Document:

EXHIBIT 10.19

                         EXECUTIVE EMPLOYMENT AGREEMENT

                  THIS EXECUTIVE EMPLOYMENT AGREEMENT ("AGREEMENT") effective
         the 1ST DAY OF OCTOBER, 2000, is by and between XATA Corporation, a
         Minnesota corporation ("Company"), and WILLIAM P. FLIES ("Executive"),
         a Minnesota resident.

                                    RECITALS:

 WHEREAS, the Company desires to employ Executive

 WHEREAS, Executive desires to be employed by the Company; and

                  WHEREAS, Company and Executive desire to set forth in writing
            the terms and conditions of their agreements and understanding;

                  NOW THEREFORE, in consideration of the mutual covenants and
            undertakings contained in this Agreement, the Company and the
            Executive agree as follows:

            A.    Executive is employed by the Company in the capacity of
                  PRESIDENT & CHIEF EXECUTIVE OFFICER (CEO) effective the date
                  of this Agreement.

            B.    The Company is currently engaged in the development of onboard
                  information technology products. (the "Products") and in
                  marketing such Products to the transportation industry
                  (hereafter the "Company's Business").

            C.    Executive has certain unique skills, talents, contacts,
                  judgment, and knowledge, all to the benefit of the Company,
                  and has knowledge of the Company's Business, strategies, and
                  objectives.

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      1.    DEFINITIONS. Capitalized terms used in this Agreement shall have
            their defined meaning throughout the Agreement. The following terms
            shall have the meanings set forth below, unless the context clearly
            requires otherwise.

            1.1   "AGREEMENT" means this Executive Employment Agreement, as from
                  time to time amended.

            1.2   "BASE SALARY" means the total annual cash compensation payable
                  on a regular periodic basis, without regard to voluntary or
                  mandatory deferrals, as set forth at Section 3.1 of this
                  Agreement.

            1.3   "BENEFICIARY" means the person or persons designated in
                  Exhibit "B" of this Agreement and signed by Executive to
                  receive any benefits payable after Executive's death pursuant
                  to this Agreement. In the absence of such designation or in
                  the event that all of the persons so designated predecease
                  Executive, Beneficiary means the executor, administrator or
                  personal representative of Executive's estate.

            1.4   "BOARD" means the Board of Directors of the Company.

            1.5   "CAUSE" has the meaning set forth at Section 4.2 of this
                  Agreement.

            1.6   "COMPANY" means all of the following, jointly and severally:
                  (a) XATA Corporation and
                  (b) any Successor.

            1.7   CONFIDENTIAL INFORMATION" means information that is
                  proprietary to the Company or proprietary to others and
                  entrusted to the Company that has not been published and/or
                  disclosed to the public, whether or not trade secrets, and
                  including, but not limited to, the Company's business plans,
                  advertising and/or marketing plans, financial performance,
                  financial projections, customer lists, pricing information,
                  personnel matters, or any other matter considered or
                  reasonably expected to be considered by the Company regarding
                  the Company's business and its employees.

            1.8   "DATE OF TERMINATION" has the meaning set forth at Section
                  4.7.2 of this Agreement.

            1.9   "DISABILITY" shall mean a physical or mental infirmity that
                  impairs the Executive's ability to substantially perform his
                  duties if it continues for a period of at least 180
                  consecutive days. Notwithstanding anything contained in this
                  Agreement to the

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                  contrary, until the Date of Termination specified in a Notice
                  of Termination relating to the Executive's Disability, the
                  Executive shall be entitled to return to his position with the
                  Company, in which event no Disability of the Executive will be
                  deemed to have occurred.

            1.10  "GOOD REASON" has the meaning set forth at Section 4.4 of this
                  Agreement.

            1.11  "INCENTIVE BONUS" means the actual cash bonus payable to the
                  Executive as set forth in Section 3.1 of this Agreement.

            1.12  "NOTICE OF TERMINATION" has the meaning set forth at Section
                  4.7.1 of this Agreement.

            1.13  "PLAN" means any bonus or incentive compensation agreement,
                  plan, program, policy or arrangement sponsored, maintained or
                  contributed to by the Company, to which the Company is a party
                  or under which employees of the Company are covered,
                  including, without limitation, any stock option, restricted
                  stock or any other equity-based compensation plan, annual or
                  long-term incentive (bonus) plan, and any employee benefit
                  plan, such as a thrift, pension, profit sharing, deferred
                  compensation, medical, dental, disability, accident, life
                  insurance, automobile allowance, perquisite, fringe benefit,
                  vacation, sick or parental leave, severance or relocation plan
                  or policy or any other agreement, plan, program, policy, or
                  any other agreement, plan, program, policy or arrangement
                  intended to benefit employees or executive officers of the
                  Company.

            1.14  "SUBSIDIARY" means any corporation at least a majority of
                  whose securities having ordinary voting power for the election
                  of the directors (other than securities having such power only
                  by reason of the occurrence of a contingency) is at the time
                  owned by the Parent Corporation, the Company and/or one or
                  more Subsidiaries.

            1.15  "SUCCESSOR" has the meaning set forth at Section 9.1.1 of this
                  Agreement.

            1.16  "INVENTIONS" means ideas, improvements and discoveries,
                  whether or not such are patentable or copyrightable, and
                  whether or not in writing or reduced to practice.

            1.17  "WORKS OF AUTHORSHIP" means writings, drawings, software, and
                  any other works of authorship, whether or not such are
                  copyrightable.

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      2.    EMPLOYMENT, DUTIES AND TERMS

            2.1   EMPLOYMENT. Upon the terms and conditions set forth in this
                  Agreement, the Company hereby employs Executive, and Executive
                  accepts such employment as PRESIDENT & CHIEF EXECUTIVE OFFICER
                  (CEO) of the Company. Except as expressly provided herein,
                  termination of this Agreement by either party or by mutual
                  agreement of the parties shall also terminate the Executive's
                  employment by the Company.

            2.2   DUTIES. During the term of this Agreement, and excluding any
                  periods of vacation, sick, disability or other leave to which
                  Executive is entitled, Executive agrees to devote reasonable
                  attention and time during normal business hours to the
                  business and affairs of the Company and, to the extent
                  necessary to discharge the responsibilities assigned to
                  Executive hereunder and under the Company's bylaws, as amended
                  from time to time, to use Executive's reasonable best efforts
                  to perform faithfully and efficiently such responsibilities.

            2.3   CERTAIN PROPRIETARY INFORMATION. If Executive possesses any
                  proprietary information of another person or entity as a
                  result of prior employment or relationship, Executive shall
                  honor any legal obligation that Executive has with that person
                  or entity with respect to such proprietary information.

            2.4   TERM. This Agreement shall be effective as of the date set
                  forth above, and shall be in effect until September 30, 2001,
                  provided that, commencing on October 1, 2001, and on each
                  October 1, thereafter, the term of this Agreement shall be
                  renewed automatically for the subsequent one-year period
                  unless either the Executive or the Company gives written
                  notice to the other party of its intent not to so extend this
                  Agreement at least 60 days prior to the end of the term of
                  this Agreement or the applicable renewal period, as the case
                  may be. At the time of renewal of this Agreement, the
                  Executive's compensation plan, as shown on Exhibit "A", and
                  Beneficiary Designation, as shown on Exhibit "B", will be
                  reviewed and updated by the Company and the Executive, which
                  updates will be dually noted by Signatures and dates by the
                  Executive and the Board's designated compensation
                  representative.

            2.5   RETURN OF PROPRIETARY PROPERTY. Executive agrees that all
                  property in Executive's possession belonging to the Company,
                  including without limitation, all documents, reports, manuals,
                  memoranda,

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                  computer print-outs, customer lists, credit cards, keys,
                  identification, products, access cards, automobiles, and all
                  other property relating in any way to the business of the
                  Company are the exclusive property of the Company, even if
                  Executive authored, created or assisted in authoring or
                  creating such property. Executive shall return to the Company
                  all such documents and property immediately upon termination
                  or at such earlier time as the Company may reasonably request.

            2.6   POSITION AND DUTIES.

                  (a)   During the Employment Period, Executive shall serve as
                        the PRESIDENT AND CHIEF EXECUTIVE OFFICER (CEO) of the
                        Company, and shall have the normal duties,
                        responsibilities and authority of an executive serving
                        in such position, subject to supervision and control by
                        the Board of Directors of the Company (the "Board").
                        During the Employment Period, Executive may also serve
                        as a director of the Company providing the Shareholders
                        elect the Executive to that position. During the
                        Employment Period, Executive may also serve as a
                        director of any affiliate of the Company designated by
                        the Board for so long as the Board or the affiliate's
                        shareholders, whichever applies, causes the Executive to
                        be elected to or appointed to such position, as the case
                        may be.

                  (b)   Executive shall report to THE BOARD OF DIRECTORS.

                  (c)   During the Employment Period, Executive shall devote his
                        best efforts and his full business time and attention
                        (except for permitted vacation periods, reasonable
                        periods of illness, or other incapacity and provided
                        such activities do not interfere with the performance by
                        Executive of his duties and responsibilities hereunder,
                        participation in charitable and civic endeavors and
                        management of Executive's personal investments and
                        business interests) to the business and affairs of the
                        Company, its subsidiaries and affiliates. Executive
                        shall perform his duties and responsibilities hereunder
                        to the best of his abilities in a diligent, trustworthy,
                        businesslike and efficient manner.

                  (d)   Executive shall perform his duties and responsibilities
                        hereunder principally in the Minneapolis, Minnesota
                        metropolitan area.

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      3.    COMPENSATION, BENEFITS AND EXPENSES.

            3.1   BASE SALARY/INCENTIVE BONUS/STOCK OPTIONS. Subject to Section
                  4.8, during the term of Executive's employment under this
                  Agreement and for as long thereafter as required pursuant to
                  Section 4, the Company shall pay Executive a Base Salary at an
                  annual rate that is not less than ONE HUNDRED EIGHTY THOUSAND
                  DOLLARS ($ 180,000) or such higher annual rate as may from
                  time to time be approved by the Board, such Base Salary to be
                  paid in substantially equal regular periodic payments in
                  accordance with the Company's regular payroll practices. If
                  Executive's Base Salary is increased from time to time during
                  the term of Executive's employment under this Agreement, the
                  increased amount shall become the Base Salary for the
                  remainder of the term and any extensions of Executive's term
                  of employment under this Agreement and for as long thereafter
                  as required pursuant to Section 4, subject to any subsequent
                  increases. In addition, the Executive shall be entitled to an
                  annual Incentive Bonus as described on Exhibit "A", which may
                  be modified from year to year contingent upon and adjusted by
                  the Company's achievement of goals defined by the Compensation
                  Committee of the Board and approved by the Board. In addition,
                  the Executive may be entitled to an annual grant of stock
                  options.

