EMPLOYMENT AGREEMENT
This Agreement made this 17th day of October, 1994 by and between
RICHARDSON ELECTRONICS, LTD. whose principal office is 40W267 Keslinger Road,
LaFox, Illinois 60147 (hereinafter together with its subsidiaries called
"Company") and FLINT COOPER of 48 Rollingwood Drive, Houston TX 77080 (hereinaf-
ter called "Executive").
IT IS AGREED AS FOLLOWS:
1. Employment and Term. The Company employs the Executive, and the
Executive accepts employment by the Company, for a period commencing November 2,
1994 and ending May 31, 1998, unless earlier terminated as hereinafter provided.
The Agreement and Executive's employment shall renew automatically for
additional consecutive three (3) year terms, unless either party declines to
renew by written notice given not less than one (1) year prior to the
expiration of any such term; and provided further that at any time after the
initial term ending May 31, 1998, this Agreement and Executive's employment
may be terminated by not less than one (1) year written notice given by one
party to the other. In the event of such termination the Company may assign
such duties or no duties to Executive as it, in its discretion, desires
during such notice period. The Company may pay compensation in lieu of
notice for the required balance of notice period. Executive shall render
full time service to the Company upon the terms and conditions and for the
compensation hereinafter set forth. Executive shall not engage in any other
business activity, whether or not such business activity is pursued for gain
or any other pecuniary advantage, without the prior written consent of the
Company. The Company hereby consents to Executive's engaging in a tropical
plant business so long as his activity in connection therewith does
not interfere with his performance of his duties and obligations as an
employee of the Company.
2. Duties. Executive shall perform such managerial duties and
responsibilities in connection with the Company's Security Systems Division or
its successor and such other duties and responsibilities as Edward J. Richardson
or the Board of Directors of the Company may assign to Executive from time to
time and shall devote his full time and attention to the same. All such duties
and responsibilities shall be carried out by Executive as directed by and under
the supervision of Edward J. Richardson, President, or such other employees of
the Company as may from time to time be designated by the Board of Directors or
the President of the Company. Executive agrees to perform such duties and
responsibilities to the satisfaction of the President of the Company and to
comply with the policies and procedures established by the Company from time to
time, including, without limitation, its Code of Conduct.
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 thereof or any division of any thereof) on behalf
of the Company, the Company agrees to pay Executive so long as he is employed
hereunder, and the Executive agrees to accept, the following compensation:
A. Salary. A fixed salary ("Salary") at the rate of One Hundred
Thousand and No/100th Dollars ($100,000.00) per annum payable in install-
ments in accordance with the Company's regular pay periods for employees
generally. No additional compensation shall be payable to Executive by
reason of the number of hours worked or by reason of hours worked on
Saturdays, Sundays, holidays or otherwise.
B. Bonus. A bonus ("Bonus") commencing for the period after January 1,
1995 computed annually for each fiscal year of the Company until the date
on which Executive's employment with the Company is terminated in
accordance with this Agreement (provided, however if termination is due to
death or disability the Bonus will be computed through the end of the
Company's fiscal quarter in which such termination takes place), on one of
the following methods which shall be selected annually by Executive [and,
in the absence of a written election to the contrary, by method (1)]
(1) an amount equal to the amount which equals 50% of the cumulative
net after tax profits for such period, if any, of the Company's
Security System Division and after a charge (computed on a fiscal
quarterly basis) for the Company's investment in such Division as
hereinafter provided. In making the computation the following shall
be taken into account:
(a) The Company's investment in the Security Systems
Division as of May 31, 1994 shall be deemed to be
$3,422,000.00;
(b) All additional investment in cash or in kind in the
Security Systems Division by the Company shall be added to its
investment in the Division as and when made from time to time,
cash may be taken out and invested but such shall not reduce
the Company's equity in the Security System Division;
(c) The Company shall have added annually to its investment
in the Security Systems Division an amount equal to 50% of the
cumulative net after tax profits for such period, if any, of
the Company's Security System Division and after a charge for
the Company's investment in such Division as hereinafter
provided;
(d) The Company shall be entitled to an annual after-tax
return on its investment in the Security Systems Division of
12.5% on the amount so invested from time to time;
(e) If the Company does not withdraw the 12.5% return on its
investment as provided for in (d) above monthly as it is
earned the amount not withdrawn shall be deemed an additional
investment by the Company in the Security Systems Division
until such time as it is withdrawn;
(f) To the extent withdrawals are made by the Company of
excess cash, such amounts will be excluded from the calcula-
tion of the 12.5% return contemplated in (d) above but will
not reduce the ownership interest of the Company;
(g) The Company shall maintain internal financial records
which reflect the Security Systems Division as a discrete and
separate business entity; and
(h) The Security Systems Division financial records referred
to in (g) above shall include all direct expenses of the
Division, appropriate charges for expenses of the Company
which are of a general nature and not directly chargeable to
any one division as set forth in the Business Plan for the
Security System Division approved for the year, and taxes
computed as if the Security Systems Division stood alone as a
separate entity not a part of the Company, and otherwise
charges and computations shall be made in accordance with
accepted accounting practices as generally applied by the
Company.
