**EXHIBIT 10.2**

FORM OF DIRECTORNON-COMPETE/NON-DISCLOSURE AGREEMENT

THISNON-COMPETE/NON-DISCLOSURE AGREEMENT (this “Agreement”), is made this _____ dayof __________, ______, by and between Torotel, Inc., a Missouri corporation(the “Company”) and _______________________ (the “Director”), an individualresiding at   _____________________________.

WHEREAS, theparties hereto recognize and agree that the services of the Director arespecial and unique, that s/he has knowledge of and access to the Company’s tradesecrets, business plans and most sensitive confidential matters, and that s/hehas special fiduciary duties to the Company as an officer and/or director;

WHEREAS, for theforegoing reasons, covenants on the part of the Director not to compete with theCompany, have any conflicts of interest, or to disclose confidential andproprietary information of the Company during his/her service as a director andfor a reasonable period after the termination or expiration of his/her serviceas a director is essential to protect the business of the Company;

NOW, THEREFORE, itis hereby agreed by the Company and the Director as follows:

1.    NON-COMPETE. During the period of time that the Director serves as a director of theCompany and for a period of two (2) years after the termination or cessation ofsuch employment and/or service as a director, for any reason (both periods oftime, taken together, being referred to hereinafter as the “Restricted Period”),the Director shall not, anywhere in the United States, directly or indirectly,whether individually or as an officer, director, employee, consultant, partner,stockholder (other than as the holder of not more than one percent (1%) of apublicly held corporation), individual proprietor, joint venturer, investor, lender,consultant or in any other capacity whatsoever, develop, design, produce,market, sell or render (or assist any other person in developing, designing,producing, marketing, selling or rendering) products or services competitivewith those developed, designed, produced, marketed, sold or rendered by theCompany at any time during the Restricted Period.

2.    NON-SOLICITATION.  During the Restricted Period, the Directorshall not, directly or indirectly, whether individually or as an officer,director, employee, consultant, partner, stockholder, individual proprietor,joint venturer, investor, lender, consultant or any other capacitywhatsoever:  (a) solicit, divert or takeaway, or attempt to solicit, divert or take away, the business or patronage ofany clients, customers or accounts, or prospective clients, customers oraccounts, of the Company; or (b) hire, retain (including as a consultant) orencourage to leave the employment of the Company any employee of the Company,or hire or retain (including as a consultant) any former employee of theCompany who has left the employment of the Company within one (1) year prior tosuch hiring or retention.

3.    NON-DISCLOSURE.  The Director agrees, at all times during theRestricted Period and thereafter to hold in strictest confidence, and not touse, except for the benefit of the Company, or to disclose to any person, firm,corporation or other entity, without written authorization from the Company,any trade secrets, confidential knowledge, data or other proprietaryinformation of the Company.  By way ofillustration 

 

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and not limitation, such shall include informationrelating to products, processes, know-how, designs, formulas, methods,developmental or experimental work, improvements, discoveries, plans for research,new products, marketing and selling, business plans, budgets and unpublishedfinancial statements, licenses, prices and costs, suppliers and customers ofthe Company.

4.    ACKNOWLEDGEMENT.   The Director agreesand acknowledges that his non-competition, non-solicitation and non-disclosureobligations hereunder are essential to the protection of the Company’s businessas a consequence of the Director’s position with the Company and are reasonablefor such purpose.

5.    EQUITABLE REMEDIES.   The parties heretohereby agree that breaches of covenants and obligations undertaken in thisAgreement are likely to cause the Company substantial and irrevocable damage,which would be difficult, if not impossible, to prove precisely; therefore, itis agreed that this Agreement shall be enforceable by specific performance orother injunctive relief.  If any of therestrictions contained herein are deemed to be unenforceable by reason of theextent, duration or geographical scope or other provisions hereof, then theparties hereto contemplate and agree that a court shall reduce such extent,duration, geographical scope or other provision hereof and enforce the termshereof in reduced form for all purposes in the manner contemplated hereby.

6.    MISCELLANEOUS.   The Director acknowledgesthat this Agreement does not constitute a contract of employment and does notimply that the Company will continue his service as a director for any periodof time.  This Agreement may be executedin multiple counterparts, each of which shall be deemed an original, but all ofwhich together shall constitute one and the same instrument.  The rights and obligations of the Companyshall inure to the benefit of, and shall be binding upon, its successors andassigns.  The Director acknowledges thatthe services to be rendered by him are unique and personal and cannot and shallnot be assigned.  This Agreement and theperformance hereof shall be construed and governed in accordance with the lawsof the State of Missouri.

IN WITNESSWHEREOF, and intending to be legally bound hereby, the parties have caused thisNon-Compete/Non-Disclosure Agreement to be duly executed as an instrument underseal as of the date and year first written above.
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| TOROTEL, INC. |   |
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