            3.2   BUSINESS EXPENSES. During the term of the Executive's
                  employment under this Agreement and as for as long thereafter
                  as required pursuant to Section 4, the Company shall, in
                  accordance with, and to the extent of its uniform policies in
                  effect from time to time, bear all ordinary and necessary
                  business expenses incurred by Executive in performing
                  Executive's duties as an executive officer of the Company,
                  including, without limitation, all travel and living expenses
                  while away from home on business in the service of the
                  Company, home telephone expenses incurred in service of the
                  Company, social and civic club membership and participation
                  expenses and entertainment expenses, provided that Executive
                  accounts promptly for such expenses to the Company in the
                  manner reasonably prescribed from time to time by the Company.

            3.3   FUTURE GRANT OF OPTIONS. The Company may grant to Executive
                  options to acquire shares of the Company's common stock as
                  described on Exhibit "A", which may be modified from year to
                  year as approved by the Board.

            3.4   DISCRETIONARY BONUSES. Executive shall be eligible to receive
                  bonuses from time to time as may be awarded to Executive by
                  the

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                  Board or a compensation committee appointed by the Board which
                  recommendations will be approved by the Board in the Board's
                  sole discretion. The discretionary bonuses, if any, will be in
                  addition to any bonuses described in Exhibit "A".

            3.5   TERM LIFE INSURANCE. During the term of this Agreement, the
                  Company shall pay the premiums to purchase and maintain term
                  life insurance on the life of the Executive in an amount equal
                  to four times the Executive's Base Salary as in effect from
                  time to time as recorded on Exhibit "A", the benefit to be
                  payable to such Beneficiary as Executive shall advise the
                  Company and the insurer from time to time.

            3.6   NONASSIGNABILITY OF BENEFITS. Executive shall not transfer,
                  assign, encumber, or otherwise dispose of his right to receive
                  payments hereunder and, in the event of any attempted transfer
                  or assignment, the Company shall have no further liability to
                  Executive under this Agreement.

      4.    EARLY TERMINATION

            4.1   EARLY TERMINATION. Subject to the respective continuing
                  obligations of the parties pursuant to Section 5, this Article
                  4 sets forth the terms for early termination of the
                  Executive's employment under this Agreement.

            4.2   TERMINATION BY THE COMPANY FOR CAUSE. The company may
                  terminate this Agreement for Cause. A termination of
                  employment shall be for "Cause" if the Executive

                  (i)   has been convicted of a felony
                  (ii)  has engaged in an act or acts of personal dishonesty
                        intended to result in substantial personal enrichment of
                        the Executive at the expense of the Company, or
                  (iii) has intentionally engaged in other conduct that is
                        demonstrably and materially injurious to the Company,
                        monetarily or otherwise;
                  (iv)  the commission by Executive of a fraud;
                  (v)   the commission by Executive of any act involving
                        dishonesty or disloyalty with respect to the Company or
                        any of its subsidiaries or affiliates;
                  (vi)  conduct by Executive tending to bring the Company or any
                        of its subsidiaries or affiliates into substantial
                        public disgrace or disrespect;
                  (vii) gross negligence or willful misconduct by Executive with
                        respect to the Company or any of its subsidiaries or
                        affiliates.

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            4.3   TERMINATION BY COMPANY WITHOUT CAUSE. The Company may
                  terminate Executive's employment under this Agreement or any
                  renewal thereof at any time, provided that the Company shall
                  pay Executive all compensation due to Executive under this
                  Agreement for the remaining term of this Agreement or any
                  renewal thereof, as the case may be plus any compensation as
                  defined in Section 4.8.

            4.4   TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may
                  terminate Executive's employment under this Agreement for Good
                  Reason. Termination by Executive for "Good Reason" shall mean
                  termination of employment based on any one or more of the
                  following:

                  4.4.1 POSITION AND DUTIES. Assignment to Executive by the
                        Company of duties which are inconsistent with
                        Executive's position, duties, responsibilities, and
                        status with the Company, or a change in Executive's
                        titles or offices, or any removal of Executive from, or
                        any failure to reelect or reappoint Executive to any
                        such positions, except in connection with the
                        termination of his employment for Disability or Cause or
                        as a result of Executive's death or by Executive other
                        than for Good Reason;

                  4.4.2 COMPARABLE BENEFIT PLAN. Any failure to the Company to
                        continue in effect, or to provide a comparable
                        substitute for, any benefit plan or arrangement
                        (including, without limitation, any profit sharing plan,
                        executive supplemental medical plan, group life
                        insurance plan, and medical, dental, accident, and
                        disability plans but excluding incentive plans or
                        arrangements, which are the subject of Section 4.4.4) in
                        which Executive is participating as in effect on the
                        date hereof, (or any other plans providing executive
                        with substantially similar benefits) (hereinafter
                        referred to as "BENEFIT Plans"), or by the taking of any
                        action by the Company that would adversely affect
                        Executive's participation in or materially reduce
                        Executive's benefits under any such Benefit Plan or
                        deprive Executive of any material fringe benefit enjoyed
                        by Executive as in effect on the date hereof.

                  4.4.3 COMPARABLE INCENTIVE PLAN. Any failure by the Company to
                        continue in effect, or to provide a comparable
                        substitute for any incentive plan or arrangement
                        (including, without limitation, any incentive
                        compensation plan, long-term incentive plan, bonus or
                        contingent bonus arrangements or credits, the right to
                        receive performance awards, or similar

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                        incentive compensation benefits) in which Executive is
                        participating, or is eligible to participate,
                        (hereinafter referred to as "INCENTIVE PLANS") or the
                        taking of any action by the Company which would
                        adversely affect Executive's participation in any such
                        Incentive Plan.

            4.5   TERMINATION IN THE EVENT OF DEATH OF DISABILITY. The term of
                  Executive's employment under this Agreement shall terminate in
                  the event of Executive's death or Disability, subject to the
                  provisions of Section 4.8 hereof.

            4.6   TERMINATION BY MUTUAL AGREEMENT. The parties may terminate
                  Executive's employment under this Agreement at any time by
                  mutual written agreement.

            4.7   NOTICE OF TERMINATION; DATE OF TERMINATION; OFFER OF CONTINUED
                  EMPLOYMENT. The provisions in this Section 4.7 shall apply in
                  connection with any early termination of Executive's
                  employment under this Agreement pursuant to this Section 4.

                  4.7.1 For purposes of this Agreement, A "NOTICE OF
                        TERMINATION" shall mean a notice which shall indicate
                        the specific termination provisions in this Agreement
                        relied upon and shall set forth in reasonable detail the
                        facts and circumstances claimed to provide the basis for
                        such termination. Any purported termination by the
                        Company or by the Executive pursuant to this Section 4
                        (other than a termination by mutual agreement pursuant
                        to Section 4.6 or death) shall be communicated by
                        written Notice of Termination to the other party hereto.

                  4.7.2 For purposes of this Agreement, "DATE OF TERMINATION"
                        shall mean: (a) if Executive's employment is terminated
                        due to death, the last day of the month first following
                        the month during which Executive's death occurs; (b) if
                        Executive's employment is to be terminated for
                        Disability, thirty (30) calendar days after Notice of
                        Termination is given; (c) if Executive's employment is
                        terminated by the Company for Cause or by Executive for
                        Good Reason, the date specified in the Notice of
                        Termination; (d) if Executive's employment is terminated
                        by mutual agreement of the parties, the date specified
                        in such agreement; or (e) if Executive's employment is
                        terminated for any other reason, the date specified in
                        the Notice of Termination, which in no event shall be a
                        date earlier than thirty (30) calendar days after the
                        date on which a Notice of Termination is given, unless
                        an

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                        earlier date has been expressly agreed to by Executive
                        in writing either in advance of, or after, receiving
                        such Notice of Termination.

            4.8   COMPENSATION UPON TERMINATION, DEATH OR DURING DISABILITY.

                  4.8.1 If the Executive shall become disabled or incapacitated
                        to the extent that he is unable to perform his duties
                        hereunder, by reason of medically determinable physical
                        or mental impairment, as determined by a doctor mutually
                        acceptable to the Company and the Executive and retained
                        by the Company, Executive shall nevertheless continue to
                        receive the compensation and benefits provided under the
                        terms of this Agreement as follows: 100% of such
                        compensation and benefits for a period of 12 months, but
                        not beyond the Date of Termination, and 65% thereafter
                        until the Date of Termination. Such benefits noted
                        herein shall be reduced by any benefits otherwise
                        provided to the Executive during such period under the
                        provisions of disability insurance coverage in effect
                        for the Company's employees. Thereafter, Executive shall
                        be eligible to receive benefits provided by the Company
                        under the provisions of disability insurance coverage in
                        effect for the Company's employees. Upon returning to
                        active full-time employment, the Executive's full
                        compensation as set forth in this Agreement shall be
                        reinstated as of the date of commencement of such
                        activities. In the event that the Executive returns to
                        active employment on other than a full-time basis, then
                        his compensation (as set forth in Section 3 of this
                        Agreement) shall be reduced in proportion to the time
                        spent in said employment, or as shall otherwise be
                        agreed to by the parties.

                  4.8.2 If the Executive's employment under this Agreement is
                        terminated on account of Disability or death, the
                        Company shall, within ten (10) fiscal days following the
                        Date of Termination, pay any amounts due to Executive
                        under this Agreement through the Date of Termination,
                        pay any amounts due to Executive under this Agreement
                        through the Date of Termination, including, without
                        limitation, amounts to which Executive is entitled under
                        any Plan in accordance with the terms of such Plan, and
                        further including, without limitation, a pro rata
                        portion (prorated through the Date of Termination) of
                        any Target Incentive Bonus or other annual or long-term
                        bonus or incentive payments (for performance periods in
                        effect at the Date of Termination) to which

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                        Executive would have been entitled had Executive
                        remained continuously employed through the end of such
                        performance periods and continued to perform Executive's
                        duties in the same manner as performed immediately prior
                        to the Executive's death or Disability.

                  4.8.3 If Executive's employment under this Agreement is
                        terminated by the Company for Cause, or by Executive for
                        other than Good Reason, the Company shall pay Executive
                        only the Base Salary through the Date of Termination and
                        any amounts to which the Executive is entitled under any
                        Plan in accordance with the terms of such Plan.

                  4.8.4 If Executive's employment under this Agreement is
                        terminated by the mutual agreement of the parties under
                        Section 4.6, the Company shall provide Executive with
                        the payments and benefits specified in this Agreement.

                  4.8.5 If the Company terminates Executive's employment
                        hereunder without Cause other than in the event of death
                        or Disability (it being understood that a purported
                        termination for Disability or for Cause which is
                        disputed and finally determined not to have been proper
                        termination for Cause or Disability shall be a
                        termination by the Company without Cause) or if
                        Executive terminates his employment hereunder for Good
                        Reason in accordance with Section 4.4, the Company
                        shall:

                        4.8.5.1   continue to pay Executive's Base Salary in
                                  accordance with Section 3.1 at the annual rate
                                  in effect hereunder immediately prior to the
                                  Date of Termination in the same manner as if
                                  Executive had remained continuously employed
                                  for one additional year of this Agreement (12
                                  months);

                        4.8.5.2   cause Executive's continued participation in
                                  all Plans in accordance with Section 3.2 of
                                  this Agreement as if Executive remained
                                  continuously employed with the Company for the
                                  unexpired term of this Agreement for all
                                  purposes, including, without limitation,
                                  grants, awards, accruals and vesting
                                  thereunder; provided that, if such continued
                                  participation is not permissible under
                                  applicable law, the Company shall provide
                                  Executive with benefits substantially similar
                                  to those to which Executive would have been
                                  entitled

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                                  under those Plans in which Executive's
                                  continued participation is not permissible,
                                  and

                        4.8.5.3   reimburse the Executive for outplacement
                                  expenses up to $10,000, which amount shall be
                                  payable for services provided within the first
                                  twelve months following the Date of
                                  Termination upon submission to the Company of
                                  appropriate documentation evidencing
                                  Executive's payment for such services.

