Exhibit 10.73
EMPLOYMENT AGREEMENT
(Steven Murdock)
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of February 1, 2010
(the “Effective Date”), by and between Meade Instruments Corp., a Delaware
corporation (the “Company”), and Steven Murdock (“Executive”).
WITNESSETH:
WHEREAS, the Company and Executive desire to enter into this Agreement to assure
the Company of the continuing and exclusive service of Executive and to set
forth the terms and conditions of Executive’s employment with the Company.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties agree as follows:
1. Term. The Company hereby employs Executive, and Executive hereby accepts such
employment, for an initial term commencing as of the Effective Date and ending
on February 28, 2011, unless sooner terminated in accordance with the provisions
of Section 5; with such employment to continue thereafter for successive
one-year periods in accordance with the terms of this Agreement on March 1, 2011
and each anniversary thereof (subject to termination as aforesaid) unless either
party notifies the other party in writing not less than one hundred and eighty
(180) days before expiration of the initial term and each annual renewal thereof
(the period during which Executive is employed hereunder being hereinafter
referred to as the “Term”) of an intent not to renew this Agreement.
2. Services and Exclusivity of Services. So long as this Agreement shall
continue in effect, Executive shall devote Executive’s full business time,
energy and ability exclusively to the business, affairs and interests of the
Company and matters related thereto, shall use Executive’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 Company’s Board of Directors (the “Board”).
Without the prior express written authorization of the Board, Executive 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. Executive 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, Executive may make and manage personal business
investments of Executive’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.

 

 

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3. Duties and Responsibilities. Executive shall serve as the Chief Executive
Officer of the Company for the duration of this Agreement. In the performance of
Executive’s duties, Executive shall report directly to the Board and shall be
subject to the direction of the Board and to such limits on Executive’s
authority as the Board may from time to time impose, provided such direction and
limits are consistent with Executive’s position as Chief Executive Officer.
During the term of this Agreement, Executive shall be based at the Company’s
principal executive offices in Orange County, California. Executive 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 in writing.
4. Compensation.
(a) Base Compensation. During the term of this Agreement, the Company agrees to
pay Executive an annual base salary at the rate of Two Hundred Fifty Thousand
Dollars ($250,000) per year, payable in accordance with the Company’s practices
in effect from time to time (the “Base Salary”).
(b) Incentive Compensation.
(i) Executive shall also be entitled to a cash bonus if certain targets are
achieved. The calculation of such cash bonus amount shall be determined by the
Company’s compensation committee within the first sixty (60) days of each fiscal
year; provided, however, that for the Company’s FY2011 the cash bonus shall be
calculated as set forth in Section 4(b)(ii) below.
(ii) If the Company’s EBTDA for FY2011 exceeds $62,500, then the Executive shall
receive a cash bonus in the amount of $62,500; provided, however, if the
Company’s EBTDA for FY2011 exceeds $625,000, then Executive shall instead
receive a cash bonus in the amount of $125,000. Any such cash bonus shall be
paid to Executive prior to April 15, 2011. For purposes of this Agreement, the
following terms shall have the following meanings:
“EBTDA” means an amount equal to the Net Income (without taking into account any
payment to Executive under this Section 4(b)(ii) for any purpose) for FY2011
plus the provision for income taxes and plus the amount of Non-Cash Items.
“FY2011” means the Company’s fiscal year ending February 28, 2011.
“Net Income” means the Company’s net income as determined in accordance with
generally accepted accounting principles in the United States, determined on a
consistent basis).
“Non-Cash Items” means the following items to the extent included in Net Income
for FY2011:

  (A)  
depreciation and amortization expense;

  (B)  
stock-based compensation expense; and

 

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  (C)  
impairment of inventory, goodwill and/or intangibles charges.

