Exhibit 10.128
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is entered into as of April 3, 2009
by and between Meade Instruments Corp., a Delaware corporation (the
“Company”), and Steven G. Murdock
(“Employee”).
WITNESSETH:
WHEREAS, the Company and Employee
desire to enter into this Agreement to assure the Company of the
continuing and exclusive service of Employee and to set forth the
terms and conditions of Employee’s employment with the
Company.
NOW, THEREFORE, in consideration of
the mutual promises and covenants set forth herein, the parties
agree as follows:
1.
Term . The Company agrees to employ Employee and
Employee hereby accepts such employment, in accordance with the
terms of this Agreement, commencing as of February 5, 2009 and
continuing in effect until February 5, 2010 unless terminated
earlier pursuant to Section 5 hereof.
2.
Services and Exclusivity of Services . So long as this
Agreement shall continue in effect, during the Company’s
normal business hours Employee shall devote substantially all of
his business time, energy and ability to the business, affairs and
interests of the Company and matters related thereto, shall use
Employee’s best efforts and abilities to promote the
Company’s interests and shall perform the services
contemplated by this Agreement in accordance with policies
established by and under the direction of the Board of Directors of
the Company (the “Board”).
Without the prior express written
authorization of the Board, Employee shall not, directly or
indirectly, during the term of this Agreement render services to
any other person or firm for compensation or engage in any activity
competitive with or adverse to the Company’s business.
Employee may serve as a director or in any other capacity of any
business enterprise or any nonprofit or governmental entity or
trade association, provided in each case that such service is
approved in advance of such service and in writing by the
Board. Notwithstanding the foregoing, Employee may
(i) make and manage personal business investments of
Employee’s choice and serve in any capacity with any civic,
educational or charitable organization without seeking the approval
of the Board, provided that such activities and services do not
materially interfere or conflict with the performance of the duties
hereunder or create any conflict of interest with such duties and
(ii) continue to work at Grandma Lucy’s outside of the
Company’s normal business hours.
3.
Duties and Responsibilities . Employee shall serve as
the Chief Executive Officer of the Company for the duration of this
Agreement. In the performance of Employee’s duties,
Employee shall report directly to the Board. During the term
of this Agreement, Employee shall be based at the Company’s
principal executive offices in Orange County,
California.
Employee agrees to observe and
comply with the rules and regulations of the Company and
agrees to carry out and perform orders, directions and policies of
the Company and the Board as they may be, from time to time, stated
either orally or in writing. The Company agrees that the
duties which may be assigned to Employee shall be usual and
customary duties of the office to which Employee may from time to
time be appointed or elected and shall not be inconsistent with the
provisions of the charter documents of the Company or applicable
law. Employee shall have such corporate power and authority
as shall reasonably be required to enable Employee to perform the
duties required in any office that may be held.
4.
Compensation
.
(a)
Base Compensation
. During the term of this
Agreement, the Company agrees to pay Employee a base salary at the
rate of $1.00 per year.
(b)
Other Benefits
. Employee shall also be
entitled to all rights and benefits for which Employee may
otherwise be eligible under any life, medical, dental, disability,
or insurance plan or policy or other plan or benefit that the
Company may provide for Employee or (provided Employee is eligible
to participate therein) for employees of the Company generally, as
from time to time in effect, during the term of this
Agreement.
(c)
Perquisites
. Employee shall be entitled
to four weeks vacation.
(d)
Change of Control
. In the event the option
granted pursuant to the Stand-Alone Stock Option Agreement (the
“Option Agreement”) of even date herewith between the
Company and the Employee is (i) not approved by the
stockholders of the Company at the Company’s 2009 Annual
Meeting of Stockholders and (ii) a Change of Control Event (as
described below) occurs prior to February 5, 2011, the Company
shall pay Employee an amount equal to the product of
(i) 750,000 and (ii) the difference between (A) the
COC Price (as defined below) less (B) $0.22; provided that if
the Employee is terminated for Cause or he voluntarily terminates
his employment with the Company, the Employee shall not receive any
payments under this Section 4(d).
(e)
Definitions
.
(i)
COC Price . The term “COC Price” shall
mean the following:
(A)
If the Change of Control Event is described in
clause (A) or (C) of
Section 4(e)(ii) below, the quotient equal to
(1) the Distributable Amount (as defined below) divided by
(2) the then outstanding shares of the Common Stock of the
Company (assuming all convertible securities (excluding options) of
the Company had been converted); or
(B)
If the Change of Control Event is described in
clause (B) of Section 4(e)(ii) below, the
amount per share received by each stockholder in connection with
such Change of Control Event.
(ii)
Change of Control
Event . The term
“Change of Control Event” shall mean any of the
following:
(A)
Any dissolution or liquidation of the Company in which there is a
distribution to the stockholders of the Company;
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(B)
Approval by the stockholders of the Company of an agreement to
merge or consolidate, or otherwise reorganize, with or into one or
more entities that are not subsidiaries or other affiliates, as a
result of which less than 50% of the outstanding voting securities
of the surviving or resulting entity immediately after the
reorganization are, or will be, owned, directly or indirectly, by
stockholders of the Company immediately before such reorganization
(assuming for purposes of such determination that there is no
change in the record ownership of the Company’s securities
from the record date for such approval until such reorganization
and that such record owners hold no securities of the other parties
to such reorganization, but including in such determination any
securities of the other parties to such reorganization held by
affiliates of the Company); or
(C)
Approval by the stockholders of the Company of the sale of
substantially all of the Company’s business and/or assets to
a person or entity which is not a subsidiary or other
affiliate.