                  4.8.6 The payments determined pursuant to Section 4.8.5 shall
                        be mitigated to the extent of Executive's "earned
                        income" within the meaning of Section 911(d)(2)(A) of
                        the Internal Revenue Code of 1986, as amended (the
                        "Code") during the remainder of the period with respect
                        to which such payments pursuant to Section 4.8.5 are
                        required to be paid.

      5.    RESTRICTIVE COVENANTS. Except as otherwise provided in this
            Agreement, the Executive will not, during the period of his
            employment with the Company, and for a period of one (1) year
            thereafter (except for Section 5.1, with the time therein set
            forth), directly or indirectly, for the Executive or on behalf of or
            in conjunction with any other person, company, partnership,
            corporation or business of whatever nature:

            5.1   CONFIDENTIAL INFORMATION. Reveal to any person or entity
                  outside of the Company, except as may be explicitly necessary
                  as part of the direct responsibilities of the Executive's
                  position with the Company, any Confidential Information.
                  Executive shall keep the Company's confidential documents
                  secure and avoid the inadvertent or intentional disclosure of
                  the Company's business matters inside and/or outside the
                  Company. Disclosure of Confidential Information within the
                  Company shall only be on a need-to-know basis, as is required
                  or necessary to carry out the Executive's duties as an
                  employee of the Company. Executive will use reasonable and
                  prudent care to safeguard and protect and prevent the
                  unauthorized use and disclosure of Confidential Information.
                  The obligations contained in this Section 5.1 will survive for
                  as long as the company, in its sole judgment, considers the
                  information to be Confidential Information. The obligations
                  under this Section 5.1 will not apply to any Confidential
                  Information that is now or becomes generally available to the
                  public through no fault of Executive or to Executive's
                  disclosure of any Confidential Information required by law or
                  judicial or administrative process.

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            5.2   NON-COMPETITION. Directly or indirectly, own (except as a
                  shareholder of up to 5% of the outstanding stock in a publicly
                  traded corporation), manage, operate, participate in
                  ownership, participate in management, participate in operation
                  or control, or be employed by, or act as a consultant to, or
                  become an independent contractor with, or become an adviser
                  to, or be connected in any manner with, any individual or
                  other entity which engages in or has an interest in a business
                  that meaningfully competes with the Company's Business.
                  Notwithstanding the foregoing, it is agreed that Executive
                  shall not be in violation of his Section 5.2 if he is
                  associated with (a) a company which develops or markets
                  onboard information technology products which compete,
                  directly or indirectly, with the Company's Business if such
                  products accounted for less than 10% of the gross sales of
                  such company in its last fiscal year and are reasonably
                  expected to account for less than10% of its gross sales in the
                  current fiscal year, or (b) a division or department of any
                  company (even if such company competes with the Company) that
                  is not involved, directly or indirectly, in developing,
                  manufacturing or selling products that compete with the
                  Company's Business.

            5.3   NON-ENTICEMENT. Directly or indirectly interfere with the
                  contractual or other relationships between the Company and any
                  other employees, independent contractors, consultants,
                  prospective employees, prospective consultants, prospective
                  independent contractors to the Company, to be either employed
                  by or retained by the Company; or induce the Company's other
                  employees to leave the employ of the Company.

            5.4   NON-CUSTOMER INTERFERENCE. Call upon any person or entity
                  which is/was a customer or prospective customer or vendor of
                  the Company (including the Subsidiaries thereof) in direct
                  competition with the current Business of the Company or known
                  planned products or services of the Company, or its
                  Subsidiaries. As used herein, the term "customer" means any
                  entity to whom the Company, or its Subsidiaries, has provided
                  services within the twelve (12) month period prior to the date
                  of Executive's termination; the term "prospective customer"
                  means any entity that has been subject to documented sales and
                  marketing activity, other than mass mailings. by the Company,
                  or its Subsidiaries, within the twelve (12) month period prior
                  to the date of the Executive's termination; and "vendor" means
                  any entity serving as a source for any products sold by the
                  Company or entity producing products or services for the
                  Company to enable it to provide products and services to the
                  Company's customers.

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            5.5   NON-MERGER INTERFERENCE. Call upon, for the purpose of
                  acquiring or performing services for such entity, any
                  prospective acquisition or merger candidate which was either
                  called upon by the Company, or its Subsidiaries, or for which
                  the Company, or its Subsidiaries, made an acquisition or
                  merger analysis during the six (6) month period prior to the
                  date of Executive termination.

            5.6   INTERPRETATION. It is agreed by the parties that the foregoing
                  covenants in Section 5.1 through 5.5, inclusive, impose a
                  reasonable restraint on Executive in light of the Company's
                  Business and related activities on the date of the execution
                  of this Agreement.

            5.7   REMEDIES. Executive agrees that any breach or threatened
                  breach of the covenants set forth in this Section 5 will cause
                  the Company irreparable harm for which there is no adequate
                  remedy at law, and, without limiting other rights and remedies
                  the Company may have at law or under and pursuant to this
                  Agreement, Executive consents to remedies pursuant to this
                  Section 5.7, including, but not limited to, the issuance of an
                  injunction in favor of the Company enjoining the breach of any
                  of the aforesaid covenants by any court of appropriate
                  jurisdiction. Such injunction shall provide the Company with
                  at least a one (1) year contractual protection agreed to by
                  the parties, and in the event the Executive violates the terms
                  of the injunction, Executive agrees that a court of
                  appropriate jurisdiction shall have the power to extend the
                  length or breadth of the injunction to provide the Company
                  with the full measure of protection intended by this
                  Agreement, including, but not limited to, the extension of
                  such injunction for a reasonable period of time in order to
                  eliminate any commercial advantage which may be derived from a
                  misappropriation of Confidential Information or a breach or
                  default of the covenants set forth in Sections 5.2 through
                  5.5, inclusive. If any or all of the aforesaid covenants are
                  held not to be enforceable because of the scope or duration of
                  such covenant, or if applicable, the area covered by such
                  covenants, the parties agree that a court of appropriate
                  jurisdiction shall make such determination, and the court
                  shall have the power to reduce the scope, duration, and area
                  of any covenant (or one or more of the foregoing) to the
                  extent which allows maximum scope, duration and area as
                  permitted by applicable law. The covenants in this Section 5
                  protect not only the Company but also any operations
                  controlled by the Company or controlling the Company, whether
                  a Parent Corporation, Subsidiary, brother/sister corporation
                  or affiliate. The Executive shall pay reasonable attorneys'
                  fees, costs and expenses that may be incurred by the Company
                  in enforcing one or more of the covenants set forth in this
                  Section 5. Section 5 shall have

                                    14 of 23
<PAGE>

                  independent legal significance and shall survive termination
                  of this Agreement.

      6.    INVENTIONS

            6.1   DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND OTHER WORKS.
                  Executive shall promptly disclose to the Company in writing
                  all inventions and Works of Authorship which are conceived,
                  made, discovered, written or created by Executive alone or
                  jointly with another person, group or entity, whether during
                  the normal hours of his employment at the company or on
                  Executive's own time, during the term of this Agreement and
                  for one year after termination of this Agreement except as
                  exempted as described in 6.2 below. Executive shall assign all
                  rights to all such inventions and Works of Authorship to the
                  Company. Executive shall give the Company considers necessary
                  or desirable in order to transfer or record the transfer of
                  Executive's entire right, title and interest in such
                  inventions and Works of Authorship; and in order to enable the
                  Company to obtain exclusive patent, copyright, or other legal
                  protection for Inventions and Works of Authorship. The Company
                  shall bear any reasonable expenses in this regard.

            6.2   NOTICE: MINNESOTA LAW EXEMPTS FROM THIS AGREEMENT "AN
                  INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE
                  SECRET INFORMATION OF THE COMPANY WAS USED AND WHICH WAS
                  DEVELOPED ENTIRELY ON THE EXECUTIVE'S OWN TIME, AND (1) WHICH
                  DOES NOT RELATE (A) TO THE BUSINESS OF THE COMPANY, OR (B) TO
                  THE COMPANY'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR
                  DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK
                  PERFORMED BY EXECUTIVE FOR THE COMPANY."

            6.3   ADDITIONAL EXCLUSIONS. The inventions and Works of Authorship
                  set forth in Exhibit C (if no Exhibit C is attached, there is
                  nothing to disclose) to this Agreement which Executive owns or
                  controls shall also be excluded from operation of Section 6.1
                  of this Agreement, and Executive represents that such
                  inventions and Works of Authorship were conceived, made,
                  written, or created by the Executive prior to the employment
                  with the Company (although they may be useful to the Company),
                  its Subsidiaries or affiliates. Other than the Inventions and
                  Works of Authorship listed in Exhibit C, Executive does not
                  own or control rights in any inventions or Works of Authorship
                  and Executive shall not assert any such rights against the
                  Company.

                                    15 of 23
<PAGE>

      7.    EXCISE TAX PAYMENTS

            7.1   In the event that any payment or benefit (within the meaning
                  of Section 280G(b)(2) of the Code), paid or payable to the
                  Executive or for his benefit or distributed pursuant to the
                  terms of this Agreement or otherwise in connection with, or
                  arising out of, his employment with the Company (a "PAYMENT"
                  or "PAYMENT") would be subject to the excise tax imposed by
                  Section 4999 of the Code or any interest or penalties become
                  payable by the Executive with respect to such excise tax (such
                  excise tax, together with any such interest and penalties, are
                  hereinafter collectively referred to as the "EXCISE TAX"),
                  then the Executive will be entitled to receive an additional
                  payment (a "GROSS-UP PAYMENT") in an amount such that after
                  payment by the Executive of all taxes (including any interest
                  or penalties imposed by reason of the Executive's failure to
                  file timely a tax return or pay taxes shown as due on his
                  return, imposed with respect to such taxes and the Excise
                  Tax), including any Excise Tax imposed upon the Gross-Up
                  Payment, the Executive retains an amount of the Gross-Up
                  Payment equal to the Excise Tax imposed upon the Payments,
                  PROVIDED HOWEVER, that in no event shall the amount of the
                  Gross-Up Payment exceed an amount equal to 100% of the
                  Executive's Base Salary and Target Incentive Bonus in effect
                  at the Date of Termination.

