Exhibit 10.1

 

AGREEMENT

 

RICHARDSON ELECTRONICS, LTD., whose principal office is located at 40W267
Keslinger Road, PO Box 393, LaFox, Illinois 60147-0393 (together with its
subsidiaries, the "Company"), and BRUCE W. JOHNSON of 5838 Teal Lane, Long
Grove, Illinois 60047 (the "Employee").

 

WHEREAS, the Employee has been an executive officer of the Company for several
years and employed pursuant to a certain Employment and Bonus Agreement dated as
of November 7, 1996 (the “Original Employment Contract”); and

 

WHEREAS, the parties agree that Employee is retiring from employment with the
Company as an executive officer, and his employment with the Company as an
executive officer, particularly as President and Chief Operating Officer, is to
be terminated and the Employee will be continue to be employed as a non-officer
employee of the Company for the period of time herein specified and that the
payments provided herein shall be in lieu of any payments under the Original
Employment Contract and any Company policy relating to termination of Employee’s
employment as an executive officer and eventually as an employee at the
expiration of employment term provided in paragraph 3 below and shall be to
resolve and settle all possible claims the Employee may have against or with
respect to the Company;

 

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

 

1.            The Company and the Employee agree that the Employee's employment
with the Company as an executive officer will cease on the close of business
January 19, 2006 and any other officer position with the Company, including with
its subsidiaries, direct or indirect, will cease and terminate on the close of
business on June 2, 2006 (the "Officer Termination Date") and Employee hereby
resigns as President and Chief Operating Officer effective at the close of
business January 19, 2006, and from all director and officer positions with any
subsidiary, direct or indirect, of the Company, in each case effective as of the
Officer Termination Date. In addition, Employee shall have the title of
“President, Emeritus” until the Officer Termination Date; provided that, by such
title Em ployee shall not be considered an executive officer of the Company or
an officer for purposes of Section 16 of the Securities Exchange Act of 1934.
Further Employee shall remain as a Director of the Company for the term for
which elected by the shareholders of the Company.

 

2.            Employee shall be entitled to payment of his compensation and
benefits, including bonus, as presently being paid through the Officer
Termination Date; provided that, except to the extent precluded by Section 8,
Employee shall receive no less than $26,875 in bonus per fiscal quarter.

 

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3.            The parties agree that after the Officer Termination Date,
Employee will continue to be employed with the Company as a non-officer to work
on such matters as may be directly requested by, and under the direct
supervision of, Edward J. Richardson through the period from the Officer
Termination Date until June 2, 2007 (the “Final Termination Date”.) All
employment of Employee shall cease on the Final Termination Date. Such requested
work shall take into consideration the Employee's health, residence, and
personal circumstances, including, without limitation, other employment in which
he may be engaged. Employee shall not be required to report to any office to
perform his work unless specifically requested by Edward J. Richardson and,
except by mutual agreement, shall not be required to perform such work at a
location other than (a) the Company’s LaFox, Illinois location, or (b) another
location so long as that location is not beyond 5 miles of any of his then
residences. Employee’s unavailability for work as provided in this paragraph 3
due to health or other reasons shall not terminate the Company’s obligation to
make the payments provided for in paragraph 4 below.

 

4.            In consideration of Employee’s service with the Company as an
executive officer and his other promises and agreements made in this Agreement
and in full settlement of any and all claims that the Employee may have against
the Company, its successors, assigns, affiliates, or any of its officers,
directors, shareholders, employees, agents or representatives, for compensation
or otherwise in connection with his past employment or termination of his
employment, the Company agrees to provide the Employee with the following in
addition to the compensation referred to in paragraph 2. above:

 

 

(a)

$16,538.47 every other Friday for 12 months beginning June 4, 2006 through June
1, 2007, payable in arrears every other Friday with the first payment being on
June 16, 2006 and continuing through June 15, 2007, the first and last payments
being for one half of the above stated amount, provided, however, that the
Employee’s right to receive and the Company’s obligation to make such payment
shall cease in the event of Employee’s breach of paragraphs 8, 11, 12 or 13
below

 

 

(b)

For each fiscal quarter of the Company after the Officer Termination Date to the
Final Termination Date, an amount equal to the greater of $26,875 or the amount
of bonus that Employee would have received for such period calculated in the
manner previously calculated for fiscal year 2006, to be paid within 60 days
after the end of each fiscal quarter; provided, however, that the Employee’s
right to receive and the Company’s obligation to make such payment shall cease
in the event of Employee’s breach of paragraphs 8, 11, 12 or 13 below;

 

