Document:

Richardson Electronics, Ltd. Form 8-K Exhibit 10.46

Exhibit 10.46

EMPLOYMENT,
NONDISCLOSURE AND NON-COMPETE AGREEMENT 

        EMPLOYMENT,
NONDISCLOSURE AND NON-COMPETE AGREEMENT (“Agreement”) made and entered into
as of this 1st day of June 2004 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 GEORGE
SOLAS, an individual whose current residence address is 22 Winterberry Lane, Rehoboth,
MA 02769 (“Employee”). 

RECITALS 

        WHEREAS,
the Employer desires to employ Employee as its Vice President and General Manager, Display
Products Group 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 Vice President and General Manager, Display Products Group.

        1.02     
Term of Employment. Employee’s employment pursuant to this Agreement shall
commence on June 1, 2004 or sooner as the parties may agree and, subject to the other
provisions of this Agreement, the term of such employment (the “Employment
Term”) shall continue indefinitely on an “at will” basis. 

        1.03     
Duties. Employee shall perform such managerial duties and responsibilities in
connection with the Company’s Display Products Group or its successor and such other
duties and responsibilities as may be assigned by the President/COO, or such other person
as the Employer may designate from time to time and 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 Employer’s President/COO or such other
person as the Employer may designate from time to time in the performance of such duties
and responsibilities. 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. 

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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 One
Hundred Seventy Five Thousand and 00/100 Dollars ($175,000.00), 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 expressly
consented otherwise 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 SBU Incentive Plan, as modified from time to time
(the “Annual Incentive Plan”) and paid a bonus (“Bonus”) pursuant
thereto. The Employee’s “target bonus percentage” for purposes of the
Annual Incentive Plan shall be fifty percent (50%). Except as provided otherwise in this
section 2.02, 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. For the fiscal year ending May 31, 2005
Employee shall be paid a Bonus of no less than $87,500. 

        2.03     
Auto Allowance. During the term of the Employee’s employment hereunder, the
Employee shall be paid an auto allowance in accordance with Employer’s auto allowance
plan for SBU managers as modified from time to time. 

        2.04     
Initial Stock Award and Option. On the commencement date of Employee’s
employment under this agreement he will be granted a Stock Option under Employer’s
Incentive Compensation Plan for 25,000 shares that will vest in five equal annual
installments over five years beginning one year from the grant date. 

        2.05     
Other Benefits. Employer will provide Employee such benefits (other than bonus,
auto allowance, severance 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. 

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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. 

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             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. 

ARTICLE FOUR 

NON-COMPETE AND
NON-SOLICITATION COVENANTS 

        4.01     
Non-Competition and Non-Solicitation. Employee acknowledges that it may be very
difficult for him to avoid using or disclosing the Confidential Information in violation
of Article Three above in the event that he is employed by any person or entity other than
the Employer in a capacity similar or related to the capacity in which he is employed by
the Employer. Accordingly, Employee agrees that he will not, during the term of employment
with Employer and for a period of two (2) years after the termination of such employment,
irrespective of the time, manner or cause of such termination, directly or indirectly
(whether or not for compensation or profit): 

          	(1) 	  	
               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 

               

          	(2) 	  	
               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 

               

          	(3) 	  	
               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 whom Employee called
               upon or dealt with, or whose account Employee supervised, for any of the
               following purposes: 

4

               	(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 

                    

          	(4) 	  	
               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 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. 

               

        4.02     
Obligation Independent. Each obligation of each subparagraph and provision of
Section 4.01 shall be independent of any obligation under any other subparagraph or
provision hereof or thereof. 

        4.03     
Public Stock. Nothing in Section 4.01, 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. 

        4.04     
Business Limitation. If, at the termination of Employee’s employment and for
the entire period of twelve (12) months prior thereto his duties and responsibilities are
limited by the Employer so that he is specifically assigned to, or responsible for, one or
more divisions, subsidiaries or business units of the Employer, then subparagraphs (1)
through (3) of Section 4.01 shall apply only to any business which competes with the
business of such divisions, subsidiaries or business units. 

        4.05     
Area Limitation If at the termination of Employee’s employment and for the
entire period of twelve (12) months prior thereto he or he has responsibility for only a
designated geographic area, then subparagraphs (1) through (3) of Section 4.01 shall apply
only within such area. 