(2) an amount computed for Executive as manager of the Security
Systems Division in the same manner and applying the same principles
used in computing bonus for that fiscal year for other Strategic
Business Unit Managers of the Company.
If Executive shall be employed for only a portion of a fiscal year the
Bonus for that year shall be reduced ratably for the portion of the year
not employed. The chief financial officer of the Company shall make a
computation of the Bonus amount, if any, for each fiscal year, or portion
thereof, of the Company after the date Executive's employment commences as
specified in paragraph 1. above, within 120 days after the end of each
fiscal year of the Company's hereafter. Executive shall have fourteen (14)
days to notify the Company in writing of any disagreement with the
computation by specifying the particulars of such disagreement. If no
notice of disagreement is received by the Company within such period such
computation shall be in all respects final and binding upon the Company and
upon the Executive. If notice of disagreement is received in a timely
manner the parties shall seek to resolve the disagreement through
discussion. If so resolved, the computation resulting from such resolution
shall be in all respects final and binding upon the Company and upon the
Executive. If the parties are unable to resolve the disagreement by
discussion, either party by written notice to the other given not sooner
than seven (7) days after the Executive's notice of disagreement, may
submit the disagreement to the firm of independent public accountant's then
acting as the Company's auditor. The decision of such audit firm shall be
final and binding upon the Company and upon the Executive. The costs,
expenses and fees of such audit firm in connection with resolving a
disagreement shall be borne by the parties in proportion to the allowance
of the amount in dispute by the audit firm, e.g. if the Executive is
claiming an additional $10,000 of Bonus and the audit firm determines
Executive is entitled to an additional $1,000, then the Executive will pay
90% and the Company 10% of the audit firm's costs, expenses and fees for
such determination.
C. Payment of Bonus. Subject to the provisions hereafter in this
subparagraph C. regarding payment on termination of employment and the
provisions of subparagraph F. of this paragraph 3. regarding payment in the
event of certain action by the Company, no payment of Bonus shall be made
or due until 120 days after the computation of the Bonus for the period
ending May 31, 1998. Thereafter, upon election of Executive made by
written notice to the Company during the 30 day period after the Company
advises Executive of his Bonus account after the end of each fiscal year,
the Company shall pay the amount of Bonus or portion thereof, if any, due
to Executive which Executive shall specify in such notice of election.