5.            The parties agree that until the Final Termination Date, Employee
shall be entitled to participate in and receive other employee benefits of
medical, dental, life, accidental death and dismemberment and disability
insurance, profit sharing on the same terms as other employees, but shall not be
entitled to participate in or receive car allowance, vacation or bonus benefits
for the period following the Officer Termination Date, and Employee hereby
waives all rights to such benefits. Should Employee at anytime be deemed
entitled to any such benefits by law, rule or regulation Employee shall pay to
or reimburse the Company for the entire cost and expense of or related to such

 

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benefits. Notwithstanding the foregoing Options previously granted to Employee
under the Company’s various stock option or incentive compensation plans shall
continue to be exercisable or become exercisable in accordance with the terms
thereof through the Final Termination Date, on which date all unvested Options
shall vest and on September 1, 2007 Employee’s right to exercise any vested
options not previously exercised shall terminate and be cancelled.

 

6.            If title to the automobile purchased for Employee by the Company
has not been previously transferred to Employee, it shall be transferred to him
on June 2, 2006.

 

7.            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 paragraph 2 during such period of disability, injury or sickness, but
shall not reduce the amounts to be paid under paragraph 4.

 

8.            The payments provided for in paragraphs 2 and 4 above shall be
payable if and when but not unless, the Employee shall without additional
compensation, fee, or other payment by the Company;

 

(a) Refrain (independently of and without reference to paragraph 13 hereof),
after the expiration of a period of thirty (30) days from the mailing to him of
written notice by the Secretary of the Company of a direction to do so, from
engaging in the operation or management of a business, whether as owner,
shareholder, partner, officer, employee or otherwise, which then shall be one in
which the Employee could not engage without being in violation of his
obligations not to compete as provided in paragraph 13 hereof;

 

(b) Refrain (independently of and without reference to paragraph 12 hereof) from
disclosing to unauthorized persons information relative to the business,
properties, products, technology or other assets of the Company or any of its
subsidiaries which he shall have reason to believe is confidential; and

 

(c) Refrain (independently of and without reference to paragraph 11 hereof) from
otherwise acting or conducting himself in a manner which he shall have reason to
believe is inimical or contrary to the best interests of the Company.

 

In the event that the Employee shall fail to comply with any provision of this
paragraph 8, the Company's obligation to make any further payment provided for
in paragraph 2 or 4 above shall forthwith terminate and cease.

 

9.            The consideration from the Company set forth above constitutes
full settlement of

 

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any and all claims that the Employee may have against the Company, its
successors, assigns, affiliates, or any of its officers, directors,
shareholders, employees, agents or representatives, under the Original
Employment Contract or for compensation or otherwise in connection with
termination of his employment, except for any and all claims arising out of the
performance by the Company of this Agreement, including, but not limited to,
rights under the Company’s profit sharing and employee stock ownership plans.

 

10.          In further consideration for the promises made by the Company
herein, the Employee, on behalf of himself, his agents, assignees, attorneys,
heirs, executors, and administrators, fully releases the Company, and its
successors, assigns, parents, subsidiaries, divisions, affiliates, officers,
directors, shareholders, employees, agents and representatives, from any and all
liability, claims, demands, actions, causes of action, suits, grievances, debts,
sums of money, controversies, agreements, promises, damages, back and front pay,
costs, expenses, attorneys' fees, and remedies of any type, by reason of any
matter, act or omission arising out of or in connection with the Employee's
employment with or termination by the Company, including but not limited to
claims, demands or actions under the Original Employment Contract, Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans With Disabilities Act, the Civil Rights Act of 1986, the Illinois
Human Rights Act, any other federal, state or local statute or regulation
regarding employment, discrimination in employment, or the termination of
employment, and the common law of any state relating to employment contracts,
public policy torts, wrongful discharge, or any other matter, including, without
limitation, claims, demands or actions under the False Claims Act or any qui tam
rights, except, however, any and all claims arising out of the performance by
the Company of this Agreement (the "Released Claims").

 

11.         Employee agrees that he will at no time engage in conduct which
injures, harms, destroys, corrupts, demeans, defames, libels, slanders, destroys
or diminishes in any way the reputation or goodwill of the Company, its
subsidiaries, or their respective shareholders, directors, officers, employees,
or agents or the products sold by the Company, or its other properties or
assets. Nor will Employee cause any computer bugs to the Company’s computer
system, database or software. Employee agrees to cooperate with and assist the
Company, including, without limit executing requested documents, with respect to
any matters or things that relate to the matters on which he worked or for which
he was responsible, including, without limit, the financial statements and
records of the Company for the period of his employment with the Company.