ARTICLE FIVE 

TERMINATION 

        5.01     
Termination of Employee for Cause. The Employer shall have the right to terminate
Employee’s employment at any time for “cause.” Prior to such termination,
the Employer shall provide Employee with written notification of any and all allegations
constituting “cause” and the Employee shall be given five (5) working days after
receipt of such written notification to respond to those allegations in writing. Upon
receipt of the Employee’s response, the Employer shall meet with the Employee to
discuss the allegations. 

        For
purposes hereof, “cause” shall mean (i) an act or acts of personal dishonesty
taken by the Employee and intended to result in personal enrichment of the Employee, (ii)
material violations by the Employee of the Employee’s obligations or duties under, or
any terms of, this Agreement, which are not remedied in a reasonable period (not to exceed
ten (10) days) after receipt of written notice thereof from the Employer, (iii) any
violation by the Employee of any of the provisions of Articles Three or Four, or (iv)
Employee being charged, indicted or convicted (by trial, guilty or no contest plea or
otherwise) of (a) a felony, (b) any other crime involving moral turpitude, or (c) any
violation of law which would impair the ability of the Employer or any affiliate to obtain
any license or authority to do any business deemed necessary or desirable for the conduct
of its actual or proposed business. 

5

        5.02     
Termination of Employee Because of Employee’s Disability, Injury or Illness.
The Employer shall have the right to terminate Employee’s employment if Employee is
unable to perform the duties assigned to him by the Employer because of Employee’s
disability, injury or illness, provided however, such inability must have existed for a
total of one hundred eighty (180) consecutive days before such termination can be made
effective. 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. 

        5.03     
Termination as a Result of Employee’s Death. The obligations of the Employer
to Employee pursuant to this Agreement shall automatically terminate upon Employee’s
death. 

        5.04     
Termination of Employee for any Other Reason. The Employer shall have the right to
terminate Employee’s employment at any time at will for any reason upon ten (10) days
prior written notice to Employee. If Employee’s employment is terminated by the
Employer during the Employment Term for any reason other than the reason set forth in
Sections 5.01, 5.02 or 5.03 above, the Employer shall continue to pay to Employee for a
period of one (1) year, an amount equal to one hundred percent (100%) of his then current
Base Salary in installments on the same dates as the Employer makes payroll payments under
its customary practice. Employee shall only be entitled to receive the Bonus pursuant to
the Annual Incentive Plan for the year in which such termination occurs prorated and
accrued to the date of termination. In such case Employee shall not be entitled to
receive, unless otherwise required by law, any subsequent Other Benefits. 

        5.05     
Termination by Employee after Material Change. Subject to the provisions of
Articles Three and Four above, Employee shall have the right to terminate his employment
at any time within a period of 180 days after any “material change”. Such
termination shall be effective upon giving of notice by Employee to employer. For purposes
hereof, “material change” means (i) any sale or other transfer of all or
substantially all of the Employer’s assets, (ii) any merger, consolidation, share
exchange, tender offer, or other similar transaction involving the Employer, unless the
surviving entity is under control by the same person(s) or entity(ies) as the Employer was
prior to the transaction, (iii) any change in control of the Employer as a result of a
proxy contest or otherwise, or (iv) any plan is approved to liquidate or dissolve the
Employer. If Employee terminates his employment pursuant to this section, Employer shall
continue to pay to Employee for a period of one (1) year, an amount equal to one hundred
percent (100%) of his then current Base Salary in installments on the same dates as the
Employer makes payroll payments under its customary practice. Employee shall only be
entitled to receive the Bonus pursuant to the Annual Incentive Plan for the year in which
such termination occurs prorated and accrued to the date of termination. In such case
Employee shall not be entitled to receive, unless otherwise required by law, any
subsequent Other Benefits. 

