PERCEPTRON, INC.
SEVERANCE AGREEMENT - EXECUTIVE
 
THIS SEVERANCE AGREEMENT, dated as of July 2, 2010 (the “Agreement”), is between
Perceptron, Inc. (the “Company”) and Richard Price, who is currently employed by
the Company in the position of Vice President – Commercial Products Business
Unit (the “Executive”).
 
1.           Operation of Agreement.  This Agreement sets forth the severance
compensation that the Company shall pay the Executive if the Executive’s
employment with the Company terminates under one of the applicable provisions
set forth herein.  As used in this Agreement, employment with the Company shall
be deemed to include employment with a subsidiary of the Company.  The severance
provided under this Agreement is intended either to be exempt from or comply
with the provisions of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”).
 
2.           Defined Terms.  For purposes of this Agreement, the following terms
shall have the meanings set forth below:
 
(a)           “Administrator” is defined in Section 15(a).
 
(b)           “Agreement” is defined in the preamble.
 
(c)           “Benefit Continuation Period” is defined in Section 3(b)(iii).
 
(d)           “Cause” shall mean the Executive’s
 
(i)           personal dishonesty in connection with the performance of services
for the Company,
 
(ii)          willful misconduct in connection with the performance of services
for the Company,
 
(iii)         conviction for violation of any law involving (A) imprisonment
that interferes with performance of duties or (B) moral turpitude,
 
(iv)        repeated and intentional failure to perform stated duties, after
written notice is delivered identifying the failure, and it is not cured within
10 days following receipt of such notice,
 
(v)         breach of a fiduciary duty to the Company,
 
(vi)        breach of the Proprietary Information and Invention Agreement or the
Perceptron Executive Agreement Not to Compete, or
 
(vii)       prior to a Change in Control, engaging in activities detrimental to
the interests of the Company that have a demonstrable adverse effect on the
Company.
 
 
 

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(e)           “Change in Control” shall be deemed to have occurred upon the
occurrence of any of the following events:
 
(i)           A merger involving the Company in which the Company is not the
surviving corporation (other than a merger with a wholly-owned subsidiary of the
Company formed for the purpose of changing the Company’s corporate domicile);
 
(ii)          A share exchange in which the shareholders of the Company exchange
their stock in the Company for stock of another corporation (other than a share
exchange in which all or substantially all of the holders of the voting stock of
the Company, immediately prior to the transaction, exchange, on a pro rata
basis, their voting stock of the Company, for more than 50% of the voting stock
of such other corporation);
 
(iii)         A sale of all or substantially all of the assets of the Company;
or
 
(iv)         Any person or group of persons (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) (other than any employee benefit
plan or employee benefit trust benefiting the employees of the Company) becoming
a beneficial owner, directly or indirectly, of securities of the Company
representing more than 50% of either the then outstanding Common Stock of the
Company, or the combined voting power of the Company’s then outstanding voting
securities.
 
(f)           “Change in Control Benefit Continuation Period” is defined in
Section 4(c)(iii).
 
(g)           “Change in Control Severance Benefits” is defined in Section 4(c).
 
(h)           “Claimant” is defined in Section 15(b).
 
(i)            “Code” is defined in Section 1.
 
(j)            “Company” is defined in the preamble.
 
(k)           “Disability” shall mean the Executive’s inability to substantially
perform the Executive’s duties for such period as would qualify the Executive
for benefits under the long-term disability insurance policy provided by the
Company or, if no such policy is provided, the Executive’s total and permanent
disability which prevents the Executive from performing for a continuous period
exceeding six months the duties assigned to the Executive.  The determination of
Disability shall be made by a medical board-certified physician mutually
acceptable to the Company and the Executive (or the Executive’s legal
representative, if one has been appointed), and if the parties cannot mutually
agree to the selection of a physician, then each party shall select such a
physician and the two physicians so selected shall select a third physician who
shall make this determination.
 
(l)            “Executive” is defined in the preamble.
 
(m)          “Good Reason” is defined in Section 4(a)(ii).
 
 
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(n)           “Outside Date” is defined in Section 16(e).
 
(o)           “Perceptron Executive Agreement Not to Compete” is defined in
Section 23.
 
(p)           “Prime Rate” is defined in Section 3(c).
 
(q)           “Proprietary Information and Invention Agreement” shall mean the
Proprietary Information and Invention Agreement dated November 4, 2009 between
the parties to this Agreement.
 
(r)           “Regular Severance Benefits” is defined in Section 3(b).
 
(s)           “Release” is defined in Sections 3(b) and 4(c).
 
(t)           “Termination of Employment” is defined in Sections 3 and 4.
 
