EXHIBIT 10(n)
EMPLOYMENT AGREEMENT
WITH CONSULTING SERVICES UPON TERMINATION
This Agreement made this 1st day of April, 1994 by and
between RICHARDSON ELECTRONICS, LTD. whose principal office is
40W267 Keslinger Road, LaFox, Illinois 60147 (hereinafter
together with its subsidiaries called the "Company") and LEONARD
R. PRANGE of 1010 Willow Creek Rd., West Chicago IL 60185
(hereinafter called the "Employee").
WITNESSETH:
WHEREAS,the Employee has been an employee and executive
officer of the Company for many years and the parties wish to
provide for his continuing employment and future services upon
terms and conditions set forth in this agreement;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Employment and Term. The Company continues to employ
the Employee, and the Employee agrees to and hereby does continue
in the employ of the Company to render full time service to the
Company until notice of termination of employment is given by one
party to the other and thereafter to provided consulting services
to the Company for a two year period as provided in paragraph 5
below, all upon the terms and conditions and for the
consideration hereinafter set forth.
2. Duties. Until further action by the Board of Directors
of the Company, Employee shall be the Chief Financial Officer of
the Company having the duties and responsibilities assigned to
that position by the Company and shall have such other offices
and duties and responsibilities as are assigned to him from time
to time. Should the Board of Directors of the Company remove the
Employee as Chief Financial Officer he shall be a Group Vice
President reporting to the Chief Executive Officer of the Company
and in such position shall have such duties and responsibilities
and other offices as are assigned to him from time to time by the
Chief Executive Officer of the Company. The Employee shall carry
out his duties and responsibilities to the best of his abilities
and with the same level of professional attention previously
devoted to his employment with the Company.
3. Compensation. For all services to be rendered by him in
any capacity hereunder (including as an officer, director,
committee member or otherwise of the Company or any subsidiary or
division) on behalf of the Company, the Company agrees to pay
Employee so long as he is employed hereunder:
(a) Salary. A fixed salary ("Salary") at the rate of One Hundred
Forty Thousand Seven Hundred Ninety Five Dollars
($140,795.00) per annum payable in installments in
accordance with the Company's regular pay periods for
employees generally;
(b) Bonus. In addition to the Salary set forth in (a) above, a
bonus ("Bonus") which would provide the Employee with an
annual Bonus of up to 50% of the annual Salary set forth in
(a) above if Employee meets all individual objectives as
established by the Chief Executive Officer of the Company
from time to time; provided, however, that a minimum of 50%
of the Bonus (25% of Salary) will be payable during
employment under this agreement and the Bonus will be
payable in accordance with the Company's regular pay
periods; and
(c) Contingent Compensation. Upon termination of his employment,
except as otherwise provided and subject to the conditions
set forth in paragraph 5 below, contingent compensation
("Contingent Compensation"), if and to the extent payable,
for a period of twenty four (24) months thereafter
commencing on the first day of the month following the date
on which his employment terminates, at the rate of Fourteen
Thousand Six Hundred Sixty Seven Dollars ($14,667.00) per
month so long as he has not accepted other full time
employment and if he has accepted, or thereafter during the
period of payment of Contingent Compensation accepts, other
full time employment, then the amount of Contingent
Compensation shall be reduced to the rate of Seven Thousand
Three Hundred Thirty Three Dollars ($7,333.00) per month
beginning on the first day of the month following the date
he has accepted other full time employment.
No additional compensation shall be payable to Employee by reason
of the number of hours worked or by reason of hours worked on
Saturdays, Sundays, holidays or otherwise.
4. Benefits. During the term of full time employment
hereunder, in addition to the Salary and Bonus provided above,
Employee shall be entitled to participate in benefits generally
offered to all Company officer employees for which he is
eligible, including vacations commensurate with length of service
and holidays, stock options, profit sharing and pension plan,
health care and life insurance, as detailed in the Richardson
Employee Benefit Plans. In the event that the Employee shall,
during the term of his full time employment hereunder, die or
become disabled he shall be entitled to the benefits provided to
officer employees generally under the Company's Employee Group
Insurance and Benefit Plans for employees and the Company shall
have no further duty or obligation to pay the Salary and Bonus or
Contingent Compensation provided above in paragraph 3. beyond
such date of death or disability. During the period of payment
of contingency compensation provided for in paragraph 3.(c) above
Employee shall be entitled to participate in health care plans
which the Company then offers generally to its officer employees
on the same terms as such officer employees, but shall not be
entitled to participate in any other benefits.