Subject to the other provisions of this Agreement (including, without
limitation, those relating to termination of employment and those of
subparagraph F. of this paragraph 3.) Executive may elect (as specified in
the above mentioned notice of election to receive payment) to receive such
Bonus in any form specified in clause (1), (2) or (3) below until the
Company proposes an adjustment in the right to elect the form of payment
because of a proposed initial public offering of equity securities of the
separate corporation operating the business of the Company's Security
Systems Division referred to in (2) below:
(1) shares of Common Stock, $.05 par value, of the Company, at a
price per share equal to the Fair Market Value of Common Stock on the
date notice of election to take Bonus in the form of such stock is
given; provided, however, that the Dollar amount of Bonus elected to
be taken in the form of such stock shall be increased or decreased
in value, as the case may be, in the same proportion that the Fair
Market Value of Common Stock on the date notice of election to take
Bonus in the form of such stock is given bears to the book value per
share of such Common Stock as reflected on the Company's Balance
Sheet for the Company's fiscal quarter ended prior to the election
[e.g., if the Fair Market Value of Common Stock is $10 per share and
the book value is $5 per share (i.e., 2 times book) then each $1 of
Bonus being taken in the form of stock shall be increased in value
to $2 (i.e., multiplied by 2) or if the Fair Market Value of Common
Stock is $5 per share and the book value is $10 per share (i.e., .5
times book) then each $1 of Bonus being taken in the form of stock
shall be reduced in value to $.50 (i.e., multiplied by .5)], or
(2) if the Company has prior thereto created a separate corporation
to operate the business of the Security System Division by transfer-
ring the assets and liabilities of the Security Systems Division to
such new corporation, common stock of such corporation created by the
Company to operate the business of the Security Systems Division so
that the shares issued to Executive shall be that number which
represents that portion of the total number of shares of the new
corporation held by him and the Company after the issuance which is
the same as the portion of the total investment in such new corpora-
tion by him and the Company (considering the Company's investment for
such purpose to be the amount determined in the manner provided under
B.(1)(a) through (h) above, or
(3) partly in cash and partly in stock under C.(1) or (2) above, in
which case the number of shares of stock shall be reduced to reflect
the cash taken by Executive.
No fractional shares shall be issued, cash shall be paid for any fractional
share amount. Fair Market Value of Common Stock shall mean an amount equal
to the mean of the closing bid and asked quotations for a share of Common
Stock in the over-the-counter market as of the date for which such value
is being determined, as reported by the National Association of Securities
Dealers, Inc. through NASDAQ or, in the event that the Common Stock is
listed on any exchange (including, without limitation, the NASDAQ National
Market System), the price established by the last sale on such exchange on
that date or, if there were no sales on that date, the mean of the bid and
asked prices for Common Stock on that exchange at the close of business on
that date. If Executive does not specify the form of payment of Bonus in
his election to receive payment it shall be made in such form as the
Company elects. Notwithstanding the foregoing, if on the date of notice
of termination of Executive's employment with the Company hereunder,
Executive has not theretofore or within ten (10) days thereafter made an
election in writing as to one of the options indicated in C.(1) through (3)
above with respect to any remaining Bonus, if any, which may be or become
due him, then the Company may pay the same in such form as it elects.
D. Withholding. The Company may, to the extent permitted by law, deduct
from any payments or transfers of any kind due Executive (including,
without limitation, Bonus) the amount of any federal, state, local or
foreign taxes required by any governmental authority to be withheld or
otherwise deducted or paid with respect to Salary, Bonus, or any other
amount due or paid to Executive.
E. Conditions Upon Issuance of Shares. The right to elect that shares
of stock or other equity be issued pursuant to any election as to form of
payment of Bonus under subparagraph C. of this paragraph 3. is subject to
the Company's determination, in its discretion, that the listing,
registration, or qualification upon any securities exchange or under any
federal, state, or foreign law or the consent or approval of any governmen-
tal authority is necessary or desirable as a condition of, or in connection
with, the granting of such right, the exercise of such election or issuance
of shares or other equity pursuant thereto and such election may not be
exercised in whole or in part unless and until such listing, registration,
qualification, consent, or approval shall have been effected or obtained,
by and at the expense of Executive, free of any conditions not acceptable
to the Company.