3.           Termination of Employment.  The Executive shall be entitled to the
Regular Severance Benefits (as defined in Section 3(b) below) set forth in this
Section 3 if the Executive has incurred a Termination of Employment.  The
severance benefit provided under this Section 3 is in lieu of cash severance
payments offered under the Company’s documented severance policy, if any.
 
(a)           For purposes of Section 3 of the Agreement, “Termination of
Employment” shall be defined as the Executive’s involuntary termination by the
Company for any reason other than death, Disability or Cause; provided such
termination constitutes a “separation from service” as defined in Code Section
409A.
 
(b)           Upon satisfaction of the requirements set forth in this Section 3,
upon the Executive’s execution of a release (in the form attached hereto as
Exhibit A) (the “Release”), the Executive shall be entitled to (the “Regular
Severance Benefits”):
 
(i)           A cash severance benefit equal to one-half of the Executive’s
current annual base salary, as in effect at the time of the Termination of
Employment;
 
(ii)           A prorated portion of any bonus that the Executive would have
earned for the year of termination had the Executive been employed by the
Company at the end of the applicable bonus period;
 
 
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(iii)           Subject to Section 6, continuation of Company-provided health
(including vision and dental, if provided by the Company at the date of
termination) and welfare benefits (including executive life insurance coverage,
if provided by the Company to the Executive at the date of termination) for six
months or, if earlier, the death of the Executive (the “Benefit Continuation
Period”), at the same level and on comparable terms as provided by the Company
to its employees from time to time during this period, with the Company paying
any monthly premiums otherwise required to be paid by the Executive to continue
such coverage.  Health benefits provided during the Benefit Continuation Period
shall be provided in such a manner that the benefits (including the associated
costs and premiums) are excluded from the Executive’s income for federal income
tax purposes and, if the Company reasonably determines that providing continued
coverage under one or more of the health care benefit plans maintained by the
Company could cause the benefits to be taxable to the Executive, the Company
shall provide the benefits at the required level through the reimbursement of
the Executive for premiums for the purchase of individual insurance coverage;
provided, however, that the Company shall only be required to reimburse premiums
for such coverage to the extent the premiums do not exceed the greater of (i)
two times the annual premium paid by the Company for such coverage at the date
of termination or (ii) two times the then current amount of the COBRA premium
under the Company’s group health plan for comparable coverage.  Any continuation
of group health plan coverage under this paragraph shall run concurrently with
the period of required COBRA continuation coverage under the Code.  Welfare
benefits (other than health benefits) shall be continued only to the extent
permitted under the terms of such plans.
 
(c)           The Executive’s cash severance benefit under Section 3(b)(i) shall
be payable in the same manner as the Executive’s base salary and the pro rata
share of any bonus under Section 3(b)(ii) shall be payable at the time set forth
in the bonus program, or, in each case, such earlier time as is required to
avoid such payments being subject to Section 409A of the Code.  Notwithstanding
the foregoing, if at the time of Termination of Employment the Executive
constitutes a “Specified Employee” as defined in Code Section 409A, and the
Executive’s aggregate severance benefit is not exempt from Code Section 409A,
commencing at Termination of Employment, the Executive shall receive the
benefits that are exempt from Code Section 409A and shall receive any payments
that are not exempt from Code Section 409A until the attainment of any
applicable Code Section 409A cap, at which time, the remaining non-exempt
payments shall be suspended.  When a period of six months has lapsed from the
Executive’s Termination of Employment or, if earlier, the death of the
Executive, any suspended payments shall be aggregated and paid in a lump sum,
and the remaining compensation, if any, shall be paid in accordance with its
regular schedule.  Any payment, including amounts suspended under Code Section
409A, made later than 10 days following the Executive’s Termination of
Employment (or applicable due date under this Section 3 or Section 11(a) hereof)
for whatever reason, shall include interest at the Prime Rate plus two percent,
which shall begin accruing on the 10th day following the Executive’s Termination
of Employment (or applicable due date under this Section 3 or Section 11(a)
hereof).  “Prime Rate” shall be determined by reference to the prime rate
established by Comerica Bank (or its successor),in effect from time to time
commencing on the 10th day following the Executive’s Termination of Employment
(or applicable due date under Sections 3, 4, 11(a) or 16 hereof).
 
4.           Termination of Employment Following a Change in Control.  Subject
to Section 11(a) hereunder, the Executive shall be entitled to the Change in
Control Severance Benefits (as defined in Section 4(c) below) set forth in this
Section 4, in lieu of the severance benefits the Executive is entitled to under
Section 3 of this Agreement, if there has been a Change in Control and the
Executive has incurred a Termination of Employment.  The severance benefit
provided under this Section 4 is in lieu of cash severance payments offered
under the Company’s documented severance policy, if any.
 