5. Contingent Compensation and Consulting Services. The
Contingent Compensation provided for in paragraph 3.(c) above
shall be payable if and when but not unless:
(a) Termination. The employment of Employee shall have been
terminated by other than the Employee's death or disability
entitling him or his heirs, estate or beneficiaries to
benefits provided to officer employees generally under the
Company's Employee Group Insurance and Benefit Plans for
employees: and
(b) Conditions. The Employee shall, if and as long as such
Contingent Compensation shall be paid (but in any event for
a period of at least 24 months following termination of his
employment) and without additional compensation, fee, or
other payment by the Company (other that the payment by the
Company for health care coverage as provided for in
paragraph 4. above and other than the payment or
reimbursement of reasonable actual out-of-pocket travel and
other approved expenses)
(i) Consulting. Render such consulting and advisory
services as the Company may from time to time reasonably
request, having in mind the Employee's health, residence,
and personal circumstances, in connection with any matter on
which the Employee was working at time of the termination of
his employment or with respect to which the Employee might
be expected to have special competence by reason of his
former employment by the Company or otherwise;
(ii) Non-Compete. Refrain (independently of and without
reference to paragraph 8 hereof), after the expiration of a
period of thirty (30) days from the mailing to him of
written notice by the Secretary of the Company of a
direction to do so, from engaging in the operation or
management of a business, whether as owner, shareholder,
partner, officer, employee or otherwise, which then shall be
in competition with any business which the Company or any of
its subsidiaries was engaged at the time of the termination
of the Employee's employment, provided that ownership as an
investor of not more than one per cent (1%) of the
outstanding shares of stock of any company listed on a
national securities exchange shall not in itself constitute
a violation of these provisions;
(iii) Confidential Information. Refrain (independently of
and without reference to paragraph 7 hereof) from disclosing
to unauthorized persons information relative to the business
of the Company or any of its subsidiaries which he shall
have reason to believe is confidential; and
(iv) Company's Interest. Refrain (independently of and
without reference to paragraph 6 hereof) from otherwise
acting or conducting himself in a manner which he shall have
reason to believe is inimical or contrary to the best
interests of the Company.
In the event that the Employee shall fail to comply with any
provision of paragraph 5.(b) hereof, the Company's obligation to
make any further payment of the Contingent Compensation provided
for in paragraph 3.(c) above shall forthwith terminate.
The Employee by written notice to the Company during his
lifetime signed by him and witnessed by at least two persons, may
designate one or more persons or entities (including a trust or
trusts or his estate) to receive any balance of his Contingent
Compensation in the event of his death prior to full payment
thereof but subsequent to the time before which his death would
terminate his right to receive Contingent Compensation as
provided in paragraph 4. above, and if he shall designate more
than one, the proportion in which each is to receive such
payments. He may also designate the person or persons who shall
succeed to the rights of the person or persons originally
designated in case the latter should die. He may from time to
time change any designation so made and the last written notice
given by him before his death shall be controlling. In the
absence of a designation made by the Employee pursuant to this
paragraph 5. or, in the event of the death of a person to whom
payments were being made pursuant to this paragraph 5. before
such payments are completed and, failing any other designation by
the Employee, such balance of payments shall be paid to the legal
representatives of Employee.
6. Company's Good Name. Employee agrees that he will at no
time engage in conduct which demeans, defames, libels, slanders,
destroys or diminishes in any way the property, assets or rights,
or the reputation or goodwill of the Company, its subsidiaries,
or their respective shareholders, directors, officers, employees,
or agents or the products sold by the Company.
7. Confidentiality. The Employee shall not (except in the
proper course of his duties hereunder) either during the period
of his employment with the Company or thereafter make use of,
disseminate or divulge to any person, firm, company, association
or other entity, and shall use his best endeavors to prevent the
use, dissemination, publication or disclosure of, any
information, knowledge or data disclosed to Employee or known by
Employee as a consequence of or through his employment or
relationship with the Company or any of its predecessors or
subsidiaries (including information, knowledge or data conceived,
originated, discovered or developed by Employee) not generally
known in the business of manufacturing or distributing electron
tubes, semiconductors, or data display products, about the
Company's or its predecessors' or subsidiaries' businesses,
products, processes and services, including without limitation
information relating to financial matters, purchasing, sales,
research, development, methods, policies, procedures, systems,
practices, merchandising, suppliers or customers. It is not
intended to limit or restrict Employee's right to utilize
financial related ideas, concepts or structures of a general
nature so long as they are not used in a business competitive
with that of the Company.
8. Non Competition.
(a) Engage in a Competing Business. Independent of any
obligation under any other paragraph or subparagraph hereof
or any other agreement, Employee agrees that during the term
of his employment, and during a further period of two years
after leaving the employ of the Company, whether upon
expiration of this agreement or otherwise, he will not,
except with the approval of the Chairman of the Board or
President of the Company, directly or indirectly (whether or
not for compensation or profit) through any other individual
or entity whether as an officer, director, shareholder,
creditor, partner, promoter, proprietor, associate,
employee, owner, agent, representative or otherwise, become
or be interested in, or associated with, any individual or
entity, other than the Company, engaged in any business or
enterprise the nature of which is competitive with that of
the Company in the territories served by the Company'
provided, however, that, anything above to the contrary
notwithstanding, Employee may, after the date of this
Agreement, own as an inactive investor, securities of any
corporation engaged in any prohibited business as described
above which is publicly traded on a national securities
exchange, so long as the holdings of the Employee, directly
or indirectly, in the aggregate, constitute less than 1% of
the outstanding voting securities of such corporation.