(iii) If Executive is terminated by the Company for any reason or Executive
voluntarily terminates his employment for any reason at any time prior to end of
FY2011, Executive shall not be entitled to any payment under Section 4(b)(ii);
provided, however, if after November 1, 2010, Executive is terminated by the
Company without Cause, he terminates his employment for Good Reason, he dies, he
suffers a Disability, or this Agreement is not renewed by the Company, then the
Company shall pay Executive or his estate (in the case of his death) any payment
which would be due and payable under Section 4(b)(ii) as if he had remained
employed by the Company throughout the end of FY2011.
(c) Other Benefits. Executive shall also be entitled to all rights and benefits
for which Executive may otherwise be eligible under any applicable bonus plan,
incentive agreement, stock option or equity incentive plan, participation or
extra compensation plan, pension plan, profit-sharing plan, life, medical,
dental, disability, or insurance plan or policy or other plan or benefit that
the Company may provide for Executive or (provided Executive is eligible to
participate therein) for employees of the Company generally, as from time to
time in effect, during the term of this Agreement.
(d) Perquisites. Executive shall be entitled to four (4) weeks paid vacation
each twelve-month period, which shall accrue on a pro rata basis from the date
employment commences under this Agreement. Vacation time will continue to accrue
so long as Executive’s total accrued vacation does not exceed eight (8) weeks.
Should Executive’s accrued vacation time reach eight weeks, Executive will cease
to accrue additional vacation until Executive’s accrued vacation time falls
below this level. All vacation time shall be subject to the plans, policies,
programs and practices as in effect generally with respect to other peer
employees of the Company.
5. Termination. This Agreement and all obligations hereunder (except the
obligations contained in Sections 7, 8, 9, 10 and 11 (Confidential Information,
Inventions and Patents, Non-Competition, No Solicitation of Customers, and
Noninterference with Employees) which shall survive any termination hereunder)
shall terminate on the end of the Term or upon the earliest to occur of any of
the following:
(a) Voluntary Termination. Executive’s employment shall terminate upon the
voluntary termination by Executive or retirement from the Company in accordance
with the normal retirement policies of the Company. In such instance, all
obligations hereunder to Executive (or Executive’s heirs or legal
representatives) shall cease, other than for payment of the sum of
(i) Executive’s annual Base Salary through the date of termination and (ii) any
accrued vacation pay, in each case to the extent not theretofore paid (the sum
of the amounts described in clauses (i) and (ii) shall be hereinafter referred
to as the “Accrued Obligations”), which shall be paid to Executive or
Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
30 days after the date of termination or any earlier time required by applicable
law.

 

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(b) Death or Disability of Executive. Executive’s employment shall terminate
upon the death or Disability (as defined below) of Executive. In such instance,
except as set forth below or as provided in Section 4(b)(ii), all obligations
hereunder to Executive (or Executive’s heirs or legal representatives) shall
cease, other than for (i) payment of the sum of the Accrued Obligations, which
shall be paid to Executive or Executive’s estate or beneficiary, as applicable,
in a lump sum in cash within 30 days after the date of termination or any
earlier time required by applicable law; and (ii) payment to Executive or
Executive’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 Executive performing Executive’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 Executive or Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).
(c) Cause. The Company may terminate Executive’s employment and all of
Executive’s rights to receive Base Salary and any other 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:
(i) Willful misconduct by Executive, including, without limitation
(A) Executive’s material breach of any duties and responsibilities under this
Agreement (other than as a result of incapacity due to Executive’s disability),
(B) Executive’s commission of a material act of fraud upon the Company, or
(C) Executive’s immoderate use of alcoholic beverages or narcotics or other
substance abuse. For purposes of this Section 5(c), no act or failure to act on
the part of Executive shall be considered “willful” unless done, or omitted to
be done, by Executive in bad faith or without reasonable belief that Executive’s
action or omission was in the best interest of the Company;
(ii) Executive’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
(iii) Executive’s willful violation of any duty of loyalty to the Company or a
material breach of Executive’s fiduciary duties to the Company.
(d) Without Cause. Notwithstanding any other provision of this Agreement, the
Company may terminate Executive’s employment with the Company without cause at
any time, but in the event of such termination without Cause, Executive shall be
entitled to receive a lump sum payment equal to the sum of (i) Executive’s then
current monthly Base Salary for a period of twelve months, and (ii) funds equal
to the aggregate amount of the Company sponsored portion of Executive’s group
medical and dental insurance coverage for Executive and Executive’s spouse
and/or family (if applicable), as in place immediately before notice of the
termination, for a period of 18 months, as governed by the Consolidated Omnibus
Budget Reconciliation Act of 1984, as amended (“COBRA”), effective June 1, 2006.
The Company will provide Executive with a COBRA notice, which will include the
insurance premium rate information for coverage for Executive under COBRA. It
will be Executive’s responsibility and obligation to pay the applicable COBRA
premiums for such coverage. All payments set forth in this Section 5(d) shall be
paid on or before the earlier of 10 days after the date the termination occurs
or in compliance with applicable law.