        5.06     
Termination by Employee for any Other Reason. Subject to the provisions of Articles
Three and Four above, Employee may terminate his employment by the Employer at any time by
written notice to Employer. If Employee’s employment is so terminated under this
section, the Employer shall be obligated to continue to pay to Employee his then current
Base Salary, Bonus and Other Benefits accrued up to and including the date on which
Employee’s employment is so terminated, however, Employee and the Employer
acknowledge and agree to the fullest extent permitted by law, that Employee shall forfeit,
and the Employer shall not be responsible to pay or fund, directly or indirectly, any
accrued but unpaid accumulated but unpaid sick leave; accumulated but unpaid vacation
time; deferred compensation; severance pay or benefits; any and all benefits which are
accrued but not vested under any pension, profit sharing or other qualified retirement
plan and all service credits under each such plan (subject to any reinstatement of such
credits upon future reemployment with the Employer in accordance with federal law); and
right to post-employment coverage under any health, insurance or other welfare benefit
plan, including rights arising under Title X of COBRA or any similar federal or state
law (except that continuation coverage rights of Employee’s spouse and other
dependents, if any, under such plans or laws shall be forfeited only with their consent);
or any Other Benefits, if any, provided to Employee under any policy, program or plan of
the Employer not specifically described above, after the date of termination to which
Employee might otherwise be entitled under this Agreement but for his resignation. 

6

ARTICLE SIX 

REMEDIES 

        6.01     
Employee acknowledges that the restrictions contained in this Agreement will not prevent
him from obtaining such other gainful employment he may desire to obtain or cause him any
undue hardship and are reasonable and necessary in order to protect the legitimate
interests of employer and that violation thereof would result in irreparable injury to
Employer. Employee therefor acknowledges and agrees that in the event of a breach or
threatened breach by Employee of the provisions of Article Three or Article Four or
Section 1.03, Employer shall be entitled to an injunction restraining Employee from such
breach or threatened breach and Employee shall lose all rights to receive any payments
under Section 5.04. Nothing herein shall be construed as prohibiting or limiting Employer
from pursuing any other remedies available to Employer for such breach or threatened
breach; the rights hereinabove mentioned being in addition to and not in substitution of
such other rights and remedies. The period of restriction specified in Article Four shall
abate during the time of any violation thereof, and the portion of such period remaining
at the commencement of the violation shall begin to run until the violation is cured. 

        6.02     
Survival. The provisions of this Article Six and of Articles Three and Four shall
survive the termination or expiration of this Agreement. 

ARTICLE SEVEN 

MISCELLANEOUS 

        7.01     
Assignment. Employee and Employer acknowledge and agree that the covenants, terms
and provisions contained in this Agreement constitute a personal employment contract and
the rights and obligations of the parties thereunder cannot be transferred, sold,
assigned, pledged or hypothecated, excepting that the rights and obligations of the
Employer under this Agreement may be assigned or transferred pursuant to a sale of the
business, merger, consolidation, share exchange, sale of substantially all of the
Employer’s assets or of the business unit or division for which Employee is
performing services, or other reorganization described in Section 368 of the Code, or
through liquidation, dissolution or otherwise, whether or not the Employer is the
continuing entity, provided that the assignee, or transferee is the successor to all or
substantially all of the assets of the Employer or of the business unit or division for
which Employee is performing services and such assignee or transferee assumes the rights
and duties of the Employer, if any, as contained in this Agreement, either contractually
or as a matter of law. 

        7.02     
Severability. Should any of Employee’s obligations under this Agreement or the
application of the terms or provisions of this Agreement to any person or circumstances,
to any extent, be found illegal, invalid or unenforceable in any respect, such illegality,
invalidity or unenforceability shall not affect the other provisions of this Agreement,
all of which shall remain enforceable in accordance with their terms, or the application
of such terms or provisions to persons or circumstances other than those to which it is
held illegal, invalid or unenforceable. Despite the preceding sentence, should any of
Employee’s obligations under this Agreement be found illegal, invalid or
unenforceable because it is too broad with respect to duration, geographical or other
scope, or subject matter, such obligation shall be deemed and construed to be reduced to
the maximum duration, geographical or other scope, and subject matter allowable under
applicable law. 

The covenants of Employee in Articles
Three and Four and each subparagraph of Section 4.01 are of the essence of this Agreement;
they shall be construed as independent of any other provision of this Agreement; and the
existence of any claim or cause of action of Employee against the Employer, whether
predicated on the Agreement or otherwise shall not constitute a defense to enforcement by
the Employer of any of these covenants. The covenants of Employee shall be applicable
irrespective of whether termination of employment hereunder shall be by the Employer or by
Employee, whether voluntary or involuntary, or whether for cause or without cause. 

7

        7.03     
Notices. Any notice, request or other communication required to be given pursuant
to the provisions hereof shall be in writing and shall be deemed to have been given when
delivered in person or three (3) days after being deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested and addressed to the
party at its or his last known addresses. The address of any party may be changed by
notice in writing to the other parties duly served in accordance herewith. 