 
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(a)           For purposes of Section 4 of the Agreement, “Termination of
Employment” shall be defined as:
 
(i)           The Executive’s involuntary termination by the Company for any
reason other than death, Disability or Cause; provided such termination
constitutes a “separation from service” as defined in Code Section 409A; or
 
(ii)           The Executive’s termination for “Good Reason,” defined as the
occurrence of any of the following events without the Executive’s written
consent, if the Executive terminates employment within one (1) year following
the occurrence of such event:
 
(A)            material diminution in the Executive’s position, duties,
responsibilities or status with the Company from his position, duties,
responsibilities or status with the Company immediately prior to the Change in
Control;
 
(B)             Any material diminution in the Executive’s base salary in effect
immediately prior to the Change in Control, which shall be a reduction in such
base salary of five (5%) percent or more unless a greater reduction is required
by Code Section 409A to constitute an “involuntary separation from service”;
 
(C)             A material required relocation of the Executive’s principal
place of employment which shall be a relocation of more than 50 miles from the
Executive’s place of employment prior to the Change in Control unless a
relocation of a greater distance is required by Code Section 409A to constitute
an “involuntary separation from service”; or
 
(D)            The Company’s breach of any provision in this Agreement.
 
(b)           The Executive who believes the Executive is entitled to a
Termination of Employment for Good Reason, as defined in Section 4 above, shall
provide written notice of the existence of the condition to the Company within
90 days after existence of the condition and shall provide the Company with a
period of at least 30 days in which to cure the condition and not be required to
pay the Good Reason severance.  The submission of such written notification by
the Executive shall not constitute “Cause” for the Company to terminate the
Executive as defined under Section 2(a) hereof.  If the Executive’s request for
a Good Reason Termination of Employment is denied under both the request and
appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then
the parties shall use their best efforts to resolve the claim within 90 days
after the claim is submitted to arbitration pursuant to Section 15(d).
 
(c)           Upon satisfaction of the requirements set forth in Sections 4 or
11(a) hereof and with respect to any one or more Changes in Control that may
occur during the term of this Agreement, upon the Executive’s execution of a
release (in the form attached hereto as Exhibit A) (the “Release”), the
Executive shall be entitled to (the “Change in Control Severance Benefits”):
 
 
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(i)           A cash severance benefit equal to one times the Executive’s
current annual base salary, as in effect at the time of the Change in Control;
 
(ii)          A prorated portion of the Executive’s target bonus for the year of
termination, based on the number of days worked in the year of termination;
 
(iii)         Subject to Section 6, continuation of Company-provided health
(including vision and dental, if provided by the Company immediately prior to
the Change in Control) and welfare benefits (including executive life insurance
coverage, if provided by the Company to the Executive immediately prior to the
Change in Control) for one year or, if earlier, the death of the Executive (the
“Change in Control Benefit Continuation Period”), in each case, at the same
level and on comparable terms as provided by the Company to the Executive
immediately prior to the Change in Control, with the Company paying any monthly
premiums otherwise required to be paid by the Executive to continue such
coverage.  Health benefits provided during the Change in Control Benefit
Continuation Period shall be provided in such a manner that the benefits
(including the associated costs and premiums) are excluded from the Executive’s
income for federal income tax purposes and, if the Company reasonably determines
that providing continued coverage under one or more of the health care benefit
plans maintained by the Company could cause the benefits to be taxable to the
Executive, the Company shall provide the benefits at the required level through
the reimbursement of the Executive for premiums for the purchase of individual
insurance coverage; provided, however, that the Company shall only be required
to reimburse premiums for such coverage to the extent the premiums do not exceed
the greater of (i) two times the annual premium paid by the Company for such
coverage at the date of termination or (ii) two times the amount of the COBRA
premium under the Company’s group health plan for coverage comparable to that
elected by the Executive, (A) at the time of the Change of Control or (B) at the
time of the required payment, whichever is greater.  Any continuation of group
health plan coverage under this paragraph shall run concurrently with the
period  of required COBRA continuation coverage under the Code.  Welfare
benefits (other than health benefits) shall be continued only to the extent
permitted under the terms of such plans;
 
(iv)         Continued coverage, during the six (6) years following the
Executive’s termination for his actions or omissions as an officer and, if
applicable, director of the Company prior to the date of termination of his
employment, under any directors and officers liability insurance policy
maintained by the Company (or, if the Company does not maintain such a policy,
by its affiliates) for its former directors and officers or, at the Company’s
election, for the current directors and officers.  If the Company or its
affiliates does not otherwise maintain such a policy, then the Company shall be
required to provide the Executive with such a policy, to the extent
available.  The policy dollar coverage limits of any such policy shall be not
less than the policy limit under any Company policy in place within the one (1)
year prior to the Executive’s termination of employment (the “Existing Policy”)
or, if less, the policy dollar coverage limit that can be purchased by the
Company for all of its current and former directors and officers at an annual
premium equal to two times the Company’s annual premium for the Existing Policy.
 
