Short-Term Disabilities Agreement

This Agreement (the Agreement) made and entered into as of May 10, 2012, between RL Electronics, Inc, 440 Montgomery St., San Francisco, California 94103 (the Company) and Peter R. Olsen, 123 Main St., Mill Valley, California 94941, an individual (Employee). In consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows: Reasons for Leave The Employee can seek a Leave of absence for the following reasons, including but not limited to (a) personal reasons (b) illness or injury, or (c) short-term disability. The Company, based upon the needs of its operation and for good and sufficient cause, shall grant leave of absence to employees who qualify under the guidelines and requirements set forth in the Companys employee handbook and policies manual. Employee is seeking a leave of absence for the following reasons: Peter Olsen severely injured his left hand while trying to repair a company lathe. He cannot perform the duties of his job until his hand has had ample time to heal.. Duration of Leave Employee has requested, and the Company hereby grants leave of absence from his/her full-time employment, commencing May 10, 2012 and ending June 01, 2012, subject to the conditions of this Agreement. Employee is expected to return to work the earliest work day following June 01, 2012. Compensation During Leave of Absence Except as otherwise provided in this Agreement, the Employee will be considered an employee during the period of leave-of-absence. During Employee's paid leave-of-absence, the Company will continue to pay the employee the amount of his/her current base salary. Employee shall not hold any title or position with the Company, and shall have no titles, duties, responsibilities or authority with respect to the Company and its operations. The Company shall withhold usual and customary withholding for tax purposes from all monthly salary continuation payments through the leave of absence, to the extent required by law. Employee shall not be entitled to benefits including paid time off and holiday pay. However, group medical benefits shall remain in force during the Employees leave of absence and employee and any of his/her applicable dependants shall be entitled to such group benefits. Protection of Rights Employees seniority rights shall not be affected by his/her inability to work because of proven sickness or injury. The Company will not modify the Pension Plans or any other plans or benefits under which Employee is entitled to participate in a manner which would result in differential treatment to the employee. Employee's right to exercise nonqualified stock options will be administered in accordance with those Plans, and shall continue so long as Employee is employed by the Company and for such period of time as provided by such Plans upon Employee's
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retirement. Prohibition During the period of absence, Employee shall not (i) directly or indirectly, accept any employment, consult for or with, or otherwise provide or perform any services of any nature to, for or on behalf of any person, firm, partnership, corporation or other business or entity that is engaged in similar kind of business done by the Company. Failure to comply with this provision shall result in the complete loss of seniority rights for the Employee. Extension of Leave of Absence Employee can seek an extension of leave by submitting a written request to Rob G. Mackabee. Requests for extensions must be received by the Company no later than 5 days prior to June 01, 2012. Approval or denial by the Company will be made in writing. Termination If the Employee fails to return to work by the time prescribed in this Agreement, the employee may be terminated from employment. Miscellaneous Provisions (a) Governing Law: The laws of the State of California shall govern the Agreement. (b) Severability: In the event, any one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability shall not affect any other provision. This Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been contained in it. (c) Amendments: This Agreement may be amended by the parties only by a written agreement. (d) Attorneys' Fees: If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees in addition to any other relief to which that party may be entitled. (e) Headings: Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent. In witness of the mutual promises made above, Company and Employee have executed this contract on the above written date. RL ELECTRONICS, INC

___________________________________ By Dorian M. Rothschild, its HR Manager

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EMPLOYEE

___________________________________ Peter R. Olsen

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