        7.04     
Waiver. The waiver by the Employer or Employee of any breach of any term or
condition of this Agreement shall not be deemed to constitute the waiver of any other
breach of the same or any other term or condition hereof. Failure by any party to claim
any breach or violation of any provision of this Agreement shall not constitute a
precedent or be construed as a waiver of any subsequent breaches hereof. 

        7.05     
Continuing Obligation. The obligations, duties and liabilities of Employee pursuant
to Articles Three and Four of this Agreement are continuing, absolute and unconditional
and shall remain in full force and effect as provided herein and survive the termination
of this Agreement. 

        7.06     
No Conflicting Obligations or Use. Employer does not desire to acquire from
Employee any secret or confidential know-how or information which he may have acquired
from others nor does it wish to cause a breach of any non compete or similar agreement to
which Employee may be subject. Employee represents and warrants that (i) other than for
this Agreement, he is not subject to or bound by any confidentiality agreement or non
disclosure or non compete agreement or any other agreement having a similar intent, effect
or purpose, and (ii) he is free to use and divulge to Employer, without any obligation to
or violation of any right of others, any and all information, data, plans, ideas,
concepts, practices or techniques which he will use, describe, demonstrate, divulge, or in
any other manner make known to Employer during the performance of services 

        7.07     
Attorneys Fees. In the event that Employee has been found to have violated any of
the terms of Articles Three or Four of this Agreement either after a preliminary
injunction hearing or a trial on the merits or otherwise, Employee shall pay to the
Employer the Employer’s costs and expenses, including attorneys fees, in enforcing
the terms of Articles Three or Four of this Agreement. 

        7.08     
Advise New Employers. During Employee’s employment with the Employer and for
one (1) year thereafter, Employee will communicate the contents of Articles Three and Four
to any individual or entity which Employee intends to be employed by, associated with, or
represent which is engaged in a business which is competitive to the business of Employer. 

        7.09     
Captions. The captions of Articles and Sections this Agreement are inserted for
convenience only and are not to be construed as forming a part of this Agreement. 

EMPLOYEE ACKNOWLEDGES THAT HE HAS
READ AND FULLY UNDERSTANDS EACH AND EVERY PROVISION OF THE FOREGOING AND DOES HEREBY
ACCEPT AND AGREE TO THE SAME. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above. 

	EMPLOYEE 	EMPLOYER 

	
 	By: 	 
 
		Title: 	 
 

EXHIBIT A 

ANNUAL INCENTIVE PLANRichardson Electronics, Ltd. Form 8-K Exhibit 10.47

Exhibit 10.47

EMPLOYMENT,
NONDISCLOSURE AND NON-COMPETE AGREEMENT 

        EMPLOYMENT,
NONDISCLOSURE AND NON-COMPETE AGREEMENT (“Agreement”) made and entered into
as of this 1st day of June 2004 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 WENDY
DIDDELL, an individual whose current residence address is 209 Stonington lane,
Colleyville TX 76034 (“Employee”). 

RECITALS 

        WHEREAS,
the Employer desires to employ Employee as its Vice President and General Manager,
Security Systems Division 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 her 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 she 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 Vice President and General Manager, Security Systems Division.

        1.02     
Term of Employment. Employee’s employment pursuant to this Agreement shall
commence on June 1, 2004 and, subject to the other provisions of this Agreement, the term
of such employment (the “Employment Term”) shall continue indefinitely on an
“at will” basis. 

        1.03     
Duties. Employee shall perform such managerial duties and responsibilities in
connection with the Company’s Security System Division or its successor and such
other duties and responsibilities as may be assigned by the President/COO, or such other
person as the Employer may designate from time to time and 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 Employer’s President/COO or
such other person as the Employer may designate from time to time in the performance of
such duties and responsibilities. Employee agrees to devote her full working time,
attention and energies to the diligent and satisfactory performance of her 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 her 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. 

1

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 she 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 One
Hundred Eighty Five Thousand and 00/100 Dollars ($185,000.00), 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 expressly
consented otherwise 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 SBU Incentive Plan, as modified from time to time
(the “Annual Incentive Plan”) and paid 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. During the term of the Employee’s employment hereunder, the
Employee shall be paid an auto allowance in accordance with Employer’s auto allowance
plan for SBU managers as modified from time to time. 