 

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(e) Non-Renewal. In the event Executive is terminated pursuant to a notice of
non-renewal tendered by the Company to Executive then Executive shall be
entitled to receive payment equal to and on the same terms and conditions as
that paid to Executive under Section 5(d) hereof, except that all references to
twelve months in Section 5(d) shall be reduced to six months in the event of a
termination of Executive for non-renewal. In the event Executive is terminated
pursuant to a notice of non-renewal tendered by Executive to the Company then
such termination shall be treated as a voluntary termination by Executive
without Good Reason.
(f) Good Reason. In the event Executive voluntarily terminates Executive’s
employment pursuant to Section 5(a) hereof, and such termination is made by
Executive for Good Reason (as defined below), then Executive shall be entitled
to receive payment equal to and on the same terms and conditions as that paid to
Executive under Section 5(d) hereof; provided, however, that before Executive
may terminate his or her employment pursuant to this Section 5(f) and be
entitled to receive the payments set forth in Section 5(d), the Company shall
have the opportunity to remedy the conditions constituting Good Reason for a
period of 30 days after the receipt of written notice by Executive specifying
(in reasonable detail) the facts and circumstances for such Good Reason
termination and the corrective action Executive believes is required to remedy
such action; provided further, that such notice must be delivered in writing to
the Board hereunder no later than ninety (90) days after the time Executive
first becomes aware of the facts and circumstances giving rise to Executive’s
notice of Good Reason hereunder. For purposes of this Agreement “Good Reason”
shall be defined as any of the following:
(i) The material diminution of authority, duties or responsibilities of
Executive under this Agreement.
(ii) Any reduction by the Company to Executive’s Base Salary as in effect on the
date hereof or as the same may be increased from time-to-time.
(iii) The Company requiring Executive to be based at any office or location
which increases the distance from Executive’s home to the office or location by
more than 45 miles from the distance in effect at the beginning of the term of
this Agreement.
6. Business Expenses. During the term of this Agreement, to the extent that such
expenditures satisfy the criteria under the Internal Revenue Code for
deductibility by the Company (whether or not fully deductible by the Company)
for federal income tax purposes as ordinary and necessary business expenses, the
Company shall reimburse Executive promptly for reasonable business expenditures,
including travel, entertainment, parking, business meetings, and professional
dues, made and substantiated in accordance with the reasonable policies,
practices and procedures established from time to time by the Company generally
with respect to other peer employees and incurred in the pursuit and furtherance
of the Company’s business and goodwill. Such reimbursements shall be made in
accordance with Internal Revenue Code Section 409A, including the following
provisions: (i) the amount of any such expense reimbursement provided during one
of Executive’s tax years shall not affect any expenses eligible for
reimbursement in any other taxable year; (ii) the reimbursement of the eligible
expense shall be made no later than the last day of Executive’s tax year that
immediately follows the tax year in which the expense was incurred; and
(iii) Executive’s right to any reimbursement shall not be subject to liquidation
or exchange for another benefit or payment.

 

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7. Confidential Information. Executive acknowledges that the nature of
Executive’s engagement by the Company is such that Executive shall have access
to information of a confidential nature which has great value to the Company and
which constitutes a substantial basis and foundation upon which the business of
the Company is based. Such information includes financial, manufacturing and
marketing data, techniques, processes, formulas, developmental or experimental
work, work in process, methods, trade secrets (including, without limitation,
customer lists and lists of customer sources), or any other secret or
confidential information relating to the products, services, customers, sales or
business affairs of the Company or any of its subsidiaries (the “Confidential
Information”). Executive acknowledges that the Confidential Information
constitutes trade secrets of the Company. Executive shall keep all such
Confidential Information in confidence during the term of this Agreement and at
any time thereafter and shall not disclose any of such Confidential Information
to any other person, except to the extent such disclosure is (i) necessary to
the performance of this Agreement and in furtherance of the Company’s best
interests, (ii) required by applicable law, (iii) lawfully obtainable from other
sources, or (iv) authorized by the Company. Upon termination of Executive’s
employment with the Company, Executive shall deliver to the Company all
documents, records, notebooks, work papers, and all similar material containing
any of the foregoing information, whether prepared by Executive, the Company or
anyone else.
8. Inventions and Patents. Except as may be limited by Section 2870 of the
California Labor Code, all inventions, designs, improvements, patents,
copyrights and discoveries conceived by Executive during the term of this
Agreement which are useful in or directly or indirectly related to the business
of the Company or to any experimental work carried on by the Company, shall be
the property of the Company. Executive will promptly and fully disclose to the
Company all such inventions, designs, improvements, patents, copyrights and
discoveries (whether developed individually or with other persons) and shall
take all steps necessary and reasonably required to assure the Company’s
ownership thereof and to assist the Company in protecting or defending the
Company’s proprietary rights therein.
Executive acknowledges hereby receipt of written notice from the Company
pursuant to California Labor Code Section 2872 that this Agreement (to the
extent it requires an assignment or offer to assign rights to any invention of
Executive) does not apply fully to an invention which qualifies fully under
California Labor Code Section 2870.
9. Non-Competition. Executive acknowledges that the Confidential Information
constitutes trade secrets of the Company, and Executive acknowledges that the
following is necessary to protect the Confidential Information: Executive agrees
that during the term of Executive’s employment, and for a period of 12 months
thereafter (or six months in the event his employment is terminated because the
Agreement is not renewed by the Company), Executive shall not, directly or
indirectly, whether as an owner, partner, shareholder, agent, employee,
creditor, consultant, or otherwise, promote, participate or engage in any
activity or other business competitive with the business of the Company or any
of its subsidiaries in any jurisdiction in which the Company or any of its
subsidiaries operates at the time of such termination if such activity or other
business involves any use by the Executive of any of the Confidential
Information.

