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RICHARDSON ELECTRONICS LTD/DE | RICHARDSON ELECTRONICS, LTD

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Title: EMPLOYMENT, NONDISCLOSURE AND NON-COMPETE AGREEMENT
Date: 6/27/2014
Industry: Electronic Instr. and Controls     Sector: Technology

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           Exhibit 10.1     

EMPLOYMENT, NONDISCLOSURE AND NON-COMPETE AGREEMENT

 

THIS EMPLOYMENT, NONDISCLOSURE AND NON-COMPETE AGREEMENT (“Agreement”) is made and entered into as of this 26th day of June, 2014, by and between RICHARDSON ELECTRONICS, LTD. , a Delaware corporation with its principal place of business located at 40W267 Keslinger Road, P.O. Box 393, LaFox, IL 60147-0393 (the “Employer”), and Gregory J. Peloquin , an individual whose current residence address is 10N105 Burlington Road, Hampshire, IL 60140 (“Employee”).

 

RECITALS

 

WHEREAS , the Employer desires to employ Employee as its Executive Vice President, EDG, upon the terms and conditions stated herein; and

 

WHEREAS , Employee desires to be so employed by the Employer at the salary and benefits provided for herein; and

 

WHEREAS , Employee acknowledges and understands that during the course of his employment, Employee has and will become familiar with certain confidential information of the Employer which provides Employer with a competitive advantage in the marketplace in which it competes, is exceptionally valuable to the Employer, and is vital to the success of the Employer’s business; and

 

WHEREAS , the Employer and Employee desire to protect such confidential information from disclosure to third parties or its use to the detriment of the Employer; and

 

WHEREAS , the Employee acknowledges that the likelihood of disclosure of such confidential information would be substantially reduced, and that legitimate business interests of the Employer would be protected, if Employee refrains from competing with the Employer and from soliciting its customers and employees during and following the term of the Agreement, and Employee is willing to covenant that he will refrain from such actions.

 

NOW THEREFORE , in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto acknowledge and agree as follows:

 

ARTICLE ONE

 

NATURE AND TERM OF EMPLOYMENT

 

1.01     Employment . The Employer hereby agrees to employ Employee and Employee hereby accepts employment as the Employer’s Executive Vice President, EDG.

 

1.02     Term of Employment . Employee’s employment pursuant to this Agreement shall commence on June 26, or such other date as may be agreed upon by Employee and the Employer (the “Effective Date”) and, subject to the other provisions of this Agreement, shall continue for a period of five years thereafter (the “Employment Term”). The Employment Term shall be extended automatically for successive one-year periods unless written notice of nonrenewal is provided to the Employee or the Employer within 60 days prior to the expiration of the Employment Term.

 

1.03     Duties . Employee shall perform such managerial duties and responsibilities as may be assigned by Employer’s Chief Executive Officer or such other person as the Employer may designate from time to time. Employee will adhere to the policies and procedures of the Employer, including, without limitation, its Code of Conduct, and will follow the supervision and direction of the Chief Executive Officer, or such other person as the Employer may designate from time to time, in the performance of such duties and responsibilities. Notwithstanding the foregoing, for the first 12 months of the Employment Term, the Employee’s duties and responsibilities shall be limited to the Employer’s Electron Device Group including its existing product lines as of 4/1/14, and the Employee shall not provide any services in the RF and power conversion line of business. Employee agrees to devote his full working time, attention and energies to the diligent and satisfactory performance of his duties hereunder, and to developing and improving the business and best interests of the Company. Employee will use all reasonable efforts to promote and protect the good name of the Company and will comply with all of his obligations, undertakings, promises, covenants and agreements as set forth in this Agreement. Employee will not, during the Employment Term or during any period during which Employee is receiving payments pursuant to Article 2 and/or Section 5.04, engage in any activity which would have, or reasonably be expected to have, an adverse affect on the Employer’s reputation, goodwill or business relationships or which would result, or reasonably be expected to result, in economic harm to the Employer.

 

 


 

 

 

ARTICLE TWO

 

COMPENSATION AND BENEFITS

 

For all services to be rendered by Employee in any capacity hereunder (including as an officer, director, committee member or otherwise of the Employer or any parent or subsidiary thereof or any division of any thereof) on behalf of the Employer, the Employer agrees to pay Employee so long as he is employed hereunder, and the Employee agrees to accept, the compensation set forth below.