        2.04     
Initial Sock Award and Option. On the commencement date of Employee’s
employment under this agreement she will be granted a Restricted Stock Award under the
Employer’s Incentive Compensation Plan for (# of share to be market price on 6/1
divided into amount determined by taking the amount by which the market price on 6/1/04
exceeds the market price on 6/17/03 multiplied by 25,000) shares of
Employer’s Common Stock that will vest in five equal annual installments over five
years. In addition on such date Employee will be granted a Stock Option under
Employer’s Incentive Compensation Plan for 25,000 shares that will vest in five equal
annual installments over five years. 

        2.05     
Other Benefits. Employer will provide Employee such benefits (other than bonus,
auto allowance, severance 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 she 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. 

2

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 her 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 her employment with
the Employer from such other public sources by her own expenditure of significant time,
effort and money after termination of her 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 her during the term of her employment with Employer and to assign to
Employer any right, title or interest she 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 her 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 her 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 her 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

             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 her 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 herself 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 her by Employer. Employee further agrees
          to use her best endeavors to prevent the use for herself or others, or
          dissemination, publication, revealing, reporting or disclosure of, any
          Confidential Information. 

        3.04     
Protection of Reputation. Employee agrees that she will at no time, either during
her 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 her 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. 

ARTICLE FOUR 

NON-COMPETE AND
NON-SOLICITATION COVENANTS 

        4.01     
Non-Competition and Non-Solicitation. Employee acknowledges that it may be very
difficult for her to avoid using or disclosing the Confidential Information in violation
of Article Three above in the event that she is employed by any person or entity other
than the Employer in a capacity similar or related to the capacity in which she is
employed by the Employer. Accordingly, Employee agrees that she will not, during the term
of employment with Employer and for a period of two (2) years after the termination of
such employment, irrespective of the time, manner or cause of such termination, directly
or indirectly (whether or not for compensation or profit): 

          	(1) 	  	
               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 

               

          	(2) 	  	
               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 

               

          	(3) 	  	
               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 whom Employee called
               upon or dealt with, or whose account Employee supervised, for any of the
               following purposes: 

               

4

               	(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 

                    

          	(4) 	  	
               For herself 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 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. 

               

        4.02     
Obligation Independent Each obligation of each subparagraph and provision of
Section 4.01 shall be independent of any obligation under any other subparagraph or
provision hereof or thereof. 

        4.03     
Public Stock Nothing in Section 4.01, 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. 

        4.04     
Business Limitation If, at the termination of Employee’s employment and for
the entire period of twelve (12) months prior thereto her duties and responsibilities are
limited by the Employer so that she is specifically assigned to, or responsible for, one
or more divisions, subsidiaries or business units of the Employer, then subparagraphs (1)
through (3) of Section 4.01 shall apply only to any business which competes with the
business of such divisions, subsidiaries or business units. 

        4.05     
Area Limitation If at the termination of Employee’s employment and for the
entire period of twelve (12) months prior thereto she or she has responsibility for only a
designated geographic area, then subparagraphs (1) through (3) of Section 4.01 shall apply
only within such area. 

ARTICLE FIVE 

TERMINATION 

        5.01     
Termination of Employee for Cause. The Employer shall have the right to terminate
Employee’s employment at any time for “cause.” Prior to such termination,
the Employer shall provide Employee with written notification of any and all allegations
constituting “cause” and the Employee shall be given five (5) working days after
receipt of such written notification to respond to those allegations in writing. Upon
receipt of the Employee’s response, the Employer shall meet with the Employee to
discuss the allegations. 

        For
purposes hereof, “cause” shall mean (i) an act or acts of personal dishonesty
taken by the Employee and intended to result in personal enrichment of the Employee, (ii)
material violations by the Employee of the Employee’s obligations or duties under, or
any terms of, ther Agreement, which are not remedied in a reasonable period (not to exceed
ten (10) days) after receipt of written notice thereof from the Employer, (iii) any
violation by the Employee of any of the provisions of Articles Three or Four, or (iv)
Employee being charged, indicted or convicted (by trial, guilty or no contest plea or
otherwise) of (a) a felony, (b) any other crime involving moral turpitude, or (c) any
violation of law which would impair the ability of the Employer or any affiliate to obtain
any license or authority to do any business deemed necessary or desirable for the conduct
of its actual or proposed business. 