 

12.         The Employee shall not (except in the proper course of his duties to
the Company) either during the period of his employment with the Company or
thereafter make use of, disseminate or divulge to any person, firm, company,
association or other entity, and shall use his best endeavors to prevent the
use, dissemination, publication or disclosure of, any information, knowledge or
data disclosed to Employee or known by Employee as a consequence of or through
his employment or relationship with the Company or any of its predecessors or
subsidiaries (including information, knowledge or data conceived, originated,
discovered or developed by Employee) not generally known in the business of
manufacturing or distributing electron tubes,

 

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closed circuit television products, semiconductors, or display products, whether
patentable or not, about the Company's or its predecessors' or subsidiaries'
businesses, products, processes and services, including without limitation
information relating to financial matters, manufacturing, purchasing, sales,
research, development, methods, policies, procedures, technology, techniques,
processes, know-how, designs, drawings, specifications, systems, practices,
merchandising, suppliers or customers, including, without limitation, customer
lists, information or data. It is not intended to limit or restrict Employee's
right to utilize information, ideas, concepts or structures of a general nature
so long as they are not used in a business competitive with that of the Company.
The failure to mark any of the information confidential or proprietary shall not
affect its status as such under this Agreement.

 

13.         Employee agrees that he will not, during the term of employment with
Employer and for a period until the later of one (1) year after the termination
of such employment or one (1) year after the Final Termination Date, directly or
indirectly (whether or not for compensation or profit):

 

(a)          Engage in any business or enterprise the nature of any part of
which is competitive with any part of that of the Employer (a "Prohibited
Business"); or

 

(b)          Participate as an officer, director, creditor, promoter,
proprietor, associate, agent, employee, partner, consultant, sales
representative or otherwise, or promote or assist, financially or otherwise, or
directly or indirectly own any interest in any person or entity involved in any
Prohibited Business; or

 

(c)          Canvas, call upon, solicit, entice, persuade, induce, respond to,
or otherwise deal with, directly or indirectly, any individual or entity which,
during Employee's term of employment with the Employer, was or is a customer or
supplier, or proposed customer or supplier, of the Employer, for any of the
following purposes:

 

(a)          to purchase (with respect to customers) or to sell (with respect to
suppliers) products of the types or kinds sold by the Employer or which could be
substituted for (including, but not limited to, rebuilt products), or which
serve the same purpose or function as, products sold by the Employer (all of
which products are herein sometimes referred to, jointly and severally, as
"Prohibited Products"), or

 

(b)          to request or advise any such customer or supplier to withdraw,
curtail or cancel its business with the Employer; or

 

(d)          For himself or for or through any other individual or entity call
upon, solicit, entice, persuade, induce or offer any individual who, during
Employee’s term of employment with the Employer, was an employee or sales
representative or distributor of the Employer, employment by, or representation
as sales agent or distributor for, any one other than the

 

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Employer, or request or advise any such employee or sales agent or distributor
to cease employment with or representation of the Employer, and Employee shall
not approach, respond to, or otherwise deal with any such employee or sales
representative or distributor of Employer for any such purpose, or authorize or
knowingly cooperate with the taking of any such actions by any other individual
or entity.

 

Each obligation of each subparagraph and provision of this paragraph 13 shall be
independent of any obligation under any other subparagraph or provision hereof
or thereof.

 

Nothing in this paragraph 13, however, shall prohibit Employee from owning
(directly or indirectly through a parent, spouse, child or other relative or
person living in the same household with Employee or any of the foregoing), as a
passive investment, up to 1% of the issued and outstanding shares of any class
of stock of any publicly traded company.

 

14.          All notes, data, reference materials, memoranda, files and records,
including without limitation computer reports, products lists and information,
process manuals and notes, drawings, and technology manuals and notes, customer
or supplier lists, data or information, in any way relating to any of the
Company's or its predecessors' or subsidiaries' businesses, operations or
products shall belong exclusively to Company, and Employee agrees to turn over
to Company all copies of such materials and all keys, equipment and other
Company property in his possession or control at the request of Company or, in
the absence of such a request, upon the termination of Employee's employment
with Company. Upon the execution hereof, Employee shall immediately refrain from
seeking access to or utilization of Company's (a) telephonic voice mail, E-mail
or message system, (b) computerized order entry system, and (c) computer data
bases and software, except to use the modem/network e-mail connection to those
outside the Company as specifically authorized by the Chairman of the Board of
the Company.