 

2.01     Base Salary . During the term of Employee’s employment hereunder, the Employer shall pay to Employee an annual base salary (“Base Salary”) at the rate of three hundred nine thousand dollars ($309,000), payable in installments as are customary under the Employer’s payroll practices from time to time. The Employer at its sole discretion may, but is not required to, review and adjust the Employee’s Base Salary from year to year; provided, however, that, except as may be agreed in writing by Employee, Employer may not decrease Employee’s Base Salary. 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.

 

2.02     Incentive Plan . During the term of the Employee’s employment hereunder, the Employee shall be a participant in the Corporate Incentive Plan, as modified from time to time (the “Annual Incentive Plan”) and will be eligible for a bonus (“Bonus”) pursuant thereto. The Employee’s “target bonus percentage” for purposes of the Annual Incentive Plan shall be fifty percent (50%). Such Bonus shall be determined and paid strictly in accordance with the Annual Incentive Plan as modified or reduced by Employer at its discretion, and for any partial fiscal year the Bonus shall be computed and paid only for the portion of the fiscal year Employee is employed hereunder.

 

2.03     Auto Allowance and Vacation . During the term of the Employee’s employment hereunder, the Employee shall be paid an auto allowance of $1,000 per month. Employee shall be entitled to vacation in accordance with Employer’s vacation policy in effect from time to time; provided, that notwithstanding, anything to the contrary in such policy, Employee shall be eligible for three (3) weeks vacation in calendar year 2014 and four (4) weeks vacation per year thereafter.

 

2.04        Options .  Employee will be granted a Stock Option under Employer’s Incentive Compensation Plan for 25,000 shares with an exercise price equal to the closing price of the Employer’s Common Stock, as reported by NASDAQ, on the date on which the Compensation Committee has approved the Award, and that will vest in five equal annual installments over five years. After Employee’s first year of service, on an annual basis Employer’s Chief Executive Officer will recommend to the Board of Directors of the Employer that Employee be granted a Stock Option under Employer’s Incentive Compensation Plan, subject to the terms and conditions of the Incentive Compensation Plan.

 

2.05     Other Benefits . Employer will provide Employee such benefits (other than bonus, auto allowance, severance, vacation and cash incentive compensation benefits) as are generally provided by the Employer to its other employees, including but not limited to, health/major medical insurance, dental insurance, disability insurance, life insurance, sick days and other employee benefits (collectively “Other Benefits”), all in accordance with the terms and conditions of the applicable Other Benefits Plans as in effect from time to time. Nothing in this Agreement shall require the Employer to maintain any benefit plan, nor prohibit the Employer from modifying any such plan as it sees fit from time to time. It is only intended that Employee 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.

 

2.06     Disability . Any compensation Employee receives under any disability benefit plan provided by Employer during any period of disability, injury or illness shall be in lieu of the compensation which Employee would otherwise receive under Article Two during such period of disability, injury or sickness.

 

2.07     Withholding . All salary, bonus and other payments described in this Agreement shall be subject to withholding for federal, state or local taxes, amounts withheld under applicable benefit policies or programs, and any other amounts that may be required to be withheld by law, judicial order or otherwise.

 

 

 


 

 

ARTICLE THREE

 

CONFIDENTIAL INFORMATION

RECORDS AND REPUTATION

 

3.01     Definition of Confidential Information . For purposes of this Agreement, the term “Confidential Information” shall mean all of the following materials and information (whether or not reduced to writing and whether or not patentable) to which Employee receives or has received access or develops or has developed in whole or in part as a direct or indirect result of his employment with Employer or through the use of any of Employer’s facilities or resources:

 

(1)

Marketing techniques, practices, methods, plans, systems, processes, purchasing information, price lists, pricing policies, quoting procedures, financial information, customer names, contacts and requirements, customer information and data, product information, supplier names, contacts and capabilities, supplier information and data, and other materials or information relating to the manner in which Employer, its customers and/or suppliers do business;

 

(2)

Discoveries, concepts and ideas, whether patentable or not, or copyrightable or not, including without limitation 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 Employer 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 that are derived from or relate to Employee’s access to or knowledge of any of the above enumerated materials and information.

 

The Confidential 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 Employer utilized, developed or otherwise acquired such information or materials and which Employee has gathered or obtained (other than on behalf of the Employer) after termination of his employment with the Employer from such other public sources by his own expenditure of significant time, effort and money after termination of his employment with the Employer. Failure to mark any of the Confidential Information as confidential shall not affect its status as part of the Confidential Information under the terms of this Agreement.