5

        5.02     
Termination of Employee Because of Employee’s Disability, Injury or Illness.
The Employer shall have the right to terminate Employee’s employment if Employee is
unable to perform the duties assigned to her by the Employer because of Employee’s
disability, injury or illness, provided however, such inability must have existed for a
total of one hundred eighty (180) consecutive days before such termination can be made
effective. 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. 

        5.03     
Termination as a Result of Employee’s Death. The obligations of the Employer
to Employee pursuant to ther Agreement shall automatically terminate upon Employee’s
death. 

        5.04     
Termination of Employee for any Other Reason. The Employer shall have the right to
terminate Employee’s employment at any time at will for any reason upon ten (10) days
prior written notice to Employee. If Employee’s employment is terminated by the
Employer during the Employment Term for any reason other than the reason set forth in
Sections 5.01, 5.02 or 5.03 above, the Employer shall continue to pay to Employee for a
period of one (1) year, an amount equal to one hundred percent (100%) of her then current
Base Salary in installments on the same dates as the Employer makes payroll payments under
its customary practice. Employee shall only be entitled to receive the Bonus pursuant to
the Annual Incentive Plan for the year in which such termination occurs prorated and
accrued to the date of termination. In such case Employee shall not be entitled to
receive, unless otherwise required by law, any subsequent Other Benefits. 

        5.05     
Termination by Employee. Subject to the provisions of Articles Three and Four
above, Employee may terminate her employment by the Employer at any time by written notice
to Employer. If Employee’s employment is so terminated, the Employer shall be
obligated to continue to pay to Employee her then current Base Salary, Bonus and Other
Benefits accrued up to and including the date on which Employee’s employment is so
terminated, however, Employee and the Employer acknowledge and agree to the fullest
extent permitted by law, that Employee shall forfeit, and the Employer shall not be
responsible to pay or fund, directly or indirectly, any accrued but unpaid accumulated but
unpaid sick leave; accumulated but unpaid vacation time; deferred compensation; severance
pay or benefits; any and all benefits which are accrued but not vested under any pension,
profit sharing or other qualified retirement plan and all service credits under each such
plan (subject to any reinstatement of such credits upon future reemployment with the
Employer in accordance with federal law); and right to post-employment coverage under any
health, insurance or other welfare benefit plan, including rights arising under
Title X of COBRA or any similar federal or state law (except that continuation
coverage rights of Employee’s spouse and other dependents, if any, under such plans
or laws shall be forfeited only with their consent); or any Other Benefits, if any,
provided to Employee under any policy, program or plan of the Employer not specifically
described above, after the date of termination to which Employee might otherwise be
entitled under this Agreement but for his resignation. 

ARTICLE SIX 

REMEDIES 

        6.01     
Employee acknowledges that the restrictions contained in this Agreement will not prevent
her from obtaining such other gainful employment she may desire to obtain or cause her any
undue hardship and are reasonable and necessary in order to protect the legitimate
interests of employer and that violation thereof would result in irreparable injury to
Employer. Employee therefor acknowledges and agrees that in the event of a breach or
threatened breach by Employee of the provisions of Article Three or Article Four or
Section 1.03, Employer shall be entitled to an injunction restraining Employee from such
breach or threatened breach and Employee shall lose all rights to receive any payments
under Section 5.04. Nothing herein shall be construed as prohibiting or limiting Employer
from pursuing any other remedies available to Employer for such breach or threatened
breach, the rights hereinabove mentioned being in addition to and not in substitution of
such other rights and remedies. The period of restriction specified in Article Four shall
abate during the time of any violation thereof, and the portion of such period remaining
at the commencement of the violation shall begin to run until the violation is cured. 

6

        6.02     
Survival. The provisions of this Article Six and of Articles Three and Four shall
survive the termination or expiration of this Agreement. 

ARTICLE SEVEN 

MISCELLANEOUS 

        7.01     
Assignment. Employee and Employer acknowledge and agree that the covenants, terms
and provisions contained in this Agreement constitute a personal employment contract and
the rights and obligations of the parties thereunder cannot be transferred, sold,
assigned, pledged or hypothecated, excepting that the rights and obligations of the
Employer under this Agreement may be assigned or transferred pursuant to a sale of the
business, merger, consolidation, share exchange, sale of substantially all of the
Employer’s assets or of the business unit or division for which Employee is
performing services, or other reorganization described in Section 368 of the Code, or
through liquidation, dissolution or otherwise, whether or not the Employer is the
continuing entity, provided that the assignee, or transferee is the successor to all or
substantially all of the assets of the Employer or of the business unit or division for
which Employee is performing services and such assignee or transferee assumes the rights
and duties of the Employer, if any, as contained in this Agreement, either contractually
or as a matter of law. 

