeable message regarding
      Employee’s termination from the Company to all third
      parties.  The parties agree that they shall not disparage or
      defame each other in any respect or make any disparaging comments
      concerning the employment relationship between them.  As to the
      Company, this applies to its officers, agents and directors, who
      specifically will not disparage Employee's professional reputation; and as
      to Employee this relates to comments about any officer, director or
      employee of the Company. These obligations do not apply so as to preclude
      government-mandated reports, court orders, or otherwise as required by
      law.

            


    

     

    
      	
              9.

            	
              MISCELLANEOUS
      PAYMENTS TO EMPLOYEE.  Upon verification of the amount
      and validity of such expenses which shall occur promptly after Employee
      provides the pertinent information, the Company will reimburse the
      Employee for any expenses incurred by the Employee during his employment
      with the Company, and for which the Employee has not already been
      reimbursed, provided that the Employee provides the Company reasonable
      documentation of such expenses and complies with the Company’s expense
      reimbursement
procedures.

            


    

     

    
      	
              10.

            	
              GOVERNING
      LAW. This
      Agreement will be construed and enforced in accordance with the laws of
      the State of Minnesota (without regard to the laws of such state which
      concern conflicts of laws), and any proceedings relating to the
      interpretation or the enforcement of this Agreement will be brought in
      federal or state courts located
      in Minnesota.

            


    

     

    
      	
              11.

            	
              ENTIRE
      AGREEMENT.  This Separation Agreement contains the entire
      agreement and understanding of the Company and the Employee with regard to
      the subject matter addressed herein.  The parties agree that
      they have not relied upon any verbal or written representations in
      entering into this
Agreement.

            


    


     

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

     

    
      	 	Winland
      Electronics, Inc.	 
	 	 	 	 
	
              Date: 
      February 13, 2008

            	
              By:
      

            	/s/ Thomas
      J. de Petra	 
	 	 	Thomas
      J. de Petra	 
	 	 	Its
      Chairman of the Board	 
	 	 	 	 


    

     

    
      
        	 	 	 
	 	 	 	 
	
                Date: 
      February 13, 2008

              	
                By:
      

              	/s/ 
      Terry Treanor	 
	 	 	Terry
      Treanor