            7.2   An initial determination as to whether a Gross-Up Payment is
                  required pursuant to this Agreement and the amount of such
                  Gross-Up Payment shall be made at the Company's expense by an
                  accounting firm selected by the Company and reasonably
                  acceptable to the Executive which is designated as one of the
                  largest accounting firms in the United States (the "ACCOUNTING
                  FIRM"). The Accounting Firm shall provide its determination
                  (the "DETERMINATION"), together with detailed supporting
                  calculations and documentation, to the Company and the
                  Executive within five days of the of the Date of Termination,
                  if applicable, or such other time as requested by the company
                  or by the Executive (provided the Executive reasonably
                  believes that any of the Payments may be subject to the Excise
                  Tax). If the Accounting Firm determines that no Excise Tax is
                  payable by the Executive with an opinion reasonably acceptable
                  to the Executive that no Excise Tax will be imposed with
                  respect to any such Payment or Payments. Within ten days of
                  the delivery of the Determination to the Executive, the
                  Executive shall have the right to dispute the Determination
                  (the "DISPUTE"). The Gross-Up Payment, if any, as determined
                  pursuant to this Section 7.2 shall be paid by the Company to
                  the Executive within five days of the receipt of the
                  Determination. The

                                    16 of 23
<PAGE>

                  existence of the Dispute shall not in any way affect the
                  Executive's right to receive the Gross-Up Payment in
                  accordance with the Determination. Upon the final resolution
                  of a Dispute, the Company shall promptly pay to the Executive
                  any additional amount required by such resolution, or if it is
                  determined that the Excise Tax is lower than originally
                  determined, the Executive shall repay to the Company the
                  excess amount of the Gross-Up Payment, if there is no Dispute,
                  the Determination shall be binding, final and conclusive upon
                  the Company and the Executive subject to the application of
                  Section 7.3 below.

            7.3   Notwithstanding anything contained in this Agreement to the
                  contrary, in the event that, according to the Determination,
                  an Excise Tax will be imposed on any Payment or Payments, the
                  Company shall pay to the applicable government taxing
                  authorities as Excise Tax withholding, the amount of the
                  Excise Tax that the Company has actually withheld from the
                  Payment or Payments.

      8.    ARBITRATION

            Each party retains the right to bring an action in a court of law
            for the interpretation and/or enforcement of the terms of this
            Agreement. The Executive and the Company shall also have the right
            and option to mutually agree (in lieu of litigation) to have a
            dispute or controversy arising under or in connection with this
            Agreement settled by arbitration, conducted before one arbitrator
            mutually agreed upon by the Executive and the Company, sitting in a
            location selected by the Company within 25 miles from the location
            of the Company's principal place of business. To the extent not
            otherwise inconsistent with the express provisions of this
            Agreement, the rules of the American Arbitration Association then in
            effect shall apply unless the Executive and the Company otherwise
            agree. In the event the Company and the Employee cannot agree upon
            an arbitrator within 60 days of the receipt of a written request for
            arbitration under this Agreement, the parties shall apply to the
            District Court for Hennepin County for the Court to appoint an
            arbitrator pursuant to Minnesota Statutes Section 572.10, as
            amended. Judgment may be entered on the award of the arbitrator in
            any court having jurisdiction. The arbitrator, in its discretion,
            may award attorneys fees and costs for the party in whose favor the
            arbitrator rules.

                                    17 of 23
<PAGE>

      9.    GENERAL PROVISIONS

            9.1   SUCCESSORS AND ASSIGNS:

                  9.1.1 This Agreement shall be binding upon and shall inure to
                        the benefit of the Company, its successors and assigns
                        and the Company shall require any successor or assign to
                        expressly assume and agree to perform this Agreement in
                        the same manner and to the same extent that the Company
                        would be required to perform it if no such succession or
                        assignment had taken place. The term "COMPANY" as used
                        herein shall include such successors (including a
                        Surviving Corporation) and assigns. The terms
                        "SUCCESSORS" or "SUCCESSORS AND ASSIGNS" as used herein
                        each shall mean a corporation or other entity acquiring
                        all or substantially all the assets and business of the
                        Company (including this Agreement) whether by operation
                        or law or otherwise.

                  9.1.2 Neither this Agreement nor any right or interest
                        hereunder shall be assignable or transferable by the
                        Executive, his beneficiaries or legal representatives,
                        except by will or the laws of descent and distribution.
                        This Agreement shall inure to the benefit of and be
                        enforceable by the Executive's legal personal
                        representative.

            9.2   NO OFFSETS. In no event shall any amount payable to Executive
                  pursuant to this Agreement be reduced for purposes of
                  offsetting, either directly or indirectly, any indebtedness or
                  liability of Executives to the Company.

            9.3   NOTICES. All notices, requests, and demands given to or made
                  pursuant hereto shall except as otherwise specified herein, be
                  in writing and be personally delivered or mailed postage
                  prepaid, registered or certified US mail to any party at its
                  address set forth on the last page of this Agreement. Either
                  party may, by notice hereunder, designate a changed address.
                  Any notice hereunder shall be deemed effectively given and
                  received: (1) if personally delivered, upon delivery; or (2)
                  if mailed, on the registered date or the date stamped on the
                  certified mail receipt.

            9.4   WITHHOLDING. To the extent required by an applicable law,
                  including, without limitation, any federal, state or local
                  income tax or excise tax law or laws, the Federal Insurance
                  Contributions Act, the Federal Unemployment Tax Act or any
                  comparable federal, state or local laws, the Company retains
                  the right to withhold such portion of

                                    18 of 23
<PAGE>

                  any amount or amounts payable to Executive under this
                  Agreement as the Company (on the written advice of outside
                  counsel) deems necessary.

            9.5   CAPTIONS. The various headings or captions in this Agreement
                  are for convenience only and shall not affect the meaning or
                  interpretation of this Agreement.

            9.6   GOVERNING LAW. The validity, interpretation, construction,
                  performance, enforcement and remedies of or relating to this
                  Agreement, and the rights and obligations of the parties
                  hereunder shall be governed by the substantive laws of the
                  State of Minnesota (without regard to the conflict of laws,
                  rules or statutes of any jurisdiction), and any and every
                  legal proceeding arising out of or in connection with this
                  Agreement shall be brought in the appropriate courts of the
                  State of Minnesota, each of the parties hereby consenting to
                  the exclusive jurisdiction of said courts for this purpose.

            9.7   CONSTRUCTION. Wherever possible, each provision of this
                  Agreement shall be interpreted in such manner as to be
                  effective and valid under applicable law, but if any provision
                  of this Agreement shall be prohibited by or invalid under
                  applicable law, such provision shall be ineffective only to
                  the extent of such prohibition or invalidity without
                  invalidating the remainder of such provision or the remaining
                  provisions of this Agreement.

            9.8   WAIVERS. No failure on the part of either party to exercise,
                  and no delay in exercising, any right or remedy hereunder
                  shall operate as a waiver thereof; nor shall any single or
                  partial exercise of any right or remedy hereunder preclude any
                  other or further exercise thereof or the exercise of any other
                  right or remedy granted hereby or by any related document or
                  by law.

            9.9   MODIFICATION. This Agreement may not be modified or amended
                  except by written instrument signed by the parties hereto.

            9.10  ENTIRE AGREEMENT. This Agreement constitutes the entire
                  agreement and understanding between the parties hereto in
                  reference to all the matters herein agreed upon. This
                  Agreement replaces in full all prior employment agreements or
                  understandings of the parties hereto, except stock option
                  agreements, and any and all such prior agreements or
                  understandings, except stock option agreements, are hereby
                  rescinded by mutual agreement.

                                    19 of 23
<PAGE>

            9.11  COUNTERPARTS. This Agreement may be executed in one or more
                  counterparts, each of which shall be deemed to be an original
                  but all of which together will constitute one and the same
                  instrument.

            9.12  SURVIVAL. The parties expressly acknowledge and agree that the
                  provisions of this Agreement which by their express or implied
                  terms extend beyond the termination of Executive's employment
                  hereunder, shall continue in full force and effect
                  notwithstanding Executive's termination of employment
                  hereunder or the termination of this Agreement, respectively.

            9.13  RIGHT TO COUNSEL. Executive acknowledges he is aware of his
                  right to obtain independent legal counsel of his own choosing
                  with respect to any matter or issue made or created by or
                  under this Agreement. Execution of this Agreement by the
                  Executive is an acknowledgement by the Executive that either
                  he has had the opportunity to review this Agreement to his own
                  satisfaction, has read and understood the terms and conditions
                  of this Agreement, has consulted with an attorney and has had
                  the terms and conditions of this Agreement satisfactorily
                  explained to the Executive, or has waived the right to seek
                  his own independent counsel, but nonetheless, acknowledges
                  that he understands the terms of this Agreement, and this
                  Agreement is executed and delivered freely and voluntarily by
                  the Executive without any force or coercion from the Company
                  or any other third party.

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

         COMPANY:          XATA Corporation, a Minnesota Corporation

         By          /s/   Stephen A. Lawrence
            --------------------------------------------------

         Name              Stephen A. Lawrence
              ------------------------------------------------

         Its               Chairman
             -------------------------------------------------

EXECUTIVE:     /s/         William P. Flies
           ---------------------------------------------------
                                WILLIAM P. FLIES

                                    20 of 23
<PAGE>

                                    EXHIBIT A

              BASE COMPENSATION, INCENTIVE PLAN, AND STOCK OPTIONS

             FOR PERIOD OF 1 OCTOBER 2000 THROUGH 30 SEPTEMBER 2001

BASE COMPENSATION: $180,000

INCENTIVE BONUS: To Be Paid Based on FY2001 Audited Financials Within 10 Days of
        the Availability of Such Financials;

        For Attainment of 100% of Target FY2001 EBIT*
                  25% of Base Compensation
        For Attainment of 125% of Target FY2001 EBIT*
                  50% of Base Compensation
        For Attainment of 150% of Target FY2001 EBIT*
                  100% of Base Compensation

        * EBIT - Earnings Before Interest and Taxes

STOCK OPTIONS: The executive will be granted additional stock options as set by
the XATA Board of Directors in the Executive Stock Option Plan that is in effect
at the beginning of each new fiscal year in which this Agreement is in effect
for this Executive.

         Date: ___________________

         Company: ______________________________________________

         Executive: ____________________________________________

                                    21 of 23
<PAGE>

EXHIBIT B

                   TERM LIFE INSURANCE BENEFICIARY DECLARATION

Executive:        William Paul Flies
                  28822 Lake Avenue Way
                  Frontenac, MN 55026

Beneficiary:      Linda Berg Flies
                  28822 Lake Avenue Way
                  Frontenac, MN 55026

                  Phone: (651) 345-2641

Death Benefit:    $ 720,000

Carrier:          _____________________________________

Address           _____________________________________

                  _____________________________________

                  _____________________________________

Contact:          _____________________________________

Phone:            _____________________________________

Executive: _______________________________________

                WILLIAM P. FLIES

Date:          ___________________

                                    22 of 23
<PAGE>

                                    EXHIBIT C

      PATENTS & TRADEMARKS GRANTED TO EXECUTIVE PRIOR TO DATE OF AGREEMENT

US Patent Office Patents & Trademarks Described in US Patent Documents:
         265049
         274126
         1255901
         1293547
         4297569
         4326125
         4379966
         4436993

EUROPEAN Community Patents & Trademarks Described in ECO Documents:
         277343

CANADIAN Patents & Trademarks Described in Canadian Documents:
         275691
         277343
         1141841
         1161559

STATE of Minnesota Trademarks Described in State of Minnesota Documents:
         7275
         7669
         7861

and Any Other Patents & Trademarks Granted to William Paul Flies, William P.
        Flies, or William Flies by United States, European, Japanese, and/or
        Minnesota Jurisdictions Prior to 1 January 1985

                                    23 of 23EXHIBIT 10.20

                         EXECUTIVE EMPLOYMENT AGREEMENT

                  THIS EXECUTIVE EMPLOYMENT AGREEMENT ("AGREEMENT") effective
         the 15th day of January, 2001, is by and between XATA Corporation, a
         Minnesota corporation ("Company"), and John G. Lewis ("Executive"), a
         Minnesota resident.