(b) Solicit. Independent of any obligation under any other
paragraph or subparagraph hereof or any other agreement,
Employee agrees that during the term of his employment, and
during a further period of two years after leaving the
employ of the Company, whether upon expiration of this
Agreement or otherwise, he will not, except with the
approval of the Chairman of the Board or President of the
Company, directly or indirectly (whether or not for
compensation or profit) through any other individual or
entity call upon, solicit, entice, persuade or induce any
individual or entity which during Employee's term of
employment with the Company was a customer or supplier, or
proposed customer or supplier, of the Company upon whom
Employee called or dealt with or whose account he supervised
on behalf of the Company, to purchase (with respect to
customers) or sell (with respect to suppliers) products of
the types or kind sold by the Company or which could be
substituted for or which serve the same purpose or function
as products sold by the Company or services of the type or
kind provided to or obtained from such customer or supplier
during Employee's employment or request or advise any such
customer or supplier to withdraw, curtail or cancel its
business with the Company, and Employee shall not approach,
respond to, or otherwise deal with any such customer or
supplier for any such purpose or authorize or knowingly
cooperate with the taking of any such actions by any other
individual or entity.
(c) Remedies. In the event of a breach or threatened breach by
the Employee of the provisions of this paragraph 8 or of
paragraphs 6 or 7 the Company shall be entitled to an
injunction restraining the Employee from such breach.
Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available to the Company
for such breach or threatened breach. The parties hereto
desire that this paragraph 8 and paragraphs 6 and 7 shall be
fully enforceable in accordance with the terms hereof and
thereof but if any portion is held unenforceable or void or
against public policy by any court of competent
jurisdiction, the remainder shall continue to be fully
enforceable in accordance with its terms or as it may be
modified by such court. The period of restriction specified
in paragraphs 6, 7 or 8 shall abate during the time of any
violation thereof and the remaining portion at the
commencement of the violation shall not begin to run until
the violation is cured.
(d) Survival. The provisions of this paragraph 8 and paragraphs
6 and 7 shall survive the termination or expiration of this
Agreement or Employee's employment for any reason.
9. Termination. Upon termination of Employee's employment
hereunder the Company, without any payment by Employee, shall:
(a) Auto. Transfer ownership and title to the automobile, if
any, belonging to the Company and then being used by the
Employee;
(b) Computer Equipment. Transfer ownership and title to the
laptop personal computer and/or desktop personal computer,
if any, belonging to the Company and then being used by the
Employee;
(c) Loans. Forgive the then outstanding principal balance and
interest on personal loans made by the Company to Employee
in 1987/88 and now having a principal balance of $41,000;
(d) References. Provide Employee references indicating that the
Employee's separation was amicable and was the result of
differences in business philosophy:
(e) Indemnification. Provide Employee with indemnification,
including any related legal costs, as provided under the
Company's by-laws for all action of Employee during the
course of his employment with the Company; and
(f) Outplacement. Provide outplacement services by a reputable
firm or firms such as Right Associates.
Employee acknowledges and agrees that the consideration from the
Company provided for in this agreement constitutes full
settlement of all claims that Employee may have against the
Company, its successors, assigns, affiliates, or any of its
officers, directors, shareholders, employees, agents, or
representatives, for compensation or otherwise in connection with
his employment or its termination, and Employee, except for
claims under this agreement, hereby releases all such claims or
rights, including without limitation any amounts for termination
due under any Company policy.
10. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives,
successors and assigns and shall inure to their respective
benefits.
(b) Modification. This Agreement shall not be subject to change,
modification, or discharge, in whole or in part, except by
written instrument signed by the parties; provided, however,
that if any of the terms, provisions or restrictions of
paragraph 6, 7 or 8 are held to be in any respect
unreasonable restrictions upon Employee, then the court so
holding shall reduce the territory to which it pertains
and/or the period of time in which it operates or effect any
other change to the extent necessary to render any of said
terms, provisions or restrictions enforceable.
(c) Waiver. The failure by the Company to insist upon strict
compliance by the Employee with respect to any of the terms
or conditions hereof shall not be deemed a waiver or
relinquishment of any other terms or conditions nor shall
any failure to exercise any right or power hereunder at one
or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
(d) Captions. The captions of this Agreement are inserted for
convenience only and are not to be construed as forming a
part of this Agreement.
(e) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of
Illinois.
(f) Notices. All notices required to be given hereunder to the
Company shall be addressed to its principal executive office
at 40W267 Keslinger Road, LaFox, Illinois 60147; attention:
William G. Seils, by certified or registered mail. All
notices required or to be given hereunder to the Employee
shall be addressed to the Employee at his residence as last
reflected on the records of the Company, by certified or
registered mail. Notice shall be deemed given if delivered
in person to William G. Seils on behalf of the Company or to
the Employee, or if mailed, when deposited in the United
States Mail addressed as aforesaid.
(g) Assignment. This is a personal services agreement, and
Employee's performance and obligations hereunder shall not
be assigned or delegated by Employee, and any purported
assignment or delegation shall be void.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement the day and year first above written.
EMPLOYEE RICHARDSON ELECTRONICS, LTD.
/s/ Leonard R. Prange /s/ Edward J. Richardson
Leonard R. Prange By:
Edward J. Richardson,
President and CEO