SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report(Date of earliest event reported)May 31, 1995
RICHARDSON ELECTRONICS, LTD.
(Exact name of registrant as specified in its charter)
Delaware 0-12906 36-2096643
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
40W267 Keslinger Road
LaFox, IL 60147
(Address of principal executive offices)
Registrant's telephone number, including area code 708-208-2200
Not applicable
(Former name or former address, if changed since last report.)
Exhibit Index is located at page 3
This Current Report on Form 8-K contains a total of 9 pages.
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Item 5 Other Events
On May 31, 1995 the Registrant entered into and consummated a
Settlement Agreement with the United States of America resolving
monetary claims, publicly reported by the Registrant in March
1994, asserted to be in excess of $11 million by the United
States under the False Claims Act and the Lanham Act for conduct
of the Registrant in connection with a Department of Defense
contract for night-vision tubes that was completed by the
Registrant in 1989. Pursuant to the Settlement Agreement the
Registrant, without admitting any liability or wrongdoing and in
order to avoid extended and costly litigation, paid $4.7 million
to the United States in return for a release of monetary claims
in connection with the contract. The Registrant expects the
charge for the settlement, net of the tax effect, will be
approximately $2.5 million.
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Item 7 Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits
10(a) Settlement Agreement by and between the United
States of America and Richardson Electronics, Ltd.
dated May 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
RICHARDSON ELECTRONICS, LTD.
By: /s/ William G. Seils
William G. Seils
Senior Vice President
and Secretary
Date: June 6, 1995
SETTLEMENT AGREEMENT
This Settlement Agreement ("Settlement Agreement") is made by
and between the United States of America ("United States"), by its
undersigned attorney, and Richardson Electronics, Ltd.
("Richardson").
A. Recitals
1. Richardson is a corporation incorporated in Delaware with
its corporate headquarters in La Fox, Illinois.
2. On or about October 1, 1987, the Defense Electronics
Supply Center ("DESC"), in Dayton, Ohio, a component of the
Department of Defense, awarded Contract No. DLA90087-C-3380 ("the
Contract") in the amount of $3,197,096 to Richardson. The Contract
called for the production by Richardson and delivery of 10,801 Type
6914 night vision image converter tubes.
3. The United States has investigated and contends that it
has civil claims and causes of action against Richardson under the
False Claims Act, 31 U.S.C. Sec. 3729 et seq., the Lanham Act, 15
U.S.C. Sec. 1114 et seq., and at common law, to wit, claims for breach
of contract or warranty, negligent or fraudulent misrepresentation,
unjust enrichment or payment by mistake, arising from the following
actions which the United States contends Richardson took:
(a) substituting ten First Article tubes produced by a
different company, mislabeling those tubes and falsely
and fraudulently certifying in the First Article report
that it (Richardson) had manufactured those First Article
tubes when, in fact, it had not;
(b) furnishing production tubes that were defective and/or
non-conforming to performance specifications under the
contract in that they failed to meet the requirements of
MIL-E-1/1049E (10 April 1984) or were mislabeled and
falsely and fraudulently submitting claims for payment
for those production tubes, while knowing them to be so
non-conforming, defective and/or mislabeled.
4. Richardson denies that the United States has any civil
claims or causes of action arising from the Contract, denies that
it manufactured or delivered tubes that were defective and
non-conforming and denies that it made false or fraudulent
certifications or that it submitted false and fraudulent claims.
5. The United States and Richardson desire to reach a full
and final compromise of the civil claims or causes of action
arising from the Contract without resort to litigation.
NOW THEREFORE, in consideration of the mutual promises,
covenants, and obligations set forth in this Settlement Agreement,
and for good and valuable consideration, the receipt and
sufficiency of which both parties hereby acknowledge, it is agreed
as follows:
B. Terms of Agreement
6. Richardson agrees to pay to the United States a total of
$4,700,000 ("Settlement Amount") in order to settle any civil
claims or causes of action against Richardson, its affiliates,
subsidiaries or its current and former directors, officers, agents
or employees described in paragraph 3, above. The Settlement
Amount shall be paid by wire transfer to the United States Attorney
for the Northern District of Illinois.
7. Except as otherwise provided in paragraph 8, below, upon
execution of this Settlement Agreement and payment of the
Settlement Amount pursuant to paragraph 6, above, the United States
releases, waives, and discharges Richardson, its affiliates,
subsidiaries and its current and former directors, officers, agents
and employees from any civil or administrative monetary claims or
causes of action described in paragraph 3, above. Upon the
execution of this Settlement Agreement, Richardson releases,
waives, and discharges any civil or administrative claims or causes
of action it may have against the United States arising out of,
from or relating to the Contract.
