Document:

Winland Electronics, Inc.

 

EXHIBIT 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

     This Amendment to Employment Agreement is effective as of March 25, 2002
between Winland Electronics, Inc., a Minnesota Corporation (the “Corporation”),
and Kirk P. Hankins (“Employee”).

RECITALS

     A.     The Corporation and Employee are parties to an Employment Agreement
dated January 1, 1999 (the “Employment Agreement”) which provides at Section
2.1 that the Employee shall be employed as Vice President of Marketing of the
Corporation.

     B.     Effective January 21, 2002, the Corporation offered Employee the
position of Vice President of Sales – EMS Eastern Region and asked him to
assume the duties associated with such position and Employee accepted the
Corporation’s offer.

     C.     The Corporation and Employee wish to amend the Employment Agreement to
reflect the Employee’s current position and related agreements between the
parties.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained in this Amendment, the parties agree as
follows:

     1.     Section 2.1. The first sentence of Section 2.1 of the Employment
Agreement is hereby amended to read as follows: “During the Initial Term,
Employee shall be employed as Vice President of Sales – EMS Eastern Region of
the Corporation and/or such other positions to which the Board of Directors of
the Corporation may appoint Employee.”

     2.     Section 2.1. The following language shall be added to Section 2.1 of
the Employment Agreement:

		
	 	     “As Vice President of Sales – EMS Eastern Region, Employee’s primary
responsibility shall be to increase the sales market place of the
Corporation’s electronic manufacturing services (EMS) and design
engineering services within the eastern region of the United States of
America. Employee’s primary focus shall be to develop the Corporation’s
sales in the eastern region of the United States of America and the
territories within such region through the development and execution of a
sales plan for specific territories within the eastern United States of
America to be approved by Lorin Krueger.”

     3.     New Section 2.3. The following language shall be added as a new
Section 2.3 to the Employment Agreement:

		
	 	     “2.3) Subcontractors/Referral Sources. Employee may use paid
subcontractors or referral sources provided (1) Employee obtains written
prior approval from Lorin

 

 

		
	 	Krueger or his designee before using such services and (2) the
subcontractor or referral source is subject to a signed agreement with
the Corporation for such services.”

     4.     Section 3.1. The following language shall be added to Section 3.1 of
the Employment Agreement:

		
	 	     “As compensation for his services to the Corporation, Employee shall
be paid an annual base salary of Seventy Five Thousand Dollars
($75,000.00). The Corporation shall review such salary from time and
time and adjust it as necessary to account for increases to the cost of
living.”

     5.     New Section 3.5. The following language shall be added as a new
Section 3.5 to the Employment Agreement:

		
	 	     “3.5) Commissions. As long as Employee continues to work for the
Corporation in the eastern region of the United States of America, the
Corporation shall pay Employee a commission of one percent (1%) on all
sales to new customers Employee directly acquires from his approved
territory or assigned accounts. If Employee is transferred to a
different sales territory by the Corporation, he will be paid a one
percent (1%) commission on all sales to new customers he directly
acquired from the prior territory for a period of twelve (12) months
after such transfer; the next twelve (12) months Employee will be paid a
one-half percent (1/2%) commission on all sales to customers he directly
acquired from the prior territory; at the end of the twenty-four (24)
month period of change in territory, commission payments will cease in
the prior territory unless agreed to in writing by Lorin Krueger.
Commissions on sales from assigned territories other than the eastern
region of the United States of America will be subject to agreement
between the parties. Sales to existing customer accounts (as of the date
of this Amendment to Employment Agreement) will be excluded from any
commission unless specifically stated in writing by Lorin Krueger.
Commissions are deemed earned and payable upon shipment of the goods to
the customer and not before. “Directly acquires” shall mean solely as a
result of Employee’s own efforts and not the efforts of Employee’s or the
Corporation’s representatives or agents. Commissions will be paid on the
last day of the month in which the commission was earned. Commissions
paid to Employee per calendar year shall not exceed (shall be capped at)
one and one-half times Employee’s base salary for that calendar year.
Upon Employee’s separation from employment, for whatever reason, the
Corporation will pay Employee for those commissions earned (orders
shipped) through his last day of employment. The Corporation reserves
the right to modify Employee’s commission plan at any time with notice to
Employee.”

