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                                                                   Exhibit 10.20

December 29, 2003

Scott Mahan

Dear Scott,

BSQUARE CORPORATION is pleased to extend to you an offer for employment as our
Chief Financial Officer. This offer is subject to the approval of the Board of
Directors of BSQUARE Corporation. You will be paid bi-weekly at a rate
equivalent to an annual salary of $160,000. Your job classification is
Executive. You will be hired as an exempt employee, so you will not be entitled
to overtime. In addition to your base pay, BSQUARE offers you the following
signing bonus:

$40,000 signing bonus payable by no later than January 31, 2004. In addition to
representing an incentive to join BSQUARE, this amount shall also satisfy any
and all amounts that may be owed you for any and all advisory services
previously provided to BSQUARE.

BSQUARE CORPORATION also extends the following benefits:

a medical, dental, vision, life and disability plan
a 401(k) retirement plan
10 paid holidays and 15 days of paid time off
Options to purchase 150,000 shares of company stock, subject to approval by
BSQUARE Board of Directors.
Other discretionary benefits

BSQUARE CORPORATION is an established product development and engineering
contracting company with a promising outlook. Your meaningful participation will
greatly enhance our ability to retain our current contracting obligations and,
in the future, will enable BSQUARE CORPORATION to pursue and secure other
contracts.

YOUR EMPLOYMENT IS AT-WILL AND ACCORDINGLY, YOU OR BSQUARE CORPORATION MAY
TERMINATE THIS EMPLOYMENT RELATIONSHIP AT ANY TIME WITH OR WITHOUT NOTICE OR
CAUSE.

If BSQUARE Corporation terminates your employment when neither "cause" nor "long
term disability" exists, and provided that you release BSQUARE Corporation and
its agents from any and all employment-related claims in a signed, written
release satisfactory in form and substance to BSQUARE Corporation, BSQUARE
Corporation shall pay you a consideration payment as follows:

<PAGE>

Scott Mahan
December 29, 2003
Page 2

        BSQUARE Corporation shall pay to you severance equal to six months of
        your then annual base salary. If BSQUARE Corporation gives you at least
        a full month's advance notice of termination, however, the severance
        payments shall be reduced by one month's salary for each full month of
        advance termination notice given. These severance payments shall be paid
        out at the rate of your final base salary on regular payroll days post
        termination, subject to legally required and any individually agreed
        upon payroll deductions. During this period, you would not be considered
        an employee and would therefore receive no Paid Time Off accrual, nor
        would you be entitled to benefits under BSQUARE's health and welfare
        plans or retirement savings plan as an active employee. Also during this
        period, your stock options will continue to vest until the final payment
        is made. You will have ninety days from the date final payment is made
        in which to exercise any vested options, and any non-vested options
        would terminate as of the date final payment is made.

For purposes of the severance provision indicated above, "cause" is defined on
attachment A hereto, and "long term disability" is defined in our sponsored Long
Term Disability group insurance plan.

This offer is contingent upon compliance with the Immigration Reform and Control
Act of 1986. The Act requires you to establish your identity and employment
eligibility. To do so, on your start date you will be required to complete
Section I of the Employment Eligibility Verification Form, I-9.

Please signify your acceptance of this offer by signing a copy of this letter
and the attached Proprietary Rights Agreement and returning both within 5
business days of receipt.

On behalf of BSQUARE CORPORATION, I welcome you aboard. If you have any
questions or concerns, please feel free to contact me.

Sincerely,                                   Accepted By:

--------------------------------------       -----------------------------------
Brian Crowley                     Date       Scott Mahan                    Date
President and CEO
BSQUARE Corporation

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Scott Mahan
December 29, 2003
Page 3
                                  ATTACHMENT A

        For purposes of this agreement "cause" means and is limited to
dishonesty, fraud, commission of a felony or of a crime involving moral
turpitude, destruction or theft of Company property, physical attack to a fellow
employee, intoxication at work, use of controlled substances or alcohol to an
extent that materially impairs Employee's performance of his or her duties,
willful malfeasance or gross negligence in the performance of Employee's duties,
violation of law in the course of employment that has a material adverse impact
on Company or its employees, Employee's failure or refusal to perform Employee's
duties, Employee's failure or refusal to follow reasonable instructions or
directions, misconduct materially injurious to Company, neglect of duty, poor
job performance, or any material breach of Employee's duties or obligations to
Company that results in material harm to Company.

        For purposes of this agreement, "neglect of duty" means and is limited
to the following circumstances: (i) Employee has, in one or more material
respects, failed or refused to perform Employee's job duties in a reasonable and
appropriate manner (including failure to follow reasonable directives), (ii) the
Board, or a duly appointed representative of the Board, has counseled Employee
in writing about the neglect of duty and given Employee a reasonable opportunity
to improve, and (iii) Employee's neglect of duty either has continued at a
material level after a reasonable opportunity to improve or has reoccurred at a
material level within one year after Employee was last counseled.