 
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(d)           Subject to Section 11(a) hereof, and the Code Section 409A
limitations set forth below, the Executive’s cash severance benefit under
Section 4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten
(10) days following the Executive’s Termination of Employment, as defined in
Section 4.  Any payment, including amounts suspended under Code Section 409A,
made later than 10 days following the Executive’s Termination of Employment (or
applicable due date under this Section 4 or Section 11(a) hereof) for whatever
reason, shall include interest at the Prime Rate plus two percent, which shall
begin accruing on the 10th day following the Executive’s Termination of
Employment (or applicable due date under this Section 4 or Section 11(a)
hereof).  Notwithstanding the foregoing, if at the time of Termination of
Employment the Executive constitutes a “Specified Employee”, as defined in Code
Section 409A, commencing at Termination of Employment, the Executive shall
receive the benefits that are exempt from Code Section 409A and shall receive
the non-exempt payments until attainment of any applicable Code Section 409A
cap, at which time the remaining non-exempt payments shall be suspended.  When a
period of six months has lapsed from the Executive’s Termination of Employment
or, if earlier, the death of the Executive, any suspended payments shall be
aggregated and paid in a lump sum, and the remaining compensation, if any, shall
be paid in accordance with its regular schedule.
 
(e)           Section 4 of this Agreement shall terminate upon the first of the
following events to occur:
 
(i)           Three years from the date hereof if a Change in Control has not
occurred within such three-year period;
 
(ii)          Termination of the Executive’s employment with the Company prior
to a Change in Control, provided, however, if there is a Change in Control
within six months after the termination of the Executive’s employment with the
Company, other than a termination due to the Executive’s death or Disability, an
involuntary termination by the Company for Cause or a termination of employment
by the Executive, then the Agreement shall not be deemed to have terminated and
the Executive shall be entitled to receive the Change in Control Severance
Benefits provided in Section 4, less any Regular Severance Benefits the
Executive has been paid under Section 3, in lieu of the severance benefits the
Executive is entitled to under Section 3;
 
(iii)         The expiration of two years following a Change in Control;
 
(iv)         Termination of the Executive’s employment with the Company
following a Change in Control due to the Executive’s death or Disability;
 
(v)          Termination of the Executive’s employment by the Company for Cause
following a Change in Control; or
 
(vi)         Termination of employment by the Executive for other than Good
Reason following the date of a Change in Control.
 
Unless Section 4 of this Agreement has first terminated under clauses (ii)
through (vi) hereof, commencing on the third anniversary of the date of this
Agreement, and on each one-year anniversary thereafter, Section 4 of this
Agreement shall be extended for one additional year, unless at least 180 days
prior to any such anniversary, the Company notifies the Executive in writing
that it shall not extend the term of Section 4 of this Agreement.
 
 
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5.           Golden Parachute Limit.  Payments under this Agreement, when
aggregated with any other “golden parachute” amounts (defined under Section 280G
of the Code) as compensation that becomes payable or accelerated due to a Change
in Control payable under this Agreement or any other plans, agreements or
policies of the Company, shall not exceed to the golden parachute cap under
Sections 280G and 4999 of the Code.
 
6.           No Mitigation or Duty to Seek Reemployment.  The Executive shall be
under no duty or obligation to seek or accept other employment after Termination
of Employment and shall not be required to mitigate the amount of any payments
provided for by this Agreement by seeking employment or otherwise.  The Regular
Severance Benefit and Change in Control Severance Benefits payments shall not be
reduced or suspended if the Executive accepts other employment, except that
Company is not required to continue any health or welfare benefit payments which
duplicate employee benefits and perquisites received in such other employment.
 
7.           Pro Rata Share of Bonus.  For purposes of this Agreement, a pro
rata share of any bonus or target bonus shall mean the total bonus or target
bonus payable multiplied by a fraction, the numerator of which is the number of
days in the applicable bonus period prior to the date of the Executive’s
Termination of Employment, Disability or death and the denominator of which is
the number of days in the bonus period.
 
8.           Stock Options.  The Executive’s rights with respect to any options
to purchase Company stock shall be governed by the terms of the agreements
pursuant to which such options were issued.
 
9.           Non-Competition and Restrictive Covenant.  If, during the term that
the Executive is receiving benefits under this Agreement, the Executive violates
the terms of this Agreement, the Release, the Proprietary Information and
Invention Agreement, or the Perceptron Executive Agreement Not to Compete or any
other non-competition agreement with the Company, the Company’s obligations to
the Executive under this Agreement shall automatically terminate.
 