                                    RECITALS:

 WHEREAS, the Company desires to employ Executive

 WHEREAS, Executive desires to be employed by the Company; and

                  WHEREAS, Company and Executive desire to set forth in writing
            the terms and conditions of their agreements and understanding;

                  NOW THEREFORE, in consideration of the mutual covenants and
            undertakings contained in this Agreement, the Company and the
            Executive agree as follows:

            A.    Executive is employed by the Company in the capacity of Chief
                  Financial Officer (CFO) effective the date of this Agreement.

            B.    The Company is currently engaged in the development of onboard
                  information technology products. (the "Products") and in
                  marketing such Products to the transportation industry
                  (hereafter the "Company's Business").

            C.    Executive has certain unique skills, talents, contacts,
                  judgment, and knowledge, all to the benefit of the Company,
                  and has knowledge of the Company's Business, strategies, and
                  objectives.

      1.    DEFINITIONS. Capitalized terms used in this Agreement shall have
            their defined meaning throughout the Agreement. The following terms
            shall have the meanings set forth below, unless the context clearly
            requires otherwise.

            1.1   "AGREEMENT" means this Executive Employment Agreement, as from
                  time to time amended.

            1.2   "BASE SALARY" means the total annual cash compensation payable
                  on a regular periodic basis, without regard to voluntary or
                  mandatory deferrals, as set forth at Section 3.1 of this
                  Agreement.

<PAGE>

            1.3   "BENEFICIARY" means the person or persons designated in
                  Exhibit "B" of this Agreement and signed by Executive to
                  receive any benefits payable after Executive's death pursuant
                  to this Agreement. In the absence of such designation or in
                  the event that all of the persons so designated predecease
                  Executive, Beneficiary means the executor, administrator or
                  personal representative of Executive's estate.

            1.4   "BOARD" means the Board of Directors of the Company.

            1.5   "CAUSE" has the meaning set forth at Section 4.2 of this
                  Agreement.

            1.6   "COMPANY" means all of the following, jointly and severally:
                           (a) XATA Corporation and
                           (b) any Successor.

            1.7   CONFIDENTIAL INFORMATION" means information that is
                  proprietary to the Company or proprietary to others and
                  entrusted to the Company that has not been published and/or
                  disclosed to the public, whether or not trade secrets, and
                  including, but not limited to, the Company's business plans,
                  advertising and/or marketing plans, financial performance,
                  financial projections, customer lists, pricing information,
                  personnel matters, or any other matter considered or
                  reasonably expected to be considered by the Company regarding
                  the Company's business and its employees.

            1.8   "DATE OF TERMINATION" has the meaning set forth at Section
                  4.7.2 of this Agreement.

            1.9   "DISABILITY" shall mean a physical or mental infirmity that
                  impairs the Executive's ability to substantially perform his
                  duties if it continues for a period of at least 180
                  consecutive days. Notwithstanding anything contained in this
                  Agreement to the contrary, until the Date of Termination
                  specified in a Notice of Termination relating to the
                  Executive's Disability, the Executive shall be entitled to
                  return to his position with the Company, in which event no
                  Disability of the Executive will be deemed to have occurred.

            1.10  "GOOD REASON" has the meaning set forth at Section 4.4 of this
                  Agreement.

            1.11  "INCENTIVE BONUS" means the actual cash bonus payable to the
                  Executive as set forth in Section 3.1 of this Agreement.

                                    2 of 23
<PAGE>

            1.12  "NOTICE OF TERMINATION" has the meaning set forth at Section
                  4.7.1 of this Agreement.

            1.13  "PLAN" means any bonus or incentive compensation agreement,
                  plan, program, policy or arrangement sponsored, maintained or
                  contributed to by the Company, to which the Company is a party
                  or under which employees of the Company are covered,
                  including, without limitation, any stock option, restricted
                  stock or any other equity-based compensation plan, annual or
                  long-term incentive (bonus) plan, and any employee benefit
                  plan, such as a thrift, pension, profit sharing, deferred
                  compensation, medical, dental, disability, accident, life
                  insurance, automobile allowance, perquisite, fringe benefit,
                  vacation, sick or parental leave, severance or relocation plan
                  or policy or any other agreement, plan, program, policy, or
                  any other agreement, plan, program, policy or arrangement
                  intended to benefit employees or executive officers of the
                  Company.

            1.14  "SUBSIDIARY" means any corporation at least a majority of
                  whose securities having ordinary voting power for the election
                  of the directors (other than securities having such power only
                  by reason of the occurrence of a contingency) is at the time
                  owned by the Parent Corporation, the Company and/or one or
                  more Subsidiaries.

            1.15  "SUCCESSOR" has the meaning set forth at Section 9.1.1 of this
                  Agreement.

            1.16  "INVENTIONS" means ideas, improvements and discoveries,
                  whether or not such are patentable or copyrightable, and
                  whether or not in writing or reduced to practice.

            1.17  "WORKS OF AUTHORSHIP" means writings, drawings, software, and
                  any other works of authorship, whether or not such are
                  copyrightable.

      2.    EMPLOYMENT, DUTIES AND TERMS

            2.1   EMPLOYMENT. Upon the terms and conditions set forth in this
                  Agreement, the Company hereby employs Executive, and Executive
                  accepts such employment as Chief Financial Officer (CFO) of
                  the Company. Except as expressly provided herein, termination
                  of this Agreement by either party or by mutual agreement of
                  the parties shall also terminate the Executive's employment by
                  the Company.

                                    3 of 23
<PAGE>

            2.2   DUTIES. During the term of this Agreement, and excluding any
                  periods of vacation, sick, disability or other leave to which
                  Executive is entitled, Executive agrees to devote reasonable
                  attention and time during normal business hours to the
                  business and affairs of the Company and, to the extent
                  necessary to discharge the responsibilities assigned to
                  Executive hereunder and under the Company's bylaws, as amended
                  from time to time, to use Executive's reasonable best efforts
                  to perform faithfully and efficiently such responsibilities.

            2.3   CERTAIN PROPRIETARY INFORMATION. If Executive possesses any
                  proprietary information of another person or entity as a
                  result of prior employment or relationship, Executive shall
                  honor any legal obligation that Executive has with that person
                  or entity with respect to such proprietary information.

            2.4   TERM. This Agreement shall be effective as of the date set
                  forth above, and shall be in effect until September 30, 2001,
                  provided that, commencing on October 1, 2001, and on each
                  October 1, thereafter, the term of this Agreement shall be
                  renewed automatically for the subsequent one-year period
                  unless either the Executive or the Company gives written
                  notice to the other party of its intent not to so extend this
                  Agreement at least 60 days prior to the end of the term of
                  this Agreement or the applicable renewal period, as the case
                  may be. At the time of renewal of this Agreement, the
                  Executive's compensation plan, as shown on Exhibit "A", and
                  Beneficiary Designation, as shown on Exhibit "B", will be
                  reviewed and updated by the Company and the Executive, which
                  updates will be dually noted by Signatures and dates by the
                  Executive and the Board's designated compensation
                  representative.

            2.5   RETURN OF PROPRIETARY PROPERTY. Executive agrees that all
                  property in Executive's possession belonging to the Company,
                  including without limitation, all documents, reports, manuals,
                  memoranda, computer print-outs, customer lists, credit cards,
                  keys, identification, products, access cards, automobiles, and
                  all other property relating in any way to the business of the
                  Company are the exclusive property of the Company, even if
                  Executive authored, created or assisted in authoring or
                  creating such property. Executive shall return to the Company
                  all such documents and property immediately upon termination
                  or at such earlier time as the Company may reasonably request.

                                    4 of 23
<PAGE>

            2.6   POSITION AND DUTIES.

                  (a)   During the Employment Period, Executive shall serve as
                        the Chief Financial Officer of the Company, and shall
                        have the normal duties, responsibilities and authority
                        of an executive serving in such position, subject to
                        supervision and control by the Board of Directors of the
                        Company (the "Board"). During the Employment Period,
                        Executive may also serve as a director of the Company
                        providing the Shareholders elect the Executive to that
                        position. During the Employment Period, Executive may
                        also serve as a director of any affiliate of the Company
                        designated by the Board for so long as the Board or the
                        affiliate's shareholders, whichever applies, causes the
                        Executive to be elected to or appointed to such
                        position, as the case may be.

                  (b)   Executive shall report to Chief Executive Officer (CEO).

                  (c)   During the Employment Period, Executive shall devote his
                        best efforts and his full business time and attention
                        (except for permitted vacation periods, reasonable
                        periods of illness, or other incapacity and provided
                        such activities do not interfere with the performance by
                        Executive of his duties and responsibilities hereunder,
                        participation in charitable and civic endeavors and
                        management of Executive's personal investments and
                        business interests) to the business and affairs of the
                        Company, its subsidiaries and affiliates. Executive
                        shall perform his duties and responsibilities hereunder
                        to the best of his abilities in a diligent, trustworthy,
                        businesslike and efficient manner.

                  (d)   Executive shall perform his duties and responsibilities
                        hereunder principally in the Minneapolis, Minnesota
                        metropolitan area.

      3.    COMPENSATION, BENEFITS AND EXPENSES.

            3.1   BASE SALARY/INCENTIVE BONUS/STOCK OPTIONS. Subject to Section
                  4.8, during the term of Executive's employment under this
                  Agreement and for as long thereafter as required pursuant to
                  Section 4, the Company shall pay Executive a Base Salary at an
                  annual rate that is not less than One Hundred Sixty Thousand
                  dollars ($ 160,000) or such higher annual rate as may from
                  time to time be approved by the Board, such Base Salary to be
                  paid in substantially equal regular periodic payments in
                  accordance with the Company's regular payroll practices. If
                  Executive's Base Salary

                                    5 of 23
<PAGE>

                  is increased from time to time during the term of Executive's
                  employment under this Agreement, the increased amount shall
                  become the Base Salary for the remainder of the term and any
                  extensions of Executive's term of employment under this
                  Agreement and for as long thereafter as required pursuant to
                  Section 4, subject to any subsequent increases. In addition,
                  the Executive shall be entitled to an annual Incentive Bonus
                  as described on Exhibit "A", which may be modified from year
                  to year contingent upon and adjusted by the Company's
                  achievement of goals defined by the Compensation Committee of
                  the Board and approved by the Board. In addition, the
                  Executive may be entitled to an annual grant of stock options.