        7.02     
Severability. Should any of Employee’s obligations under this Agreement or the
application of the terms or provisions of this Agreement to any person or circumstances,
to any extent, be found illegal, invalid or unenforceable in any respect, such illegality,
invalidity or unenforceability shall not affect the other provisions of this Agreement,
all of which shall remain enforceable in accordance with their terms, or the application
of such terms or provisions to persons or circumstances other than those to which it is
held illegal, invalid or unenforceable. Despite the preceding sentence, should any of
Employee’s obligations under this Agreement be found illegal, invalid or
unenforceable because it is too broad with respect to duration, geographical or other
scope, or subject matter, such obligation shall be deemed and construed to be reduced to
the maximum duration, geographical or other scope, and subject matter allowable under
applicable law. 

The covenants of Employee in Articles
Three and Four and each subparagraph of Section 4.01 are of the essence of this Agreement;
they shall be construed as independent of any other provision of this Agreement; and the
existence of any claim or cause of action of Employee against the Employer, whether
predicated on the Agreement or otherwise shall not constitute a defense to enforcement by
the Employer of any of these covenants. The covenants of Employee shall be applicable
irrespective of whether termination of employment hereunder shall be by the Employer or by
Employee, whether voluntary or involuntary, or whether for cause or without cause. 

        7.03     
Notices. Any notice, request or other communication required to be given pursuant
to the provisions hereof shall be in writing and shall be deemed to have been given when
delivered in person or three (3) days after being deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested and addressed to the
party at its or her last known addresses. The address of any party may be changed by
notice in writing to the other parties duly served in accordance herewith. 

        7.04     
Waiver. The waiver by the Employer or Employee of any breach of any term or
condition of this Agreement shall not be deemed to constitute the waiver of any other
breach of the same or any other term or condition hereof. Failure by any party to claim
any breach or violation of any provision of this Agreement shall not constitute a
precedent or be construed as a waiver of any subsequent breaches hereof. 

        7.05     
Continuing Obligation. The obligations, duties and liabilities of Employee pursuant
to Articles Three and Four of this Agreement are continuing, absolute and unconditional
and shall remain in full force and effect as provided herein and survive the termination
of this Agreement. 

7

        7.06     
No Conflicting Obligations or Use. Employer does not desire to acquire from
Employee any secret or confidential know-how or information which she may have acquired
from others nor does it wish to cause a breach of any non compete or similar agreement to
which Employee may be subject. Employee represents and warrants that (i) other than for
ther Agreement, she is not subject to or bound by any confidentiality agreement or non
disclosure or non compete agreement or any other agreement having a similar intent, effect
or purpose, and (ii) she is free to use and divulge to Employer, without any obligation to
or violation of any right of others, any and all information, data, plans, ideas,
concepts, practices or techniques which she will use, describe, demonstrate, divulge, or
in any other manner make known to Employer during the performance of services 

        7.07     
Attorneys Fees. In the event that Employee has been found to have violated any of
the terms of Articles Three or Four of this Agreement either after a preliminary
injunction hearing or a trial on the merits or otherwise, Employee shall pay to the
Employer the Employer’s costs and expenses, including attorneys fees, in enforcing
the terms of Articles Three or Four of this Agreement. 

        7.08     
Advise New Employers. During Employee’s employment with the Employer and for
one (1) year thereafter, Employee will communicate the contents of Articles Three and Four
to any individual or entity which Employee intends to be employed by, associated with, or
represent which is engaged in a business which is competitive to the business of Employer. 

        7.09     
Captions. The captions of Articles and Sections this Agreement are inserted for
convenience only and are not to be construed as forming a part of this Agreement. 

EMPLOYEE ACKNOWLEDGES THAT SHE HAS
READ AND FULLY UNDERSTANDS EACH AND EVERY PROVISION OF THE FOREGOING AND DOES HEREBY
ACCEPT AND AGREE TO THE SAME. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above. 

	EMPLOYEE 	EMPLOYER 

	
 	By: 	 
 
		Title: 	 
 

EXHIBIT A 

ANNUAL INCENTIVE PLAN

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