        For purposes of this agreement, "poor job performance" means and is
limited to the following circumstances: (i) Employee has, in one or more
material respects, failed to perform Employee's job duties in a reasonable and
appropriate manner, (ii) the Board, or a duly appointed representative of the
Board, has counseled Employee in writing about the performance problems and
given Employee a reasonable opportunity to improve, and (iii) Employee's
performance problems either have continued at a material level after a
reasonable opportunity to improve or the same or similar performance problems
have reoccurred at a material level within one year after Employee was last
counseled.<PAGE>

                                                                   Exhibit 10.21

November 7, 2003

Carey E. Butler

Dear Carey,

BSQUARE CORPORATION is pleased to extend to you an offer for employment as our
Vice President of Professional Consulting Services. You will be paid bi-weekly
at a rate equivalent to an annual salary of $160,000. Your job classification is
Executive. You will be hired as an exempt employee, so you will not be entitled
to overtime. In addition to your base pay, BSQUARE offers you the following
bonus program:

-   $40,000 potential bonus for the first six months of work at BSQUARE. $20,000
    of this bonus is guaranteed and will be paid after you have been with
    BSQUARE for 90 days. The other $20,000 potential bonus payout will be
    subject to your achievement of the objectives that you and Brian Crowley
    will agree to when you begin working at BSQUARE.

-   As of July 1, 2004, you will have a yearly bonus potential of 50% of your
    base salary, based upon hitting mutually agreed upon performance objectives.
    Bonus will be paid every six months. 70% of the bonus amount will be based
    on PES group profitability. 30% of the bonus amount will be based on overall
    BSQUARE profitability. The bonus program after July 1, 2004 is dependant
    upon the BSQUARE Board of Directors approval to resume the executive bonus
    program at BSQUARE.

BSQUARE CORPORATION also extends the following benefits:

-   a medical, dental, vision, life and disability plan

-   a 401(k) retirement plan

-   10 paid holidays and 15 days of paid time off

-   Options to purchase 100,000 shares of company stock, subject to approval by
    BSQUARE Board of Directors.

-   Other discretionary benefits

BSQUARE CORPORATION is an established product development and engineering
contracting company with a promising outlook. Your meaningful participation will
greatly enhance our ability to retain our current contracting obligations and,
in the future, will enable BSQUARE CORPORATION to pursue and secure other
contracts.

YOUR EMPLOYMENT IS AT-WILL AND ACCORDINGLY, YOU OR BSQUARE CORPORATION MAY
TERMINATE THIS EMPLOYMENT RELATIONSHIP AT ANY TIME WITH OR WITHOUT NOTICE OR
CAUSE.

If BSQUARE Corporation terminates your employment when neither cause (as defined
in Attachment A to this letter) nor permanent disability exists, and provided
that you release BSQUARE Corporation and its agents from any and all claims in a
signed, written release satisfactory in form and substance to BSQUARE
Corporation, BSQUARE Corporation shall pay you an amount equal to four months of
your base salary in severance. Any severance payment shall be paid out at your
normal salary rate in a lump sum, and will be subject to normal payroll
deductions, subject to and following your execution of the written release.

Carey E. Butler
November 6, 2003
Page 2

<PAGE>
This offer is contingent upon compliance with the Immigration Reform and Control
Act of 1986. The Act requires you to establish your identity and employment
eligibility. To do so, on your start date you will be required to complete
Section I of the Employment Eligibility Verification Form, I-9.

Please signify your acceptance of this offer by signing a copy of this letter
and the attached Proprietary Rights Agreement and returning both within 5
business days of receipt.

On behalf of BSQUARE CORPORATION, I hope to welcome you aboard. If you have any
questions or concerns, please feel free to contact me.

                                               Able to begin work

                                               ---------------------------------
                                               Date

Sincerely,                                     Accepted By:

------------------------------------           ---------------------------------
Brian Crowley               Date               Carey E. Butler           Date
President and CEO
BSQUARE Corporation

<PAGE>

                                  ATTACHMENT A

        For purposes of this agreement "cause" means and is limited to
dishonesty, fraud, commission of a felony or of a crime involving moral
turpitude, destruction or theft of Company property, physical attack to a fellow
employee, intoxication at work, use of narcotics or alcohol to an extent that
materially impairs Employee's performance of his or her duties, willful
malfeasance or gross negligence in the performance of Employee's duties,
violation of law in the course of employment that has a material adverse impact
on Company or its employees, Employee's failure or refusal to perform Employee's
duties, Employee's failure or refusal to follow reasonable instructions or
directions, misconduct materially injurious to Company, neglect of duty, poor
job performance, or any material breach of Employee's duties or obligations to
Company that results in material harm to Company.

        For purposes of this agreement, "neglect of duty" means and is limited
to the following circumstances: (i) Employee has, in one or more material
respects, failed or refused to perform Employee's job duties in a reasonable and
appropriate manner (including failure to follow reasonable directives), (ii) the
President has counseled Employee in writing about the neglect of duty and given
Employee a reasonable opportunity to improve, and (iii) Employee's neglect of
duty either has continued at a material level after a reasonable opportunity to
improve or has reoccurred at a material level within one year after Employee was
last counseled.

        For purposes of this agreement, "poor job performance" means and is
limited to the following circumstances: (i) Employee has, in one or more
material respects, failed to perform Employee's job duties in a reasonable and
appropriate manner, (ii) the President has counseled Employee in writing about
the performance problems and given Employee a reasonable opportunity to improve,
and (iii) Employee's performance problems either have continued at a material
level after a reasonable opportunity to improve or the same or similar
performance problems have reoccurred at a material level within one year after
Employee was last counseled.

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