            3.2   BUSINESS EXPENSES. During the term of the Executive's
                  employment under this Agreement and as for as long thereafter
                  as required pursuant to Section 4, the Company shall, in
                  accordance with, and to the extent of its uniform policies in
                  effect from time to time, bear all ordinary and necessary
                  business expenses incurred by Executive in performing
                  Executive's duties as an executive officer of the Company,
                  including, without limitation, all travel and living expenses
                  while away from home on business in the service of the
                  Company, home telephone expenses incurred in service of the
                  Company, social and civic club membership and participation
                  expenses and entertainment expenses, provided that Executive
                  accounts promptly for such expenses to the Company in the
                  manner reasonably prescribed from time to time by the Company.

            3.3   FUTURE GRANT OF OPTIONS. The Company may grant to Executive
                  options to acquire shares of the Company's common stock as
                  described on Exhibit "A", which may be modified from year to
                  year as approved by the Board.

            3.4   DISCRETIONARY BONUSES. Executive shall be eligible to receive
                  bonuses from time to time as may be awarded to Executive by
                  the Board or a compensation committee appointed by the Board
                  which recommendations will be approved by the Board in the
                  Board's sole discretion. The discretionary bonuses, if any,
                  will be in addition to any bonuses described in Exhibit "A".

            3.5   TERM LIFE INSURANCE. During the term of this Agreement, the
                  Company shall pay the premiums to purchase and maintain term
                  life insurance on the life of the Executive in an amount equal
                  to four times the Executive's Base Salary as in effect from
                  time to time as recorded on Exhibit "A", the benefit to be
                  payable to such Beneficiary as Executive shall advise the
                  Company and the insurer from time to time.

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<PAGE>

            3.6   NONASSIGNABILITY OF BENEFITS. Executive shall not transfer,
                  assign, encumber, or otherwise dispose of his right to receive
                  payments hereunder and, in the event of any attempted transfer
                  or assignment, the Company shall have no further liability to
                  Executive under this Agreement.

      4.    EARLY TERMINATION

            4.1   EARLY TERMINATION. Subject to the respective continuing
                  obligations of the parties pursuant to Section 5, this Article
                  4 sets forth the terms for early termination of the
                  Executive's employment under this Agreement.

            4.2   TERMINATION BY THE COMPANY FOR CAUSE. The company may
                  terminate this Agreement for Cause. A termination of
                  employment shall be for "Cause" if the Executive
                  (i)   has been convicted of a felony
                  (ii)  has engaged in an act or acts of personal dishonesty
                        intended to result in substantial personal enrichment of
                        the Executive at the expense of the Company, or
                  (iii) has intentionally engaged in other conduct that is
                        demonstrably and materially injurious to the Company,
                        monetarily or otherwise;
                  (iv)  the commission by Executive of a fraud;
                  (v)   the commission by Executive of any act involving
                        dishonesty or disloyalty with respect to the Company or
                        any of its subsidiaries or affiliates;
                  (vi)  conduct by Executive tending to bring the Company or any
                        of its subsidiaries or affiliates into substantial
                        public disgrace or disrespect;
                  (vii) gross negligence or willful misconduct by Executive with
                        respect to the Company or any of its subsidiaries or
                        affiliates.

            4.3   TERMINATION BY COMPANY WITHOUT CAUSE. The Company may
                  terminate Executive's employment under this Agreement or any
                  renewal thereof at any time, provided that the Company shall
                  pay Executive all compensation due to Executive under this
                  Agreement for the remaining term of this Agreement or any
                  renewal thereof, as the case may be plus any compensation as
                  defined in Section 4.8.

            4.4   TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may
                  terminate Executive's employment under this Agreement for Good
                  Reason. Termination by Executive for "Good Reason" shall mean
                  termination of employment based on any one or more of the
                  following:

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<PAGE>

                  4.4.1 POSITION AND DUTIES. Assignment to Executive by the
                        Company of duties which are inconsistent with
                        Executive's position, duties, responsibilities, and
                        status with the Company, or a change in Executive's
                        titles or offices, or any removal of Executive from, or
                        any failure to reelect or reappoint Executive to any
                        such positions, except in connection with the
                        termination of his employment for Disability or Cause or
                        as a result of Executive's death or by Executive other
                        than for Good Reason;

                  4.4.2 COMPARABLE BENEFIT PLAN. Any failure to the Company to
                        continue in effect, or to provide a comparable
                        substitute for, any benefit plan or arrangement
                        (including, without limitation, any profit sharing plan,
                        executive supplemental medical plan, group life
                        insurance plan, and medical, dental, accident, and
                        disability plans but excluding incentive plans or
                        arrangements, which are the subject of Section 4.4.4) in
                        which Executive is participating as in effect on the
                        date hereof, (or any other plans providing executive
                        with substantially similar benefits) (hereinafter
                        referred to as "BENEFIT PLANS"), or by the taking of any
                        action by the Company that would adversely affect
                        Executive's participation in or materially reduce
                        Executive's benefits under any such Benefit Plan or
                        deprive Executive of any material fringe benefit enjoyed
                        by Executive as in effect on the date hereof.

                  4.4.3 COMPARABLE INCENTIVE PLAN. Any failure by the Company to
                        continue in effect, or to provide a comparable
                        substitute for any incentive plan or arrangement
                        (including, without limitation, any incentive
                        compensation plan, long-term incentive plan, bonus or
                        contingent bonus arrangements or credits, the right to
                        receive performance awards, or similar incentive
                        compensation benefits) in which Executive is
                        participating, or is eligible to participate,
                        (hereinafter referred to as "INCENTIVE PLANS") or the
                        taking of any action by the Company which would
                        adversely affect Executive's participation in any such
                        Incentive Plan.

            4.5   TERMINATION IN THE EVENT OF DEATH OF DISABILITY. The term of
                  Executive's employment under this Agreement shall terminate in
                  the event of Executive's death or Disability, subject to the
                  provisions of Section 4.8 hereof.

            4.6   TERMINATION BY MUTUAL AGREEMENT. The parties may terminate
                  Executive's employment under this Agreement at any time by
                  mutual written agreement.

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<PAGE>

            4.7   NOTICE OF TERMINATION; DATE OF TERMINATION; OFFER OF CONTINUED
                  EMPLOYMENT. The provisions in this Section 4.7 shall apply in
                  connection with any early termination of Executive's
                  employment under this Agreement pursuant to this Section 4.

                  4.7.1 For purposes of this Agreement, A "NOTICE OF
                        TERMINATION" shall mean a notice which shall indicate
                        the specific termination provisions in this Agreement
                        relied upon and shall set forth in reasonable detail the
                        facts and circumstances claimed to provide the basis for
                        such termination. Any purported termination by the
                        Company or by the Executive pursuant to this Section 4
                        (other than a termination by mutual agreement pursuant
                        to Section 4.6 or death) shall be communicated by
                        written Notice of Termination to the other party hereto.

                  4.7.2 For purposes of this Agreement, "DATE OF TERMINATION"
                        shall mean: (a) if Executive's employment is terminated
                        due to death, the last day of the month first following
                        the month during which Executive's death occurs; (b) if
                        Executive's employment is to be terminated for
                        Disability, thirty (30) calendar days after Notice of
                        Termination is given; (c) if Executive's employment is
                        terminated by the Company for Cause or by Executive for
                        Good Reason, the date specified in the Notice of
                        Termination; (d) if Executive's employment is terminated
                        by mutual agreement of the parties, the date specified
                        in such agreement; or (e) if Executive's employment is
                        terminated for any other reason, the date specified in
                        the Notice of Termination, which in no event shall be a
                        date earlier than thirty (30) calendar days after the
                        date on which a Notice of Termination is given, unless
                        an earlier date has been expressly agreed to by
                        Executive in writing either in advance of, or after,
                        receiving such Notice of Termination.

            4.8   COMPENSATION UPON TERMINATION, DEATH OR DURING DISABILITY.

                  4.8.1 If the Executive shall become disabled or incapacitated
                        to the extent that he is unable to perform his duties
                        hereunder, by reason of medically determinable physical
                        or mental impairment, as determined by a doctor mutually
                        acceptable to the Company and the Executive and retained
                        by the Company, Executive shall nevertheless continue to
                        receive the compensation and benefits provided under the
                        terms of this Agreement as follows: 100% of such
                        compensation and

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<PAGE>

                        benefits for a period of 12 months, but not beyond the
                        Date of Termination, and 65% thereafter until the Date
                        of Termination. Such benefits noted herein shall be
                        reduced by any benefits otherwise provided to the
                        Executive during such period under the provisions of
                        disability insurance coverage in effect for the
                        Company's employees. Thereafter, Executive shall be
                        eligible to receive benefits provided by the Company
                        under the provisions of disability insurance coverage in
                        effect for the Company's employees. Upon returning to
                        active full-time employment, the Executive's full
                        compensation as set forth in this Agreement shall be
                        reinstated as of the date of commencement of such
                        activities. In the event that the Executive returns to
                        active employment on other than a full-time basis, then
                        his compensation (as set forth in Section 3 of this
                        Agreement) shall be reduced in proportion to the time
                        spent in said employment, or as shall otherwise be
                        agreed to by the parties.

                  4.8.2 If the Executive's employment under this Agreement is
                        terminated on account of Disability or death, the
                        Company shall, within ten (10) fiscal days following the
                        Date of Termination, pay any amounts due to Executive
                        under this Agreement through the Date of Termination,
                        pay any amounts due to Executive under this Agreement
                        through the Date of Termination, including, without
                        limitation, amounts to which Executive is entitled under
                        any Plan in accordance with the terms of such Plan, and
                        further including, without limitation, a pro rata
                        portion (prorated through the Date of Termination) of
                        any Target Incentive Bonus or other annual or long-term
                        bonus or incentive payments (for performance periods in
                        effect at the Date of Termination) to which Executive
                        would have been entitled had Executive remained
                        continuously employed through the end of such
                        performance periods and continued to perform Executive's
                        duties in the same manner as performed immediately prior
                        to the Executive's death or Disability.

                  4.8.3 If Executive's employment under this Agreement is
                        terminated by the Company for Cause, or by Executive for
                        other than Good Reason, the Company shall pay Executive
                        only the Base Salary through the Date of Termination and
                        any amounts to which the Executive is entitled under any
                        Plan in accordance with the terms of such Plan

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<PAGE>

                  4.8.4 If Executive's employment under this Agreement is
                        terminated by the mutual agreement of the parties under
                        Section 4.6, the Company shall provide Executive with
                        the payments and benefits specified in this Agreement.