10.         Tax Withholding.  The Company may withhold from any cash amounts
payable to the Executive under this Agreement to satisfy all applicable Federal,
State, local or other income (including excise) and employment withholding
taxes.  In the event the Company fails to withhold such sums for any reason, or
withholding is required for any non-cash payments provided in connection with
the Executive’s Termination of Employment, the Company may require the Executive
to promptly remit to the Company sufficient cash to satisfy all applicable
income and employment withholding taxes.
 
 
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11.         Binding Effect.
 

(a)           This Agreement shall be binding upon the successors and assigns of
the Company.  The Company shall take whatever actions are necessary to ensure
that any successor to its operations (whether by purchase, merger,
consolidation, sale of substantially all assets or otherwise) assumes the
obligations under this Agreement and shall cause such successor to evidence the
assumption of such obligations in an agreement satisfactory to the
Executive.  Notwithstanding any other provisions in this Agreement, if the
Company fails to obtain an agreement evidencing the assumption of the Company’s
obligations by any such successor, the Executive shall be entitled to immediate
payment of the severance compensation provided under Section 4, irrespective of
whether the Executive’s employment has then terminated.  For purposes of
implementing the foregoing, the date on which any succession becomes effective
shall be deemed to constitute the date of the Executive’s Termination of
Employment.  Notwithstanding the foregoing, if the succession does not
constitute a “Change of Control” as defined under Code Section 409A, the
compensation payments under Section 4 shall be suspended until the earlier of a
“Change of Control” as defined under Code Section 409A or the Executive incurs
an actual separation from service or, if later, at the end of any additional
suspensions as may be required under Section 4 if the Executive is a “Specified
Employee” at the time of separation from service, at which time any suspended
payments, with interest at the Prime Rate plus two percent, accruing from 10
days following the succession date, shall be paid in accordance with the terms
of Section 4.
 
(b)           This Agreement shall be binding upon the Executive and shall inure
to the benefit of and be enforceable by the Executive’s legal representatives
and heirs.  However, the rights of the Executive under this Agreement shall not
be assigned, transferred, pledged, hypothecated or otherwise encumbered, except
by operation of law.
 
12.         Amendment of Agreement.  This Agreement may not be modified or
amended except by instrument in writing signed by the parties hereto.  The
parties agree that this Agreement may be amended to comply with applicable law,
including, but not limited to, Code Section 409A.
 
13.         Validity.  The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall continue in full force and effect.
 
14.         Limitation on Rights.
 
(a)           This Agreement shall not be deemed to create a contract of
employment between the Company and the Executive and shall create no right in
the Executive to continue in the Company’s employment for any specific period of
time, or to create any other rights in the Executive or obligations on the part
of the Company, except as set forth herein.  This Agreement shall not restrict
the right of the Company to terminate the Executive, or restrict the right of
the Executive to terminate employment.
 
(b)           Subject to the exception for cash severance payments under the
Company’s documented severance policy referenced in Sections 3 and 4 above, this
Agreement shall not be construed to exclude the Executive from participation in
any other compensation or benefit programs in which the Executive is
specifically eligible to participate either prior to or following the execution
of this Agreement, or any such programs that generally are available to other
executive personnel of the Company, nor shall it affect the kind and amount of
other compensation to which the Executive is entitled.
 
 
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(c)           The rights of the Executive under this Agreement shall be solely
those of an unsecured general creditor of the Company.
 
15.         Claims Procedure.
 
(a)           The administrator for purposes of this Agreement shall be the
Company (“Administrator”), whose address is 47827 Halyard Drive, Plymouth,
Michigan 48170, and whose telephone number is (734) 414-6100.  The “Named
Fiduciary” as defined in Section 402(a)(2) of ERISA, also shall be the
Company.  The Company shall have the right to designate one or more Company
employees as the Administrator and the Named Fiduciary at any time, and to
change the address and telephone number of the same.  The Company shall give the
Executive written notice of any change in the Administrator and Named Fiduciary,
or in the address or telephone number of the same.
 
(b)           The Administrator shall make all determinations as to the right of
any person to receive benefits under the Agreement.  Any denial by the
Administrator of a claim for benefits by the Executive (the ‘Claimant”) shall be
stated in writing by the Administrator and delivered or mailed to the Claimant
within 10 days after receipt of the claim, unless special circumstances require
an extension of time for processing the claim.  If such an extension is
required, written notice of the extension shall be furnished to the Claimant
prior to the termination of the initial 10-day period.  In no event shall such
extension exceed a period of 10 days from the end of the initial period.  Any
notice of denial shall set forth the specific reasons for the denial, specific
reference to pertinent provisions of this Agreement upon which the denial is
based, a description of any additional material or information necessary for the
Claimant to perfect the claim, with an explanation of why such material or
information is necessary, and any explanation of claim review procedures,
written to the best of the Administrator’s ability in a manner that may be
understood without legal or actuarial counsel.
 