F. No Effect on Corporate or Stockholder Action. The existence of the
right to elect that the payment of Bonus be in the form of stock or other
equity under subparagraph C. of this paragraph 3. shall not affect in any
way the right or power of the Company or any subsidiary thereof or their
respective stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company's or
subsidiary's capital structure or business, or any merger or consolidation
of the Company or any subsidiary, or the spin off of any business or part
thereof, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting any stock or other equity to be issued upon
exercise of election under subparagraph C. of this paragraph 3. or the
rights thereof, or the dissolution or liquidation of the Company or any
subsidiary, or any sale or transfer of all or any part of the assets or
business of the Company or any subsidiary, or any other corporate act or
proceeding of the Company or any subsidiary, whether of a similar character
or otherwise. In the event of any such action by the Company or any
subsidiary, the Company may, in its discretion, make such adjustment in the
right to elect the form of payment of Bonus as it deems appropriate,
including, without limitation, termination of right to elect form of
payment (but not terminate the right to Bonus); provided the Company gives
Executive 30 days notice thereof and permits Executive to exercise (subject
to subparagraph E. of this paragraph 3.) his right to receive payment, as
soon as practicable, of Bonus, if any, then accrued in any form permitted
under subparagraph C. of this paragraph 3. within such 30 day period after
such notice is given by the Company.
G. Employee Benefits. In addition to the Salary and Bonus provided
above Executive shall be entitled to participate in benefits generally
offered to all Company employees for which and to the extent he is eligible
and subject to the discretion of the Company provided thereunder, including
vacations and holidays, profit sharing and pension plan, medical, dental,
long term disability and life insurance as detailed in the Richardson
Electronics Group Insurance Plan, Long Term Disability Plan, Employee
Benefit Plan and the Employee Profit Sharing Trust and the Employees Stock
Purchase Plan and other plans applicable to employees generally. In the
event that the Executive shall, during the term of his employment
hereunder, die or become disabled he shall be entitled to the benefits
provided to employees generally under the Company's Employee Group
Insurance and Long Term Disability Benefit Plans for executives and the
Company shall have no further duty or obligation to pay the Salary or Bonus
provided above beyond such date of death or disability.
H. Expenses. Executive shall also be entitled to reimbursement for
business and business related travel expenses in accordance with the
Company's regular business and travel expense reimbursement policy in
effect from time to time.
I. Company's Rights. Nothing in this Agreement shall require the
Company to maintain any benefit plan nor prohibit the Company from
modifying any such plan as it sees fit from time to time. It is only
intended that Executive shall be entitled to participate in any such plan
offered for which he may qualify under the terms of any such plan as it may
from time to time exist, in accordance with the terms thereof and subject
to discretion of the Company reserved in any such plan.
4. Confidentiality.
A. Definition of Proprietary Information. For purposes of this
Agreement, the term "Proprietary Information" shall mean all of the
following materials and information (whether or not reduced to writing and
whether or not patentable) to which Executive has received or may receive,
have access to or receive access to, or has developed or may develop, in
whole or in part, as a direct or indirect result of his employment with the
Company, its predecessors or its subsidiaries or in the course of his
employment with the Company, its predecessors or its subsidiaries or
through the use of any of the Company's, its predecessors' or its
subsidiaries's facilities or resources:
(1). Customer lists, including, but not limited to, customer names,
customer requirements, and customer data; supplier lists, including,
but not limited to, supplier names, supplier capabilities, and
supplier data; marketing techniques; practices; methods; plans;
systems; processes; purchasing information; price lists; pricing
policies; quoting procedures; product information; operating policies
and procedures; financial information; and other materials or
information relating to the manner in which the Company, its
predecessors or its subsidiaries does business;
(2) Discoveries, concepts and ideas, whether patentable or not, or
copyrightable or not, including, but not limited to, the nature and
results of research and development activities, processes, formulas,
techniques, "know-how", designs, drawings and specifications;
(3) Any other materials or information related to the business or
activities of the Company, its predecessors or its subsidiaries which
are not generally known to others engaged in similar businesses or
activities or which could not be gathered or obtained without
significant expenditure of time, effort and money; and
(4) All inventions and ideas which are derived from or relate to
Executive's access to or knowledge of any of the above enumerated
materials or information.
The Proprietary Information shall not include any materials or information
of the types specified above to the extent that such materials or
information are publicly known or generally utilized by others engaged in
the same business or activities in the course of which the Company, its
predecessors or its subsidiaries utilized, developed or otherwise acquired
such information or materials and which Executive has gathered or obtained
from such other public sources by his own (other than on behalf of the
Company, its predecessors or subsidiaries) expenditure of significant time,
effort and money. Failure to mark any of the Proprietary Information as
confidential shall not affect its status as part of the Proprietary
Information under the terms of this Agreement.