                  4.8.5 If the Company terminates Executive's employment
                        hereunder without Cause other than in the event of death
                        or Disability (it being understood that a purported
                        termination for Disability or for Cause which is
                        disputed and finally determined not to have been proper
                        termination for Cause or Disability shall be a
                        termination by the Company without Cause) or if
                        Executive terminates his employment hereunder for Good
                        Reason in accordance with Section 4.4, the Company
                        shall:

                        4.8.5.1     continue to pay Executive's Base Salary in
                                    accordance with Section 3.1 at the annual
                                    rate in effect hereunder immediately prior
                                    to the Date of Termination in the same
                                    manner as if Executive had remained
                                    continuously employed for one additional
                                    year of this Agreement (12 months);

                        4.8.5.2     cause Executive's continued participation in
                                    all Plans in accordance with Section 3.2 of
                                    this Agreement as if Executive remained
                                    continuously employed with the Company for
                                    the unexpired term of this Agreement for all
                                    purposes, including, without limitation,
                                    grants, awards, accruals and vesting
                                    thereunder; provided that, if such continued
                                    participation is not permissible under
                                    applicable law, the Company shall provide
                                    Executive with benefits substantially
                                    similar to those to which Executive would
                                    have been entitled under those Plans in
                                    which Executive's continued participation is
                                    not permissible, and

                        4.8.5.3     reimburse the Executive for outplacement
                                    expenses up to $10,000, which amount shall
                                    be payable for services provided within the
                                    first twelve months following the Date of
                                    Termination upon submission to the Company
                                    of appropriate documentation evidencing
                                    Executive's payment for such services.

                  4.8.6 The payments determined pursuant to Section 4.8.5 shall
                        be mitigated to the extent of Executive's "earned
                        income" within

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                        the meaning of Section 911(d)(2)(A) of the Internal
                        Revenue Code of 1986, as amended (the "Code") during the
                        remainder of the period with respect to which such
                        payments pursuant to Section 4.8.5 are required to be
                        paid.

      5.    RESTRICTIVE COVENANTS. Except as otherwise provided in this
            Agreement, the Executive will not, during the period of his
            employment with the Company, and for a period of one (1) year
            thereafter (except for Section 5.1, with the time therein set
            forth), directly or indirectly, for the Executive or on behalf of or
            in conjunction with any other person, company, partnership,
            corporation or business of whatever nature:

            5.1   CONFIDENTIAL INFORMATION. Reveal to any person or entity
                  outside of the Company, except as may be explicitly necessary
                  as part of the direct responsibilities of the Executive's
                  position with the Company, any Confidential Information.
                  Executive shall keep the Company's confidential documents
                  secure and avoid the inadvertent or intentional disclosure of
                  the Company's business matters inside and/or outside the
                  Company. Disclosure of Confidential Information within the
                  Company shall only be on a need-to-know basis, as is required
                  or necessary to carry out the Executive's duties as an
                  employee of the Company. Executive will use reasonable and
                  prudent care to safeguard and protect and prevent the
                  unauthorized use and disclosure of Confidential Information.
                  The obligations contained in this Section 5.1 will survive for
                  as long as the company, in its sole judgment, considers the
                  information to be Confidential Information. The obligations
                  under this Section 5.1 will not apply to any Confidential
                  Information that is now or becomes generally available to the
                  public through no fault of Executive or to Executive's
                  disclosure of any Confidential Information required by law or
                  judicial or administrative process.

            5.2   NON-COMPETITION. Directly or indirectly, own (except as a
                  shareholder of up to 5% of the outstanding stock in a publicly
                  traded corporation), manage, operate, participate in
                  ownership, participate in management, participate in operation
                  or control, or be employed by, or act as a consultant to, or
                  become an independent contractor with, or become an adviser
                  to, or be connected in any manner with, any individual or
                  other entity which engages in or has an interest in a business
                  that meaningfully competes with the Company's Business.
                  Notwithstanding the foregoing, it is agreed that Executive
                  shall not be in violation of his Section 5.2 if he is
                  associated with (a) a company which develops or markets
                  onboard information technology products which compete,
                  directly or indirectly, with the Company's Business if such
                  products accounted

                                    12 of 23
<PAGE>

                  for less than 10% of the gross sales of such company in its
                  last fiscal year and are reasonably expected to account for
                  less than10% of its gross sales in the current fiscal year, or
                  (b) a division or department of any company (even if such
                  company competes with the Company) that is not involved,
                  directly or indirectly, in developing, manufacturing or
                  selling products that compete with the Company's Business.

            5.3   NON-ENTICEMENT. Directly or indirectly interfere with the
                  contractual or other relationships between the Company and any
                  other employees, independent contractors, consultants,
                  prospective employees, prospective consultants, prospective
                  independent contractors to the Company, to be either employed
                  by or retained by the Company; or induce the Company's other
                  employees to leave the employ of the Company.

            5.4   NON-CUSTOMER INTERFERENCE. Call upon any person or entity
                  which is/was a customer or prospective customer or vendor of
                  the Company (including the Subsidiaries thereof) in direct
                  competition with the current Business of the Company or known
                  planned products or services of the Company, or its
                  Subsidiaries. As used herein, the term "customer" means any
                  entity to whom the Company, or its Subsidiaries, has provided
                  services within the twelve (12) month period prior to the date
                  of Executive's termination; the term "prospective customer"
                  means any entity that has been subject to documented sales and
                  marketing activity, other than mass mailings. by the Company,
                  or its Subsidiaries, within the twelve (12) month period prior
                  to the date of the Executive's termination; and "vendor" means
                  any entity serving as a source for any products sold by the
                  Company or entity producing products or services for the
                  Company to enable it to provide products and services to the
                  Company's customers.

            5.5   NON-MERGER INTERFERENCE. Call upon, for the purpose of
                  acquiring or performing services for such entity, any
                  prospective acquisition or merger candidate which was either
                  called upon by the Company, or its Subsidiaries, or for which
                  the Company, or its Subsidiaries, made an acquisition or
                  merger analysis during the six (6) month period prior to the
                  date of Executive termination.

            5.6   INTERPRETATION. It is agreed by the parties that the foregoing
                  covenants in Section 5.1 through 5.5, inclusive, impose a
                  reasonable restraint on Executive in light of the Company's
                  Business and related activities on the date of the execution
                  of this Agreement.

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<PAGE>

            5.7   REMEDIES. Executive agrees that any breach or threatened
                  breach of the covenants set forth in this Section 5 will cause
                  the Company irreparable harm for which there is no adequate
                  remedy at law, and, without limiting other rights and remedies
                  the Company may have at law or under and pursuant to this
                  Agreement, Executive consents to remedies pursuant to this
                  Section 5.7, including, but not limited to, the issuance of an
                  injunction in favor of the Company enjoining the breach of any
                  of the aforesaid covenants by any court of appropriate
                  jurisdiction. Such injunction shall provide the Company with
                  at least a one (1) year contractual protection agreed to by
                  the parties, and in the event the Executive violates the terms
                  of the injunction, Executive agrees that a court of
                  appropriate jurisdiction shall have the power to extend the
                  length or breadth of the injunction to provide the Company
                  with the full measure of protection intended by this
                  Agreement, including, but not limited to, the extension of
                  such injunction for a reasonable period of time in order to
                  eliminate any commercial advantage which may be derived from a
                  misappropriation of Confidential Information or a breach or
                  default of the covenants set forth in Sections 5.2 through
                  5.5, inclusive. If any or all of the aforesaid covenants are
                  held not to be enforceable because of the scope or duration of
                  such covenant, or if applicable, the area covered by such
                  covenants, the parties agree that a court of appropriate
                  jurisdiction shall make such determination, and the court
                  shall have the power to reduce the scope, duration, and area
                  of any covenant (or one or more of the foregoing) to the
                  extent which allows maximum scope, duration and area as
                  permitted by applicable law. The covenants in this Section 5
                  protect not only the Company but also any operations
                  controlled by the Company or controlling the Company, whether
                  a Parent Corporation, Subsidiary, brother/sister corporation
                  or affiliate. The Executive shall pay reasonable attorneys'
                  fees, costs and expenses that may be incurred by the Company
                  in enforcing one or more of the covenants set forth in this
                  Section 5. Section 5 shall have independent legal significance
                  and shall survive termination of this Agreement.

      6.    INVENTIONS

            6.1   DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND OTHER WORKS.
                  Executive shall promptly disclose to the Company in writing
                  all inventions and Works of Authorship which are conceived,
                  made, discovered, written or created by Executive alone or
                  jointly with another person, group or entity, whether during
                  the normal hours of his employment at the company or on
                  Executive's own time, during the term of this Agreement and
                  for one year after termination of this Agreement except as
                  exempted as described in 6.2 below.

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<PAGE>

                  Executive shall assign all rights to all such inventions and
                  Works of Authorship to the Company. Executive shall give the
                  Company considers necessary or desirable in order to transfer
                  or record the transfer of Executive's entire right, title and
                  interest in such inventions and Works of Authorship; and in
                  order to enable the Company to obtain exclusive patent,
                  copyright, or other legal protection for Inventions and Works
                  of Authorship. The Company shall bear any reasonable expenses
                  in this regard.

            6.2   NOTICE: MINNESOTA LAW EXEMPTS FROM THIS AGREEMENT "AN
                  INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE
                  SECRET INFORMATION OF THE COMPANY WAS USED AND WHICH WAS
                  DEVELOPED ENTIRELY ON THE EXECUTIVE'S OWN TIME, AND (1) WHICH
                  DOES NOT RELATE (A) TO THE BUSINESS OF THE COMPANY, OR (B) TO
                  THE COMPANY'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR
                  DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK
                  PERFORMED BY EXECUTIVE FOR THE COMPANY."

            6.3   ADDITIONAL EXCLUSIONS. The inventions and Works of Authorship
                  set forth in Exhibit C (if no Exhibit C is attached, there is
                  nothing to disclose) to this Agreement which Executive owns or
                  controls shall also be excluded from operation of Section 6.1
                  of this Agreement, and Executive represents that such
                  inventions and Works of Authorship were conceived, made,
                  written, or created by the Executive prior to the employment
                  with the Company (although they may be useful to the Company),
                  its Subsidiaries or affiliates. Other than the Inventions and
                  Works of Authorship listed in Exhibit C, Executive does not
                  own or control rights in any inventions or Works of Authorship
                  and Executive shall not assert any such rights against the
                  Company.

      7.    EXCISE TAX PAYMENTS

            7.1   In the event that any payment or benefit (within the meaning
                  of Section 280G(b)(2) of the Code), paid or payable to the
                  Executive or for his benefit or distributed pursuant to the
                  terms of this Agreement or otherwise in connection with, or
                  arising out of, his employment with the Company (a "PAYMENT"
                  or "PAYMENT") would be subject to the excise tax imposed by
                  Section 4999 of the Code or any interest or penalties become
                  payable by the Executive with respect to such excise tax (such
                  excise tax, together with any such interest and penalties, are
                  hereinafter collectively referred to as the "EXCISE TAX"),
                  then the Executive will be entitled to receive an additional
                  payment (a "GROSS-UP PAYMENT") in an amount such that after
                  payment by the Executive of all taxes (including any interest
                  or penalties imposed by reason of the Executive's failure to

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                  file timely a tax return or pay taxes shown as due on his
                  return, imposed with respect to such taxes and the Excise
                  Tax), including any Excise Tax imposed upon the Gross-Up
                  Payment, the Executive retains an amount of the Gross-Up
                  Payment equal to the Excise Tax imposed upon the Payments,
                  PROVIDED HOWEVER, that in no event shall the amount of the
                  Gross-Up Payment exceed an amount equal to 100% of the
                  Executive's Base Salary and Target Incentive Bonus in effect
                  at the Date of Termination.