(iii)
Distributable Amount
. The term
“Distributable Amount” shall mean the amount available
for distribution to the Company’s stockholders after the
consummation of the applicable Change of Control Event, less the
outstanding obligations and expenses of the Company (excluding any
payment to be made under Section 4(d)).
5.
Termination
. This Agreement and all
obligations hereunder (except the obligations contained in Sections
7, 8, 9, 10, 11 and 12 (Confidential Information, Inventions and
Patents, Non-Competition, No Solicitation of Customers,
Noninterference with Employees and Assistance in Patent
Applications) which shall survive any termination hereunder) shall
terminate upon the earliest to occur of any of the
following:
(a)
Voluntary Termination
. Employee’s employment
shall terminate upon the voluntary termination by Employee.
In such instance, all obligations hereunder to Employee (or
Employee’s heirs or legal representatives) shall
cease.
(b)
Death or Disability of
Employee .
Employee’s employment shall terminate upon the death or
Disability (as defined below) of Employee. In such instance,
except as set forth below, all obligations hereunder to Employee
(or Employee’s heirs or legal representatives) shall cease,
other than for payment to Employee or Employee’s estate or
beneficiary, as applicable, of any amount due pursuant to the terms
of any applicable benefit plan. For the purposes of this
Agreement, disability shall mean the absence of Employee performing
Employee’s duties with the Company on a full-time basis for a
period of six months, as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
Employee or Employee’s legal representative (such agreement
as to acceptability not to be withheld unreasonably).
(c)
Cause . The Company may terminate
Employee’s employment and all of Employee’s rights to
receive any benefits hereunder for Cause. For purposes of
this Agreement, the term “Cause” shall be defined as
any of the following; provided, however, that the Company must
determine the presence of such Cause in good faith:
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(i)
Employee’s material and willful breach of any duties and
responsibilities under this Agreement (other than as a result of
incapacity due to Employee’s disability);
(ii)
Employee’s commission of act of fraud upon the
Company;
(iii)
Employee’s immoderate use of alcoholic beverages or narcotics
or other substance abuse affecting Employee’s performance of
his duties hereunder;
(iv)
Employee’s conviction by, or entry of a plea of guilty or
nolo contendere in, a court of competent and final jurisdiction for
a felony or any crime which adversely affects the Company and/or
its reputation in the community or which involves moral turpitude
or is punishable by imprisonment in the jurisdiction involved;
or
(v)
Employee’s willful and material violation of any duty of
loyalty to the Company or willful and material breach of
Employee’s fiduciary duties to the Company.
For purposes of this paragraph, no act or
failure to act on the part of Employee shall be considered
“willful” unless done, or omitted to be done, by
Employee in bad faith or without reasonable belief that
Employee’s action or omission was in the best interest of the
Company
(d)
Without Cause
. Notwithstanding any other
provision of this Section, the Company may terminate
Employee’s employment with the Company without cause at any
time, but in the event of such termination without cause, Employee
shall be entitled to receive funds equal to the amount of the
Company sponsored portion (HMO level) of Employee’s group
medical insurance coverage for Employee (and Employee’s
spouse and/or family, as in place immediately before notice of the
termination (up to HMO level only)), for a period of 12 months as
governed by the Consolidated Omnibus Budget Reconciliation Act of
1984, as amended (“COBRA”). In connection with
this subsection, the Company will provide Employee with a COBRA
notice, which will include the insurance premium rate information
for coverage for Employee under COBRA. In order to receive
such COBRA benefits, Employee must timely apply for and elect such
COBRA benefits. It will be Employee’s responsibility
and obligation to pay the applicable COBRA premium for such
coverage. The aggregate value of all payments to be made to
Employee under this Section 5(d) shall be paid to
Employee in 12 equal monthly payments commencing the first month
after the termination of this Agreement.
(e)
Good Reason
. In the event Employee
voluntarily terminates Employee’s employment pursuant to
Section 5(a) hereof, and such termination is made by
Employee for Good Reason (as defined below), then Employee shall be
entitled to receive payment equal to and on the same terms and
conditions as that paid to Employee under
Section 5(d) hereof; provided, however, that before
Employee may terminate his or her employment pursuant to this
Section 5(e), the Company shall have 30 days after the receipt
of written notice by Employee specifying (in reasonable detail) the
facts and circumstances for such Good Reason termination and the
corrective action Employee believes is required to remedy such
action; provided further, that such notice must be delivered in
writing to the Board hereunder no later than 60 days after the
initial existence of the facts and circumstances giving rise to
Employee’s notice of Good Reason hereunder. For
purposes of this Agreement “Good Reason” shall be
defined as any of the following:
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(i)
The material diminution of
authority, duties or responsibilities of Employee under this
Agreement.
(ii)
The Company requiring Employee to be
based at any office or location which increases the distance from
Employee’s home to the office or location by more than 30
miles from the dista