(c)           A Claimant whose claim for benefits has been wholly or partially
denied by the Administrator may request, within 60 days following the date of
such denial, in a writing addressed to the Administrator, a review of such
denial.  The Claimant shall be entitled to submit such issues or comments in
writing or otherwise, as the Claimant shall consider relevant to a determination
of the claim, and the Claimant may include a request for a hearing in person
before the Administrator.  Prior to submitting the request, the Claimant shall
be entitled to review such documents as are pertinent to the claim.  The
Claimant may, at all stages of review, be represented by counsel, legal or
otherwise, of the Claimant’s choice.  All requests for review shall be promptly
resolved.  The Administrator’s decision with respect to any such review shall be
set forth in writing and shall be mailed to the Claimant not later than 10 days
following receipt by the Administrator of the Claimant’s request unless special
circumstances, such as the need to hold a hearing, require an extension of time
for processing, in which case the Administrator’s decision shall be so mailed
not later than 20 days after receipt of such request.
 
 
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(d)           A Claimant who has followed the procedure in paragraphs (b) and
(c) of this Section, but who has not obtained full relief on the claim for
benefits, may, within 60 days following the Claimant’s receipt of the
Administrator’s written decision on review, apply in writing to the
Administrator for binding arbitration of the claim before an arbitrator mutually
acceptable to both parties, the arbitration to be held in Plymouth, Michigan, in
accordance with the arbitration rules of the American Arbitration Association,
Commercial Disputes Resolution Procedures, as then in effect.  If the parties
are unable to mutually agree upon an arbitrator, then the arbitration
proceedings shall be held before three arbitrators, one of which shall be
designated by the Company, one of which shall be designated by the Claimant and
the third of which shall be designated mutually by the first two arbitrators in
accordance with the arbitration rules referenced above.  The arbitrator(s) sole
authority shall be to interpret and apply the provisions of this Agreement; the
arbitrator(s) shall not change, add to, or subtract from, any of  the
Agreement’s provisions.  The arbitrator(s) shall have the power to compel
attendance of witnesses at the hearing.  Any court having jurisdiction may enter
a judgment based upon such arbitration.  All decisions of the arbitrator(s)
shall be final and binding on the Claimant and the Company without appeal to any
court.  The Executive and the Company hereby acknowledge that as arbitration is
the exclusive remedy with respect to any grievance hereunder, neither party has
the right to resort to any federal, state or local court or administrative
agency concerning breaches of this Agreement, and the decision of the arbitrator
shall be a complete defense to any suit, action or proceeding instituted in any
federal, state or local court or before any administrative agency with respect
to any dispute which is arbitrable as herein set forth.
 
16.         Legal Fees and Expenses.
 
(a)           Except as otherwise provided in Section 16(b), in the event any
arbitration or litigation is brought to enforce any provision of this Agreement
and the Executive prevails, then the Executive shall be entitled to recover from
the Company the Executive’s reasonable costs and reasonable expenses of such
arbitration or litigation, including reasonable fees and disbursements of
counsel (both at trial and in appellate proceedings), (“Expenses”).  Except as
otherwise provided in Section 16(b), if the Company prevails, then each party
shall be responsible for its/his respective costs, expenses and attorneys fees,
and the costs of the arbitrator shall be equally divided.
 
(b)           Except to the extent prohibited by applicable law, in the event
any arbitration or litigation is brought to enforce any provision of Section 4
of this Agreement, the Company shall advance to the Executive one half of the
amount of the Executive’s Expenses and shall pay the costs of the
arbitrator.  The Executive shall be obligated to repay such advances to the
Company only if the Company prevails in the arbitration or litigation.
 
(c)           In the event that it is determined that the Executive is entitled
to compensation, legal fees and expenses hereunder, the Executive also shall be
entitled to interest thereon, from the date payment thereof was due, payable to
the Executive at the Prime Rate of interest plus two percent.
 
(d)           For purposes of this Section 16, “prevails” means that the
Executive receives an award of severance benefits in such arbitration or
litigation in excess of the amount offered to be paid by the Company to the
Executive prior to the initiation of the arbitration or litigation.  For
purposes of determining the date when legal fees and expenses are payable, such
amounts are not due until 30 days after notification to the Company of such
amounts.
 