            7.2   An initial determination as to whether a Gross-Up Payment is
                  required pursuant to this Agreement and the amount of such
                  Gross-Up Payment shall be made at the Company's expense by an
                  accounting firm selected by the Company and reasonably
                  acceptable to the Executive which is designated as one of the
                  largest accounting firms in the United States (the "ACCOUNTING
                  FIRM"). The Accounting Firm shall provide its determination
                  (the "DETERMINATION"), together with detailed supporting
                  calculations and documentation, to the Company and the
                  Executive within five days of the of the Date of Termination,
                  if applicable, or such other time as requested by the company
                  or by the Executive (provided the Executive reasonably
                  believes that any of the Payments may be subject to the Excise
                  Tax). If the Accounting Firm determines that no Excise Tax is
                  payable by the Executive with an opinion reasonably acceptable
                  to the Executive that no Excise Tax will be imposed with
                  respect to any such Payment or Payments. Within ten days of
                  the delivery of the Determination to the Executive, the
                  Executive shall have the right to dispute the Determination
                  (the "DISPUTE"). The Gross-Up Payment, if any, as determined
                  pursuant to this Section 7.2 shall be paid by the Company to
                  the Executive within five days of the receipt of the
                  Determination. The existence of the Dispute shall not in any
                  way affect the Executive's right to receive the Gross-Up
                  Payment in accordance with the Determination. Upon the final
                  resolution of a Dispute, the Company shall promptly pay to the
                  Executive any additional amount required by such resolution,
                  or if it is determined that the Excise Tax is lower than
                  originally determined, the Executive shall repay to the
                  Company the excess amount of the Gross-Up Payment, if there is
                  no Dispute, the Determination shall be binding, final and
                  conclusive upon the Company and the Executive subject to the
                  application of Section 7.3 below.

            7.3   Notwithstanding anything contained in this Agreement to the
                  contrary, in the event that, according to the Determination,
                  an Excise Tax will be imposed on any Payment or Payments, the
                  Company shall pay to the applicable government taxing
                  authorities

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                  as Excise Tax withholding, the amount of the Excise Tax that
                  the Company has actually withheld from the Payment or
                  Payments.

      8.    ARBITRATION

            Each party retains the right to bring an action in a court of law
            for the interpretation and/or enforcement of the terms of this
            Agreement. The Executive and the Company shall also have the right
            and option to mutually agree (in lieu of litigation) to have a
            dispute or controversy arising under or in connection with this
            Agreement settled by arbitration, conducted before one arbitrator
            mutually agreed upon by the Executive and the Company, sitting in a
            location selected by the Company within 25 miles from the location
            of the Company's principal place of business. To the extent not
            otherwise inconsistent with the express provisions of this
            Agreement, the rules of the American Arbitration Association then in
            effect shall apply unless the Executive and the Company otherwise
            agree. In the event the Company and the Employee cannot agree upon
            an arbitrator within 60 days of the receipt of a written request for
            arbitration under this Agreement, the parties shall apply to the
            District Court for Hennepin County for the Court to appoint an
            arbitrator pursuant to Minnesota Statutes Section 572.10, as
            amended. Judgment may be entered on the award of the arbitrator in
            any court having jurisdiction. The arbitrator, in its discretion,
            may award attorneys fees and costs for the party in whose favor the
            arbitrator rules.

      9.    GENERAL PROVISIONS

            9.1   SUCCESSORS AND ASSIGNS:

                  9.1.1 This Agreement shall be binding upon and shall inure to
                        the benefit of the Company, its successors and assigns
                        and the Company shall require any successor or assign to
                        expressly assume and agree to perform this Agreement in
                        the same manner and to the same extent that the Company
                        would be required to perform it if no such succession or
                        assignment had taken place. The term "COMPANY" as used
                        herein shall include such successors (including a
                        Surviving Corporation) and assigns. The terms
                        "SUCCESSORS" or "SUCCESSORS AND ASSIGNS" as used herein
                        each shall mean a corporation or other entity acquiring
                        all or substantially all the assets and business of the
                        Company (including this Agreement) whether by operation
                        or law or otherwise.

                  9.1.2 Neither this Agreement nor any right or interest
                        hereunder shall be assignable or transferable by the
                        Executive, his beneficiaries or legal representatives,
                        except by will or the

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                        laws of descent and distribution. This Agreement shall
                        inure to the benefit of and be enforceable by the
                        Executive's legal personal representative.

            9.2   NO OFFSETS. In no event shall any amount payable to Executive
                  pursuant to this Agreement be reduced for purposes of
                  offsetting, either directly or indirectly, any indebtedness or
                  liability of Executives to the Company.

            9.3   NOTICES. All notices, requests, and demands given to or made
                  pursuant hereto shall except as otherwise specified herein, be
                  in writing and be personally delivered or mailed postage
                  prepaid, registered or certified US mail to any party at its
                  address set forth on the last page of this Agreement. Either
                  party may, by notice hereunder, designate a changed address.
                  Any notice hereunder shall be deemed effectively given and
                  received: (1) if personally delivered, upon delivery; or (2)
                  if mailed, on the registered date or the date stamped on the
                  certified mail receipt.

            9.4   WITHHOLDING. To the extent required by an applicable law,
                  including, without limitation, any federal, state or local
                  income tax or excise tax law or laws, the Federal Insurance
                  Contributions Act, the Federal Unemployment Tax Act or any
                  comparable federal, state or local laws, the Company retains
                  the right to withhold such portion of any amount or amounts
                  payable to Executive under this Agreement as the Company (on
                  the written advice of outside counsel) deems necessary.

            9.5   CAPTIONS. The various headings or captions in this Agreement
                  are for convenience only and shall not affect the meaning or
                  interpretation of this Agreement.

            9.6   GOVERNING LAW. The validity, interpretation, construction,
                  performance, enforcement and remedies of or relating to this
                  Agreement, and the rights and obligations of the parties
                  hereunder shall be governed by the substantive laws of the
                  State of Minnesota (without regard to the conflict of laws,
                  rules or statutes of any jurisdiction), and any and every
                  legal proceeding arising out of or in connection with this
                  Agreement shall be brought in the appropriate courts of the
                  State of Minnesota, each of the parties hereby consenting to
                  the exclusive jurisdiction of said courts for this purpose.

            9.7   CONSTRUCTION. Wherever possible, each provision of this
                  Agreement shall be interpreted in such manner as to be
                  effective and valid under applicable law, but if any provision
                  of this

                                    18 of 23
<PAGE>

                  Agreement shall be prohibited by or invalid under applicable
                  law, such provision shall be ineffective only to the extent of
                  such prohibition or invalidity without invalidating the
                  remainder of such provision or the remaining provisions of
                  this Agreement.

            9.8   WAIVERS. No failure on the part of either party to exercise,
                  and no delay in exercising, any right or remedy hereunder
                  shall operate as a waiver thereof; nor shall any single or
                  partial exercise of any right or remedy hereunder preclude any
                  other or further exercise thereof or the exercise of any other
                  right or remedy granted hereby or by any related document or
                  by law.

            9.9   MODIFICATION. This Agreement may not be modified or amended
                  except by written instrument signed by the parties hereto.

            9.10  ENTIRE AGREEMENT. This Agreement constitutes the entire
                  agreement and understanding between the parties hereto in
                  reference to all the matters herein agreed upon. This
                  Agreement replaces in full all prior employment agreements or
                  understandings of the parties hereto, except stock option
                  agreements, and any and all such prior agreements or
                  understandings, except stock option agreements, are hereby
                  rescinded by mutual agreement.

            9.11  COUNTERPARTS. This Agreement may be executed in one or more
                  counterparts, each of which shall be deemed to be an original
                  but all of which together will constitute one and the same
                  instrument.

            9.12  SURVIVAL. The parties expressly acknowledge and agree that the
                  provisions of this Agreement which by their express or implied
                  terms extend beyond the termination of Executive's employment
                  hereunder, shall continue in full force and effect
                  notwithstanding Executive's termination of employment
                  hereunder or the termination of this Agreement, respectively.

            9.13  RIGHT TO COUNSEL. Executive acknowledges he is aware of his
                  right to obtain independent legal counsel of his own choosing
                  with respect to any matter or issue made or created by or
                  under this Agreement. Execution of this Agreement by the
                  Executive is an acknowledgement by the Executive that either
                  he has had the opportunity to review this Agreement to his own
                  satisfaction, has read and understood the terms and conditions
                  of this Agreement, has consulted with an attorney and has had
                  the terms and conditions of this Agreement satisfactorily
                  explained to the Executive, or has waived the right to seek
                  his own independent counsel, but nonetheless, acknowledges
                  that he understands the terms of this Agreement, and this
                  Agreement is executed and

                                    19 of 23
<PAGE>

                  delivered freely and voluntarily by the Executive without any
                  force or coercion from the Company or any other third party.

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

         COMPANY:

         XATA Corporation, a Minnesota Corporation

         By          /s/   William P. Flies
            --------------------------------------------------

         Name              William P. Flies
              ------------------------------------------------

         Its               President and CEO
             -------------------------------------------------

                  EXECUTIVE:

                  John G. Lewis

                     /s/   John G. Lewis
                  --------------------------------------------

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<PAGE>

                                    EXHIBIT A

              BASE COMPENSATION, INCENTIVE PLAN, AND STOCK OPTIONS

             FOR PERIOD OF 15 JANUARY 2001 THROUGH 30 SEPTEMBER 2001

BASE COMPENSATION: $160,000

INCENTIVE BONUS: To Be Paid Based on FY2001 Audited Financials Within 10 Days of
                 the Availability of Such Financials;

         For Attainment of 100% of Target FY2001 EBIT*
                  20% of Base Compensation
         For Attainment of 125% of Target FY2001 EBIT*
                  40% of Base Compensation
         For Attainment of 150% of Target FY2001 EBIT*
                  80% of Base Compensation

         * EBIT - Earnings Before Interest and Taxes

STOCK OPTIONS: The executive will be granted additional stock options as set by
the XATA Board of Directors in the Executive Stock Option Plan that is in effect
at the beginning of each new fiscal year in which this Agreement is in effect
for this Executive.

         Date: ___________________

         Company: ______________________________________________

         Executive: ____________________________________________

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<PAGE>

EXHIBIT B TERM LIFE INSURANCE BENEFICIARY DECLARATION

Executive: John G. Lewis

Address:        _____________________________________________

                _____________________________________________

                _____________________________________________

Beneficiary:    _____________________________________________

Address:        _____________________________________________

                _____________________________________________

                _____________________________________________

Phone:          _____________________________________________

Death Benefit:  $640,000

Carrier:        _____________________________________________

Address         _____________________________________________

                _____________________________________________

                _____________________________________________

Contact:        _____________________________________________

Phone:          _____________________________________________

Date:           ___________________

Signed:         ______________________________________________

                John G. Lewis

                                    22 of 23
<PAGE>

                                    EXHIBIT C

      PATENTS & TRADEMARKS GRANTED TO EXECUTIVE PRIOR TO DATE OF AGREEMENT

                                    23 of 23

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