     6.     New Section 3.6. The following language shall be added as a new
Section 3.6 to the Employment Agreement:

		
	 	     “3.6) Additional Bonus. The Corporation shall pay Employee a bonus
of Five Thousand Dollars ($5,000.00), less deductions and withholdings.
Such bonus shall be payable in equal installments on February 28, 2002,
March 31, 2002 and April 30, 2002. Employee must continue to be employed
by the Corporation on each payment date in order to receive the bonus pay
for that month; if Employee is no longer employed by the

 

 

		
	 	Corporation he will not receive a bonus payment for the month in which
his employment ended or any subsequent months.”

     7.     New Section 3.7. The following language shall be added as a new
Section 3.7 to the Employment Agreement:

		
	 	     “3.7) Incentive Stock Options. The Corporation hereby acknowledges
and agrees that it granted Employee 10,000 shares of incentive stock
options on December 31, 1998. The incentive stock options will vest over
a five year period with twenty percent (20%) exercisable per year. The
terms and conditions applicable to Employee’s incentive stock option
grant shall be controlled by the Corporation’s separate Stock Option
Plan.”

     8.     Other Terms. Except as provided in the immediately preceding
paragraph, all other terms of the Employment Agreement shall remain valid and
enforceable to the same extent as before this Amendment.

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

	 	 	 	 	 	 	 
	 	 	EMPLOYEE:
	 
	Date: March 25, 2002	 	/s/
	 	Kirk P. Hankins

Kirk P. Hankins
	 
	 	 	WINLAND ELECTRONICS, INC.
	 
	Date: March 25, 2002	 	
By:
	 	/s/

Its:
	 	Lorin Krueger

Lorin Krueger

President and CEOWinland Electronics, Inc.

 

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

     This Employment Agreement (“Agreement”) is effective as of the 8th day of
April, 2002 by and between Winland Electronics, Inc., a Minnesota corporation,
(the “Company”), and Dale Nordquist (the “Employee”).

RECITALS

     A.     The Company is engaged in the business of electronic design and
manufacturing services and provides electronic design and manufacturing
services to its customers.

     B.     The Company, through its research, development and expenditure of
funds, has developed confidential information, including trade secrets.

     C.     Employee commenced employment with the Company on or about October 29,
2001 as Vice President of Sales.

     D.     During his employment, Employee has had and will continue to have
access to the Company’s valuable Confidential Information (as defined below),
has contributed and may continue to contribute to Confidential Information and
acknowledges that the Company will suffer irreparable harm if Employee uses
Confidential Information outside his employment or makes unauthorized
disclosure of Confidential Information to any third party.

Article 1

EMPLOYMENT AND TERMS OF AGREEMENT

     1.1 Employment. The Company employs Employee as its Vice President of
Sales.

     1.2 Duties.

	 	a.	 	During his employment with the Company, Employee
shall serve the Company faithfully and to the best of his
ability and shall devote his full business and professional
time, energy, and diligence to the performance of the duties
of such position. Employee shall perform such duties for the
Company (i) as are customarily incident to his position and
(ii) as may be assigned or delegated to him from time to time
by the CEO or the Board of Directors. Employee’s position
carries the primary responsibility of increasing the sales of
Company’s electronic manufacturing services (EMS) and design
engineering services in the Midwest region of Minnesota, North
Dakota, South Dakota, Western Wisconsin, Iowa, Northern
Missouri and Nebraska, and any and all other responsibilities
that may be assigned to Employee. Other focused accounts and
expanded responsibilities may be assigned to Employee from
time to time. During

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	 	 	 	his employment with the Company,
Employee shall not engage in any other business activity that
would conflict or interfere with his ability to perform his
duties under this Agreement.
	 
	 	b.	 	Employee agrees to be subject to the Company’s
control, rules, regulations, policies and programs. Employee
further agrees that he shall carry on all correspondence,
publicity and advertising in the Company’s name and he shall
not enter into any contract on behalf of the Company except as
expressly authorized by the Company.

     1.3 Term of Employment. Employee’s employment with the Company shall be
“at will,” meaning either Employee or the Company may terminate the employment
relationship at any time, for any or no reason, with or without notice.

Article 2

COMPENSATION AND BENEFITS

     2.1 Base Salary. As compensation for his services to the Company,
Employee shall be paid an initial annual base salary of Seventy Thousand
Dollars ($70,000.00), which rate shall be reviewed by the Company and subject
to change from time to time. The base salary shall be payable bi-weekly in
accordance with the Company’s standard payroll practices. Employee’s base
salary, and all other compensation and benefits provided by the Company, shall
be subject to required and authorized deductions and withholdings.