 

3.02     Ownership of Confidential Information . Employee agrees that the Confidential Information is and shall at all times remain the sole and exclusive property of Employer. Employee agrees immediately to disclose to Employer all Confidential Information developed in whole or part by him during the term of his employment with Employer and to assign to Employer any right, title or interest he may have in such Confidential Information.

 

Without limiting the generality of the foregoing, every invention, improvement, product, process, apparatus, or design which Employee may take, make, devise or conceive, individually or jointly with others, during the period of his employment by the Employer, whether during business hours or otherwise, which relates in any manner to the business of the Employer either now or at any time during the period of his employment), or which may be related to the Employer in connection with its business (hereinafter collectively referred to as “Invention”) shall belong to and be the exclusive property of the Employer and Employee will make full and prompt disclosure to the Employer of every Invention. Employee will assign to the Employer, or its nominee, every Invention and Employee will execute all assignments and other instruments or documents and do all other things necessary and proper to confirm the Employer’s right and title in and to every Invention; and Employee will perform all proper acts within his power necessary or desired by the Employer to obtain letters patent in the name of the Employer (at the Employer’s expense) for every Invention in whatever countries the Employer may desire, without payment by the Employer to Employee of any royalty, license fee, price or additional compensation.

 

3.03.     Non Disclosure of Confidential Information . Except as required in the faithful performance of Employee’s duties hereunder (or as required by law), during the term of his employment with Employer and for a period after the termination of such employment until the Confidential Information no longer meets the definition set forth above of Confidential Information with respect to Employee, Employee agrees not to directly or indirectly reveal, report, publish, disseminate, disclose or transfer any of the Confidential Information to any person or entity, or utilize for himself or any other person or entity any of the Confidential Information for any purpose (including, without limitation, in the solicitation of existing Employer customers or suppliers), except in the course of performing duties assigned to him by Employer. Employee further agrees to use his best endeavors to prevent

 

 


 

 

the use for himself or others, or dissemination, publication, revealing, reporting or disclosure of, any Confidential Information.

 

3.04     Protection of Reputation . Employee agrees that he will at no time, either during his employment with the Employer or at any time after termination of such employment, engage in conduct which injures, harms, corrupts, demeans, defames, disparages, libels, slanders, destroys or diminishes in any way the reputation or goodwill of the Employer, its subsidiaries, or their respective shareholders, directors, officers, employees, or agents, or the services provided by the Employer or the products sold by the Employer, or its other properties or assets, including, without limitation, its computer systems hardware and software and its data or the integrity and accuracy thereof.

 

3.05     Records and Use of Employer Facilities . All notes, data, reference materials, memoranda and records, including, without limitation, data on the Employer’s computer system, computer reports, products, customers and suppliers lists and copies of invoices, in any way relating to any of the Confidential Information or Employer’s business (in whatever form existing, including, without limit, electronic) shall belong exclusively to Employer, and Employee agrees to maintain them in a manner so as to secure their confidentiality and to turn over to Employer all copies of such materials (in whole or in part) in his possession or control at the request of Employer or, in the absence of such a request, upon the termination of Employee’s employment with Employer. Upon termination of Employee’s employment with Employer, Employee shall immediately refrain from seeking access to Employer’s (a) telephonic voice mail, E-mail or message systems, (b) computer system and (c) computer data bases and software. The foregoing shall not prohibit Employee from using Employer’s public Internet (not intranet) site.

 

3.06.     Representations . Employee represents and warrants that his employment by Employer as described herein will not violate or conflict with and will not be constrained by any prior employment or consulting agreement or relationship. Employee represents and warrants that he is not under any restriction, and there are no other restrictions applicable to him or anyone else, that would prevent or make unlawful Employee being employed by Employer or performing his obligations hereunder to Employer. Employee further represents that he is not bound by the terms of any employment or severance agreement or any restrictive covenant other than the restrictive covenants described in Section 3.07 herein, with which he agrees to comply with as set forth in Section 3.07 herein. Employee has disclosed to Employer any restrictions that Employee has with any employer, service recipient, in either case whether current or former, or business.

 

3.07.     Confidential Information and Obligations to Former Employers . Employer respects the restrictive covenant obligations that Employee has with respect to his former employer, including regarding confidential and proprietary information, and Employee recognizes the importance of honoring these obligations. Employee understands and agrees to honor his ob


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