 

15.          In the event of a breach or threatened breach by the Employee of
the provisions of paragraphs 11, 12, or 13, the Company shall be entitled to an
injunction restraining the Employee from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to the Company for such breach or threatened breach. The parties hereto desire
that paragraphs 11, 12, and 13 shall be fully enforceable in accordance with the
terms 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 11, 12, or 13
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.

 

16.         Employee’s death shall not terminate the Company’s obligation to pay
the amounts it would otherwise be obligated to pay Employee under paragraphs 2
or 4. In the event of Employee’s death prior to payment of all amounts due under
paragraphs 2 and 4, such amounts thereafter shall be paid to Employee’s estate
or, if Employee has provided Company with written direction prior to his death
of an alternative beneficiary, to the beneficiary so designated by Employee in
such written

 

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direction. Such payments shall be made on the dates and to the extent paragraphs
2 or 4, as the case may be, would require them to be made to Employee if he were
still alive. In the event the Company, at its expense, purchases reducing term
life insurance for the Employee that would cover the amount of its obligation to
continue payments in the event of Employee’s death as provided above in this
paragraph, then the Company shall not be obligated to continue payments in the
event of Employee’s death and all payments hereunder would cease upon Employee’s
death.

 

17.         The Employee understands and agrees that the existence and terms of
this Agreement are confidential and shall not be disclosed to any third party
(other than his spouse, attorney or tax preparer or financial consultant, each
of whom shall agree to maintain its confidentiality) without the prior written
consent of the Company, except as may be required by law and in response to a
lawful subpoena in which event Employee shall provide prompt notice to the
Company.

 

18.         The existence and execution of this Agreement shall not be
considered, and shall not be admissible in any proceeding, as an admission by
the Employee or the Company, or any of its agents or employees, of any
liability, error, violation or omission.

 

 

19.

It is agreed that:

 

 

(a)

This Agreement shall be binding upon the parties hereto, their heirs, legal
representatives, successors and assigns and shall inure to their respective
benefits.

 

 

(b)

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 11,
12, or 13 are held to be in any respect unreasonable restrictions upon Employee,
then the court so holding shall reduce the territory to which it pertains and/or
the period of time in which it operates or effect any other change to the extent
necessary to render any of said terms, provisions or restrictions enforceable.

 

 

(c)

The failure by the Company to insist upon strict compliance by the Employee with
respect to any of the terms or conditions hereof shall not be deemed a waiver or
relinquishment of any other terms or conditions nor shall any failure to
exercise any right or power hereunder at one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.

 

 

(d)

This Agreement shall be governed and construed in accordance with the laws of
the State of Illinois.

 

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(e)

All notices required to be given hereunder to the Company shall be addressed to
its principal executive office at 40W267 Keslinger Road, PO Box 393, LaFox,
Illinois 60147; attention: Legal Department, by certified or registered mail.
All notices required or to be given hereunder to the Employee shall be addressed
to the Employee at his residence as last reflected on the records of the
Company, by certified or registered mail or courier delivery, with signature
required for delivery. Notice shall be deemed given if delivered in person to
Edward J. Richardson on behalf of the Company or to the Employee, or if mailed,
when deposited in the United States Mail addressed as aforesaid.

 

20.         The Employee acknowledges that Employee had an adequate opportunity
to review this Agreement and to review it with counsel of his choice, that
Employee fully understands its terms, that Employee was not coerced into signing
it, and that Employee has signed it knowingly and voluntarily.

 

21.         The Company may terminate its obligations under paragraphs 2 and 4
of this Agreement if Employee, at any time during his employment with the
Company, including prior to the date of this Agreement, (a) engaged in an act or
acts (i) of personal dishonesty taken by the Employee and intended to result in
personal enrichment of the Employee, (ii) that were fraudulent, malpractice or
material violations by the Employee of the Employee's obligations or duties to
the Company, or (iii) a material violation of law, regulations, rules or
standard accounting practices, or (b) failed to take action that would avoid (i)
fraud, malpractice or material violations of Employee’s obligations or duties to
the Company, or (ii) ) a material violation of law, regulations, rules or
standard accounting practices.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day
and year written below their respective signatures.

 

EMPLOYEE

RICHARDSON ELECTRONICS, LTD.

 

 

        /s/ Bruce W. Johnson            

By:        /s/ Edward J. Richardson          

Bruce W. Johnson

Edward J. Richardson,

 

 

Chairman of the Board

 

 

Dated:  

     1/20/06       

Dated:   

     1/20/06       

Subscribed and sworn to

before me this      20    day

of January, 2006

        /s/ David J. Gilmartin      

Notary Public

 

[NOTARY SEAL]

 

 

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