     2.2 Commissions. Company shall pay Employee a commission of one percent
(1%) on all sales to new customers Employee directly acquires from the account
territory of Minnesota, North Dakota, South Dakota, Western Wisconsin, Iowa,
Northern Missouri and Nebraska or other assigned accounts. Commissions are
deemed earned and payable upon shipment of the goods to the customer and not
before. “Directly acquires” shall mean solely as a result of Employee’s own
efforts and not the efforts of Employee’s or Company’s representatives or
agents. A list of Company’s customers that were existing customers as of
Employee’s hire date is attached here to as Exhibit A. Employee is not
eligible for commissions from sales to those customers listed on Exhibit A,
unless specially stated in writing by the CEO. Monthly commissions will be paid
by the 15th day of the proceeding month in which the commission was earned.
Commissions paid to Employee per calendar year shall not exceed (shall be
capped at) one and one-half times Employee’s base salary for that calendar
year.

     2.3 Signing Bonus. Company shall pay Employee a signing bonus of Fifteen
Thousand Dollars ($15,000.00), less deductions and withholdings. Such bonus
shall be payable in equal installments of $2,500.00 each on November 30, 2001,
December 31, 2001, January 31, 2002, February 28, 2002, March 31, 2002, and
April 30, 2002. Employee must continue to be employed by Company on each
payment date in order to receive the bonus pay for that month; if Employee is
no longer employed by Company he will not receive a bonus payment for the month in
which his employment ended or any subsequent months.

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     2.4 Incentive Stock Options. Company hereby acknowledges and agrees that
it granted Employee 36,000 shares of incentive stock options to Employee on
October 29, 2001. The incentive stock options will vest over a five year
period with twenty percent (20%) exercisable per year with the first 20%
exercisable after the first year of employment. The terms and conditions
applicable to Employee’s incentive stock option grant shall be controlled by
Company’s separate Stock Option Plan.

     2.5 Benefits. Employee shall be eligible to participate in or receive
benefits under employee benefit plans, health plans, or arrangements, if any,
made available from time to time by the Company to its employees as set forth
in an employee manual or otherwise, including but not limited to medical,
dental, and life insurance coverage, long-term disability insurance coverage,
401k benefits, and employee stock purchase plan benefits to the extent Employee
meets the eligibility requirements to receive such benefits. Nothing in this
Agreement is intended to or shall in any way restrict the Company’s right to
amend, modify or terminate any of its benefits or benefit plans during the term
of Employee’s employment.

     2.6 Miscellaneous Benefits. The Company shall provide Employee the
following additional benefits:

	 	a.	 	Reimbursement of all ordinary and necessary
expenses incurred by Employee for the Company, in accordance
with the Company’s policies and practices with regard to
documentation and payment of such expenses.
	 
	 	b.	 	Paid time off in accordance with the Company’s
paid time off policy.

Article 3

TERMINATION OF EMPLOYMENT

     3.1 Termination. Either Employee or the Company may terminate the
employment relationship at any time, for any or no reason, with or without
notice.

     3.2 Return of Property. Immediately upon termination (or at such earlier
time as requested by the Company or its designees), Employee shall deliver to
the Company all of its property, including but not limited to all work in
progress, research data, equipment, originals and copies of documents and
software, customer information and lists, financial information, and all other
material in his possession or control that belongs to the Company or its
customers or contains Confidential Information.

Page 3 

 

Article 4

CONFIDENTIALITY

     4.1 Confidential Information. “Confidential Information” shall mean any
information not generally known or readily ascertainable by the Company’s
competitors or the general public. Confidential Information includes, but is
not limited to, use of or customization to computer, software, and/or internet
applications; data of any type that is created by Employee, is provided, or to
which access is provided, in the course of Employee’s employment by the
Company; data or conclusions or opinions formed by Employee in the course of
employment; manuals; trade secrets; methods, procedures, or techniques
pertaining to the business of the Company; specifications; systems; price
lists; marketing plans; sales or service analyses; financial information;
customer names or other information; supplier names or other information;
employee names or other information; research and development data; diagrams;
drawings; videotapes, audiotapes, or computerized media used as training
regimens; and notes, memoranda, notebooks, and records or documents that are
created, handled, seen, or used by Employee in the course of employment.
Confidential Information does not include information that Employee can
demonstrate by reliable, corroborated documentary evidence (1) is generally
available to the public or (2) became generally available to the public through
no act or failure to act by Employee.