8. It is expressly agreed that the release set forth in the
preceding paragraph 7, above, shall not include (a) claims arising
under Title 26 of the United States Code (Internal Revenue Code),
or any other claims for federal, state or local taxes, or under
securities law; (b) suspension or debarment rights of any federal
agency; (c) any claims based on such obligations as are created by
this Settlement Agreement; or (d) claims for personal injury or
property damage arising from the manufacture and delivery of the
Type 6914 tubes under the Contract.
9. Richardson agrees that all costs (as defined in Federal
Acquisition Regulation Sec. 31.205-47) incurred by or on behalf of
Richardson or its current or former officers, directors, agents or
employees in connection with (1) the matters covered by this
Settlement Agreement; (2) the Government's audit and investigation
of the matters covered by this Settlement Agreement; (3)
Richardson's investigation, defense and corrective actions with
respect to the matters specifically covered by this Settlement
Agreement; (4) the negotiation of this Settlement Agreement; and
(5) the Settlement Amount to be paid to the United States pursuant
to this Settlement Agreement, shall be unallowable costs for
government contract accounting purposes. These amounts shall be
separately accounted for by Richardson.
10. Pursuant to a letter dated May 23, 1995 from the U.S.
Attorney for the Northern District of Illinois, the United States
has agreed that it will not bring any criminal charges against
Richardson or its current or former directors, officers, agents or
employees arising out of, from or relating to the Contract. A copy
of that letter is attached hereto as Exhibit A, and is incorporated
herein and made a part hereof by reference.
11. As soon as practicable after the execution of this
Settlement Agreement by all parties, the United States and
Richardson shall make reasonable efforts to destroy all of the Type
6914 Type tubes made by Richardson pursuant to the Contract which
are in the possession of either of them, and shall notify each
other in writing upon completion of such destruction.
C. Miscellaneous Provisions
12. The provisions of this Settlement Agreement shall be
binding upon the parties hereto, and their successors and assigns.
13. The parties acknowledge that the individuals executing
this Settlement Agreement have authority to do so; that such
individuals have reviewed the terms and provisions of this
Settlement Agreement; that they have consulted legal counsel as to
the meaning and legal effect of this Settlement Agreement; and that
this Settlement Agreement contains the entire agreement between
them and may not be modified, amended, or terminated except by
written agreement signed by the parties and specifically referring
to this Settlement Agreement.
14. This Settlement Agreement may be executed in
counterparts, all of which will constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto affix their signatures.
RICHARDSON ELECTRONICS, LTD. UNITED STATES OF AMERICA
By: /s/ Edward J. Richardson By: /s/ John A. Kolar
EDWARD J. RICHARDSON JOHN A. KOLAR, Esq.
Chairman and Chief Executive Officer Commercial Litigation Branch
Richardson Electronics, Ltd. U.S. Department of Justice
40W267 Keslinger Road 10th Street and Constitution
LaFox, Illinois 60147 Ave., N.W.
Washington, D.C. 20530
Dated: 5/31/95 Dated: 5/31/95
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U.S. Department of Justice
United States Attorney
Northern District of Illinois
May 23, 1995
Richard J. Rappaport
Ross & Hardies
150 North Michigan Avenue
Chicago, Illinois 60601-7567
Re: Richardson Electronics, Ltd. and Department of Defense
Contract number DLA900-87-C-3380
Dear Mr. Rappaport:
Richardson Electronics, Ltd., ("Richardson") as part of an
executed settlement agreement between the United States and
Richardson seeks assurance that no criminal charges will be brought
against Richardson Electronics, Ltd., or its current or former
officers, directors, agents, or employees, including but not
limited to, George Snyder, Peter Johnston, Frank Putz, John
Neilson, Donald Rice, Carl Davidson, Anton Shulski and David Doud,
for any violation of federal criminal statutes arising from the
awarding of Department of Defense Contract number DLA900-87-C-3380
and the production and delivery by Richardson of the "Type 6914"
converter tubes.
I state that the United States will not bring criminal charges
against Richardson or its current or former officers, directors,
agents, or employees, including but not limited to, George Snyder,
Peter Johnston, Frank Putz, John Neilson, Donald Rice, Carl
Davidson, Anton Shulski and David Doud for any violation of federal
criminal statutes arising from the awarding of Department of
Defense contract number DLA900-87-C-3380 and the production and
delivery of the "Type 6914" converter tubes.
It is understood that this letter will be attached to and be
incorporated into the executed settlement agreement between the
United States and Richardson. It is also understood that the
settlement agreement between the parties is contingent upon the
issuance of this letter to Richardson and its incorporation into
the settlement agreement.
Respectfully submitted,
By: /s/ James B. Burns
JAMES B. BURNS
United States Attorney
EXHIBIT A