B. Ownership of Proprietary Information. Executive agrees that the
Proprietary Information (including, without limitation, that which is
developed, created or prepared by or for Executive) is and at all times
shall remain the sole and exclusive property of the Company. All records
relating to the Company's or any subsidiary's operations, investigations,
and business, and any notes with respect to such records, made or received
by Executive in connection with his services hereunder, and all copies of
such records or notes made by, for, or with the consent of Executive, are
and shall be the Company's property exclusively, and Executive shall keep
the same at all times in his custody and subject to his control, and shall
surrender the same to the Company at the Company's request but, in any
event, no later than at the termination of his employment with the Company.
C. Non-Disclosure of Proprietary Information. Executive represents,
warrants and agrees that he will not (except in the proper course of his
employment duties for the Company) either during or after the term of his
employment with the Company, make use of, disseminate, publish, or disclose
to any person, firm, company, association, or other entity, and shall use
his best endeavors to prevent the use, dissemination, publication, or dis-
closure of, any Proprietary Information.
5. Non Competition.
A. Competition. Independent of any obligation under any other paragraph
or subparagraph hereof, Executive 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 (except that if Executive's termination of employment is
involuntary other than pursuant to the provisions of clause (i) of
paragraph 8 below, then the period of restriction shall be for one year
after the end of the period for which the Company has paid compensation to
Executive, or if Executive's termination of employment is involuntary and
pursuant to the provisions of clause (i) of paragraph 8 below, then the
restriction shall terminate on the date of termination of employment, or
if termination is by Executive because, and Company has not, provided the
capital investment called for by the agreed to annual Business Plan, then
the restriction shall terminate on the date of termination of employment)
he will not, except with the approval of the 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, sharehold-
er, creditor, partner, promoter, proprietor, associate, employee,
representative or otherwise, become or be interested in, or associated
with, any individual or entity, other than the Company (including its
subsidiaries), engaged primarily in the business of distributing closed
circuit television security systems, parts, components or services in the
territories served by the Company's Security Systems Division and in the
channels and to the customers served by such Division, provided, however,
that, anything above to the contrary notwithstanding, Executive 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 or in the over-the-
counter market, so long as the holdings of the Executive, directly or
indirectly, in the aggregate, constitute less than 1% of the outstanding
voting securities of such corporation.
B. Customers or Suppliers. Independent of any obligation under any
other paragraph or subparagraph hereof, Executive 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 (except that if Executive's termination of
employment is involuntary other than pursuant to the provisions of clause
(i) of paragraph 8 below, then the period of restriction shall be for one
year after the end of the period for which the Company has paid compensa-
tion to Executive, or if Executive's termination of employment is
involuntary and pursuant to the provisions of clause (i) of paragraph 8
below, then the restriction shall terminate on the date of termination of
employment, or if termination is by Executive because, and Company has not,
provided the capital investment called for by the agreed to annual Business
Plan, then the restriction shall terminate on the date of termination of
employment) he will not, except with the approval of the 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 the twelve (12) month
period prior to the termination of Executive's employment with the Company
was a customer or supplier, or proposed customer or supplier, of the
Company (including its subsidiaries) upon whom Executive called or whose
account he supervised on behalf of the Company (including its subsid-
iaries), to purchase (with respect to customers) or sell (with respect to
suppliers) products or services of the types or kind sold by the Security
Systems Division of the Company or any other division or part of the
Company for which Executive has rendered services during his employment
with the Company (including its subsidiaries) or which could be substituted
for or which serve the same purpose or function as products or services
sold by such division or part of the Company (including its subsidiaries),
and Executive shall not approach, respond to, or otherwise deal with any
such customer or supplier for such purpose or authorize or knowingly
cooperate with the taking of any such actions by any other individual or
entity.