 
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(e)           Notwithstanding the foregoing, to the extent that the payment by
the Company of the Executive’s Expenses more than two calendar years following
the calendar year of the Termination of Employment (the “Outside Date”) would
cause the payments under this Agreement to not be exempt from Code Section 409A,
no such payments after the Outside Date shall be payable hereunder.
 
17.         Nonalienation of Benefits.  Except in so far as this provision may
be contrary to applicable law, no sale, transfer, alienation, assignment,
pledge, collateralization or attachment of any benefits under this Agreement
shall be valid or recognized by the Company.
 
18.         ERISA.  This Agreement is an unfunded compensation arrangement for a
member of a select group of the Company’s management and any exemptions under
ERISA, as applicable to such an arrangement, shall be applicable to this
Agreement.
 
19.         Reporting and Disclosure.  The Company, from time to time, shall
provide government agencies with such reports concerning this Agreement as may
be required by law, and the Company shall provide the Executive with such
disclosure concerning this Agreement as may be required by law or as the Company
may deem appropriate.
 
20.         Notices.  Any notice required or permitted by this Agreement shall
be in writing, sent by registered or certified mail, return receipt requested,
addressed to the Board and the Company at the Company’s then principal office,
or to the Executive at the Executive’s last address on file with the Company, as
the case may be, or to such other address or addresses as any party hereto may
from time to time specify in writing for the purpose of this Agreement in a
notice given to the other parties in compliance with this section.  Notices
shall be deemed given when received.
 
21.         Miscellaneous/Severability.  A waiver of the breach of any term or
condition of this Agreement shall not be deemed to constitute a waiver of any
subsequent breach of the same or any other term or condition.  This Agreement is
intended to be performed in accordance with, and only to the extent permitted
by, all applicable laws, ordinances, rules and regulations.  To the extent that
any provision or benefit under this Agreement is not deemed to be in accordance
with any applicable law, ordinance, rule or regulation, the noncomplying
provision shall be construed, or benefit limited, to the extent necessary to
comply with all applicable laws, ordinances and regulations and any such
provision or benefit shall not affect the validity of any other provision or
benefit provided by this Agreement.  The headings in this Agreement are inserted
for convenience of reference only and shall not be a part of or control or
affect the meaning of any provision hereof.
 
22.         Governing Law.  To the extent not preempted by Federal law, this
Agreement shall be governed and construed in accordance with the laws of the
State of Michigan, without regard to its conflicts of law rules.
 
23.         Entire Agreement.  This document represents the entire agreement and
understanding of the parties with respect to the subject matter of the Agreement
(other than the Perceptron Executive Agreement Not to Compete dated November 4,
2009 (“Perceptron Executive Agreement Not to Compete”) and the Proprietary
Information and Invention Agreement which shall remain in full force and effect
after the execution of this Agreement) and it may not be altered or amended
except by an agreement in writing that is executed by both parties to this
Agreement.  Specifically, this Agreement supersedes any other severance pay
provisions in effect on the date of this Agreement.
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
 

 
PERCEPTRON, INC.
     
By:
/s/ Harry T. Rittenour
   
Harry T. Rittenour, President and
   
Chief Executive Officer
         
/s/ Richard Price
   
Richard Price

 
 
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EXHIBIT A
RELEASE AGREEMENT
 
THIS AGREEMENT (“Agreement”) is made by and between _____________________
(“Employee”) and Perceptron, Inc. (the “Company”).
 
RECITALS
 
A.          Employee has terminated employment with the Company, effective
__________, ____.
 
B.           Employee has been given the opportunity to review this Agreement,
to consult with legal counsel, and to ascertain his rights and remedies.
 
C.           Employee and Company, without any admission of liability, desire to
settle with finality, compromise, dispose of, and release any and all claims and
demands asserted or which could be asserted arising out of Employee’s employment
at and separation from Company.
 
In consideration of the foregoing and of the promises and mutual covenants
contained herein, it is hereby agreed between Employee and Company as follows:
 
AGREEMENT
 
1.           In exchange for the good and valuable consideration set forth in
that certain Agreement, made as of ______________, between the Company and
Employee (the “Severance Agreement”), Employee hereby releases, waives and
discharges any and all manner of action, causes of action, claims, rights,
charges, suits, damages, debts, demands, obligations, attorneys fees, and any
and all other liabilities or claims of whatsoever nature, whether in law or in
equity, known or unknown, including, but not limited to, age discrimination
under the Age Discrimination in Employment Act of 1967 (as amended), employment
discrimination prohibited by other federal, state or local laws, and any other
claims, which Employee has claimed or may claim or could claim in any local,
state or federal or other forum, against Company, its directors, officers,
employees, agents, attorneys, successors and assigns as a result of or relating
to Employee’s employment at and separation from Company and as an officer of
Company as a result of any acts or omissions by Company or any of its directors,
officers, employees, agents, attorneys, successors or assigns (“Covered Acts or
Omissions”) which occurred prior to the date of this Agreement; excluding only
those for indemnification under the Company’s articles of incorporation, bylaws
or applicable law by reason of his service as an officer or director of the
Company and those arising under the Severance Agreement between the Parties
dated _______________.
 