     4.2 Confidentiality Restrictions. Employee agrees at all times to use all
reasonable means to keep Confidential Information secret and confidential.
Employee shall not at any time (including after termination of his employment
with the Company) use, disclose, duplicate, record, or in any other manner
reproduce in whole or in part any Confidential Information, except as necessary
for the performance of Employee’s duties on behalf of the Company. Employee
shall not at any time provide services to any person or entity if providing
such services would require or likely result in his using or disclosing
Confidential Information. Upon termination of Employee’s employment with the
Company, Employee shall immediately return to the Company all originals and
copies of Confidential Information and other the Company materials and property
in Employee’s possession. Employee acknowledges that use or disclosure of any
of the Company’s confidential or proprietary information in violation of this
Agreement would have a materially detrimental effect upon the Company, the
monetary loss from which would be difficult, if not impossible, to measure.

     4.3 Survival of Restrictions. The parties agree that the restrictions
contained in this Article 4 shall survive the termination of this Agreement and
Employee’s employment and shall apply no matter how Employee’s employment
terminates and regardless of whether his termination is voluntary or
involuntary.

     4.4 Remedies. The parties acknowledge and agree that, if a court,
arbitrator, mediator, jury or other individual or entity entrusted with
authority to resolve a dispute between Employee and the Company (or Employee
admits to) makes a finding that Employee breached or threatened to breach the
terms of this Article 4, the Company shall be entitled as a matter of right

Page 4 

 

     to
injunctive relief and reasonable attorneys’ fees, costs, and expenses, in
addition to any other remedies available at law or equity.

Article 5

MISCELLANEOUS PROVISIONS

     5.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, without reference to its
conflict of law provisions.

     5.2 Entire Agreement. Except as expressly stated herein, this Agreement
constitutes the entire understanding of the Company and Employee and supersedes
all prior agreements, understandings, and negotiations between the parties,
whether oral or written, including the offer letter from Company to Employee
dated October 15, 2001. No modification, supplement, or amendment of any
provision hereof shall be valid unless made in writing and signed by the
parties.

     5.3 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and Employee and their respective successors,
executors, and administrators, except that the services to be performed by
Employee are personal and are not assignable.

     5.4 Captions. The captions set forth in this Agreement are for the
convenience only and shall not be considered as part of this Agreement or as in
any way limiting or amplifying the terms and conditions hereof.

     5.5 No Conflicting Obligations. Employee represents and warrants to the
Company that he is not under, or bound to be under in the future, any
obligation to any person or entity that is or would be inconsistent or in
conflict with this Agreement or would prevent, limit, or impair in any way the
performance by him of his obligations hereunder, including but not limited to
any duties owed to any former employers not to compete or use or disclose
confidential information.

     5.6 Waivers. The failure of a party to require the performance or
satisfaction of any term or obligation of this Agreement, or the waiver by a
party of any breach of this Agreement, shall not prevent subsequent enforcement
of such term or obligation or be deemed a waiver of any subsequent breach.

     5.7 Severability. In the event that any provision hereof is held invalid
or unenforceable by a court of competent jurisdiction, the Company and Employee
agree that that part should be modified by the court to make it enforceable to
the maximum extent possible. If the part cannot be modified, then that part
may be severed and the other parts of this Agreement shall remain enforceable.

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     5.8 Notices. Any notices given hereunder shall be in writing and
delivered or mailed by registered or certified mail, return receipt requested:

	 	 	 	 	 	 	 
	 	 	
(a)
	 	If to the Company:
	 	Winland Electronics, Inc.

Attn: Lorin Krueger

1950 Excel Drive

Mankato, Minnesota 56001
	 	 	 	 	 	 	 
	 	 	
(b)
	 	If to Employee:
	 	Dale Nordquist
5090 Larch Lane

Plymouth, Minnesota 55442

     5.9 Counterparts. More than one counterpart of this Agreement may be
executed by the parties hereto, and each fully executed counterpart shall be
deemed an original.

     With the intention of being bound hereby, the parties have executed this
Agreement as of the date set forth above.

	 	 	 	 	 
	 	 	 	 	EMPLOYEE:
	 
	Date:	 	04/08/02

	 	/s/     Dale Nordquist

Dale Nordquist
	 
	 	 	 	 	WINLAND ELECTRONICS, INC.
	 
	Date:	 	
04/08/02

	 	By:        /s/ Lorin Krueger

        Lorin Krueger

Its: President and CEO

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