C. Employees. Independent of any obligation under any other paragraph
or subparagraph hereof, Executive 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 (except that if Executive's termination of employment is
involuntary then the period of restriction shall be for one year after the
end of the period for which the Company has paid compensation to Execu-
tive,) he will not, directly or indirectly (whether or not for compensation
or profit) work for or employ, or cause to be employed by another, any
person who was an employee, officer, or agent of the Company or any of its
subsidiaries at any time during the twelve (12) month period prior to the
termination of Executive's employment with the Company; provided, however,
that the restriction in this subparagraph C. shall not apply if the person
or entity in which such employment is engaged is not engaged in the
business of distributing closed circuit television security systems, parts,
components or services.
D. Remedies. In the event of a breach or threatened breach by the
Executive of the provisions of this paragraph 5 or of paragraph 4 the
Company shall be entitled to an injunction restraining the Executive 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 5 and
paragraph 4 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 5 or 4 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.
E. Survival. The provisions of this paragraph 5 and paragraph 4 shall
survive the termination or expiration of this Agreement or Executive's
employment for any reason.
6. The Company's Good Name. Executive agrees that he will at no time
engage in conduct which demeans, defames, libels, slanders, destroys or
diminishes in any way the reputation or goodwill of the Company, its subsidiar-
ies, or their respective shareholders, directors, officers, employees, or agents
or the products sold by the Company or any of its subsidiaries.
7. Executive Not Subject to Restrictions. The Company does not desire
to acquire from Executive any secret or confidential know-how or information
which he may have acquired from others nor does it wish to cause a breach of any
non compete or similar agreement to which Executive may be subject. Executive
represents and warrants that (i) other than for this Agreement, he is not
subject to or bound by any confidentiality agreement or non disclosure or
non compete agreement or any other agreement having a similar intent, effect
or purpose, and (ii) he is free to use and divulge to the Company, without
any obligation to or violation of any right of others, any and all
information, data, plans, ideas, concepts, practices or techniques which he
will use, describe, demonstrate, divulge, or in any other manner make known
to the Company during the performance of services hereunder.
8. Termination. Anything in this Agreement to the contrary notwith-
standing, the Company shall be entitled to terminate Executive's employment and
right to receive compensation hereunder (including, without limitation, the
right to receive any unpaid Bonus which might otherwise be or become due
under any other provision hereof, unless the termination is pursuant to
clause (i) below, in which event Bonus, if any, computed under the other
provisions hereof to the date of termination shall be paid to Executive) if
(i) he fails, or refuses, to perform the duties and responsibilities required
of him under this Agreement, (ii) the Security Systems Division of the
Company (or the successor entity to such business) fails in any fiscal year
to meet the earnings goal therefor as set forth in the Business Plan (as
defined in paragraph 9 below) for such fiscal year, (iii) he fails, or
refuses to perform, or otherwise breaches any of the other covenants,
agreements, or provisions of this Agreement, (iv) commits an act
of fraud on the Company, (v) commits, or is arrested for, or is otherwise
officially charged with a felony or any crime involving moral turpitude, or any
other criminal activity or unethical conduct which, in the good faith opinion of
the Company, would impair the Executive's ability to perform his duties
hereunder or would impair the business or reputation of the Company, or (vi)
commits an act, or omits to take action, in bad faith or in detriment of the
Company. Executive's death or disability during the term of his employment
hereunder shall not be deemed a breach by him of the provisions of this
Agreement; however, in such event, the Company's obligation with respect to
payment of compensation to Executive shall be as provided in its employee
benefit package for executive employees generally (i.e. the Company's
Employee Group Insurance and Long Term Disability Benefit Plans for
employees as may be in effect) which shall be in lieu of any amounts
otherwise provided in this Agreement after the date of such disability or
death (except for Bonus which shall be computed and paid for the period
through the end of the quarter in which such death or disability occurs).
9. Business Plan and Executive Authority. Attached hereto is a business
plan for the Company's Security Systems Division (the "Business Plan"). The
Company agrees to provide the capital investment for fiscal 1995 contemplated by
the Business Plan. It is agreed that the parties will seek to agree prior to
the end of each fiscal year on a business plan for the next fiscal year.