2.           Employee agrees to immediately return to Company all property,
assets, manuals, materials, information, notes, reports, agreements, memoranda,
customer lists, formulae, data, know-how, inventions, trade secrets, processes,
techniques, and all other assets, materials and information of any kind or
nature, belonging or pertaining to Company (“Company Information and Property”),
including, but not limited to, computer programs and diskettes or other media
for electronic storage of information containing Company Information and
Property, in Employee’s possession, and Employee shall not retain copies of any
such Company Information and Property.  Employee further agrees that from and
after the date hereof he will not remove from Company’s offices any Company
Information and Property, nor retain possession or copies of any Company
Information and Property.
 

 
 

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3.           Employee agrees that he shall never make any statement that
negatively affects the goodwill or good reputation of the Company, or any
officer or director of Company, except as required by law, and except that such
statements may be made to members of the Board of Directors of the Company.
 
4.           Employee covenants and agrees that he shall never commence or
prosecute, or knowingly encourage, promote, assist or participate in any way,
except as required by law, in the commencement or prosecution, of any claim,
demand, action, cause of action or suit of any nature whatsoever against Company
or any officer, director, employee or agent of Company (“Covered Litigation”)
that is based upon any claim, demand, action, cause of action or suit released
pursuant to this Agreement or involving or based upon the Covered Acts and
Omissions.
 
5.           Employee further agrees that he has read this Agreement carefully
and understands all of its terms.
 
6.           Employee understands and agrees that he was advised to consult with
an attorney and did so prior to executing this Agreement.
 
7.           Employee understands and agrees that he has been given twenty-one
(21) days within which to consider this Agreement.
 
8.           Employee understands and agrees that he may revoke this Agreement
for a period of seven (7) calendar days following the execution of this
Agreement (the “Revocation Period”) and any payments or agreements conditioned
upon his signing this Agreement shall not be paid until the Revocation Period
expires and such payments shall not be required to be paid and such agreements
shall be deemed revoked if this Agreement is revoked.  This Agreement is not
effective until this revocation period has expired.  Employee understands that
any revocation, to be effective, must be in writing and either (a) postmarked
within seven (7) days of execution of this Agreement and addressed to
Perceptron, Inc., 47827 Halyard Drive, Plymouth, Michigan  48170 or (b) hand
delivered within seven (7) days of execution of this Agreement to Perceptron,
Inc., 47827 Halyard Drive, Plymouth, Michigan  48170.  Employee understands that
if revocation is made by mail, mailing by certified mail, return receipt
requested, is recommended to show proof of mailing.
 
9.           In agreeing to sign this Agreement and separate from Company,
Employee is doing so completely voluntarily and of his own free-will and without
any encouragement or pressure from Company and agrees that in doing so he has
not relied on any oral statements or explanations made by Company or its
representatives.
 
10.         Both parties agree not to disclose the terms of this Agreement to
any third party, except as is required by law, or as is necessary for purposes
of securing counsel from either parties’ attorneys or accountants.

 
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11.         This Agreement shall not be construed as an admission of wrongdoing
by Company.
 
12.         This Agreement contains the entire agreement between Employee and
Company regarding the matters set forth herein.  Any modification of this
Agreement must be made in writing and signed by Employee and each of the
entities constituting the Company.
 
13.         This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Michigan, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Michigan or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Michigan.
 
14.         In the event any provision of this Agreement or portion thereof is
found to be wholly or partially invalid, illegal or unenforceable in any
judicial proceeding, then such provision shall be deemed to be modified or
restricted to the extent and in the manner necessary to render the same valid
and enforceable, or shall be deemed excised from this Agreement, as the case may
require, and this Agreement shall be construed and enforced to the maximum
extent permitted by law, as if such provision had been originally incorporated
herein as so modified or restricted, or as if such provision had not been
originally incorporated herein, as the case may be.
 
15.         If there is a breach or threatened breach of the provisions of this
Agreement, Company may, in addition to other available rights and remedies,
apply to any court of competent jurisdiction for specific performance and/or
injunctive relief in order to enforce, or prevent any violation of, any of the
provisions of this Agreement.
 
The parties hereto have entered into this Agreement as of this ____ day of
_____, ______.
 

 
PERCEPTRON, INC.
     
By:
         
Name:
         
Title:
       
EMPLOYEE
       

 

 
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