Such agreed to plan shall then become the Business Plan. It is the intent of
the parties that such plans will in general follow the 5 year component of the
Business Plan attached hereto, will contain general corporate charges
determined using principles used to determine such charges in the Business
Plan attached hereto and will not require capital investment (in addition to
cash generated by the Division) in excess of that contemplated by the 5 year
plan portion of the attached Business Plan. Subject to general corporate
law and the provisions of paragraph 2. hereof, the Executive shall have
authority to operate the Division within the limitation of such agreed upon
annual Business Plan, including the right to hire and fire anyone in the
Division, to set up operations in Houston and to enter into agreements with
customers and suppliers in the ordinary course of business; provided, such
activities do not affect the Company as a whole or its other divisions or
subsidiaries or violate other agreements or restrictions that may be
applicable to the Company (for example its credit agreement with the
Bank). Further anything not contemplated by the agreed to annual Business
Plan shall require the prior approval of the Company's chief executive
officer or its board of directors as the case may be. The Executive is
authorized to control when bills of the Division are paid; provided that he
shall not withhold payment for more than fourteen (14) days after the due
date except in the case of a bona fide dispute, in which event only the
amount in dispute shall be withheld.
10. Notices. All notices required to be given hereunder to the Company
shall be in writing and delivered in person to the President of the Company or
sent by certified or registered mail addressed to its principal executive office
at 40W267 Keslinger Road, Lafox, Illinois 60147, Attention: President, or at
such other address of which the Company notifies Executive pursuant to this
paragraph. All notices required or to be given hereunder to Executive shall
be in writing and delivered to him in person or sent by certified or
registered mail addressed to him at his last known residence address
appearing on the Company's personnel records. Notice shall be deemed given
when delivered in person or, if mailed, when deposited in the United States
Mail addressed as aforesaid.
11. Miscellaneous.
A. Entire Agreement. This Agreement supersedes any and all other
agreements, written or oral, between the parties hereto with respect to the
employment of Executive by the Company and contains all of the covenants
and agreements between the parties with respect to such employment. Each
party acknowledges that no representations, inducements, promises, or
agreements, written, oral or otherwise, have been made by any party, or
anyone acting or purporting to act on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid and binding.
B. Binding Effect. Subject to paragraph 11., this Agreement shall be
binding upon the parties hereto, their heirs, legal representatives,
successors and assigns and shall inure to their respective benefits.
C. 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 4 or subparagraphs 5.A.
through C. are held to be in any respect unreasonable restrictions upon
Executive, 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.
D. Waiver. The failure by the Company to insist upon strict compliance
by the Executive 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.
E. Captions. The captions of this Agreement are inserted for conve-
nience only and are not to be construed as forming a part of this
Agreement.
F. Governing Law and Jurisdiction. This Agreement is made subject
to and shall be governed and construed under the laws of the State of
Illinois. The parties agree that the state and federal courts situated in
Kane or Cook County in the State of Illinois shall have exclusive jurisdic-
tion to enforce this Agreement and to resolve any disputes with respect to
this Agreement, with each party irrevocably consenting to the jurisdiction
thereof for any actions, suits or proceedings arising out of or relating
to this Agreement and each party irrevocably waiving its rights to jury
trials with respect thereto. Executive further agrees and consents to
submit to the jurisdiction of any such Court over his person for purposes
of enforcing any terms of this Agreement or resolving any disputes which
arise under this Agreement. Further Executive specifically agrees to waive
his right to remove or transfer any proceeding from any such Court. The
judgments, orders and decrees of any such Court shall be entitled to full
faith and credit in all other jurisdictions and the attempt to enforce the
same in any other jurisdiction will not be contested.
12. Assignment. This is a personal services agreement, and Executive's
performance and obligations hereunder shall not be assigned or delegated by
Executive, and any purported assignment or delegation shall be void. Executive
may assign, in whole or in part, any of the benefits to be provided to him under
this Agreement, subject in all cases to compliance with all applicable laws,
rules and regulations, including, without limitation, securities laws, rules and
regulations.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement
the day and year first above written.
EXECUTIVE RICHARDSON ELECTRONICS, LTD.
/s/ Flint Cooper By: /s/ Edward J. Richardson
Flint Cooper Edward J. Richardson, President