 

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10. Non-Solicitation of Customers. Executive acknowledges that the Confidential
Information constitutes trade secrets of the Company, and Executive acknowledges
that the following is necessary to protect the Confidential Information:
Executive agrees that for a period of 12 months after the termination of
employment with the Company or any of its subsidiaries (or six months in the
event his employment is terminated because the Agreement is not renewed by the
Company), Executive will not, on behalf of Executive or on behalf of any other
individual, association or entity, call on any of the customers of the Company
or any of its subsidiaries for the purpose of soliciting or inducing any of such
customers to acquire (or providing to any of such customers) any product or
service provided by the Company or any of its subsidiaries, nor will Executive
in any way, directly or indirectly, as agent or otherwise, in any other manner
solicit, influence or encourage such customers to take away or to divert or
direct their business to Executive or any other person or entity by or with
which Executive is employed, associated, affiliated or otherwise related.
11. Noninterference with Employees. Executive acknowledges that the Confidential
Information constitutes trade secrets of the Company, and Executive acknowledges
that the following is necessary to protect the Confidential Information:
Executive agrees that during the term hereof and for a period of 12 months
thereafter (or six months in the event his employment is terminated because the
Agreement is not renewed by the Company), Executive will not, directly or
indirectly, solicit any employee of the Company or any of its subsidiaries to
leave such employment.
12. Remedies. The parties hereto agree that the services to be rendered by
Executive pursuant to this Agreement, and the rights and privileges granted to
the Company pursuant to this Agreement, are of a special, unique, extraordinary
and intellectual character, which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and that a breach by Executive of any of the terms of this Agreement will cause
the Company great and irreparable injury and damage. Executive hereby expressly
agrees that the Company shall be entitled to the remedies of injunction,
specific performance and other equitable relief to prevent a breach of this
Agreement by Executive. This Section 12 shall not be construed as a waiver of
any other rights or remedies which the Company may have for damages or
otherwise.
13. Severability. If any provision of this Agreement is held to be unenforceable
for any reason, it shall be adjusted rather than voided, if possible, to achieve
the intent of the parties to the extent possible. In any event, all other
provisions of this Agreement shall be deemed valid and enforceable to the extent
possible.
14. Succession. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns and any such successor or assignee
shall be deemed substituted for the Company under the terms of this Agreement
for all purposes. As used herein, “successor” and “assignee” shall include any
person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires the stock of the
Company or to which the Company assigns this Agreement by operation of law or
otherwise. The obligations and duties of Executive hereunder are personal and
otherwise not assignable.

 

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15. Notices. Any notice or other communication provided for in this Agreement
shall be in writing and sent if to the Company to its principal executive office
at:

     
 
  Meade Instruments Corp.
27 Hubble
Irvine, California 92618
Phone: (949) 451-1450; Facsimile: (949) 451-1460
Attention: Chief Financial Officer

or at such other address as the Company may from time to time in writing
designate, and if to Executive at such address as Executive may from time to
time in writing designate. Each such notice or other communication shall be
effective (i) if given by telecommunication, when transmitted to the applicable
number so specified in (or pursuant to) this Section and a verification of
receipt is received, (ii) if given by mail, three days after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when actually delivered at such
address.
16. Entire Agreement. This Agreement contains the entire agreement and final
understanding of the parties relating to the subject matters hereof and shall
supersede and replace any prior agreements (including, without limitation, any
prior employment agreements), undertakings, negotiations, commitments, and
practices relating to Executive’s employment with the Company, whether written
or oral. Except as contained herein, any representation, promise or agreement
not specifically included in this Agreement shall not be binding upon or
enforceable against either party. This Agreement is an integrated agreement.
17. Amendments. No amendment or modification of the terms of this Agreement
shall be valid unless made in writing and duly executed by both parties.
18. Waiver. No failure on the part of any party to exercise or delay in
exercising any right hereunder shall be deemed a waiver thereof or of any other
right, nor shall any single or partial exercise preclude any further or other
exercise of such right or any other right.
19. Governing Law. This Agreement, and the legal relations between the parties,
shall be governed by and construed in accordance with the laws of the State of
California without regard to conflicts of law doctrines All actions or
proceedings under or relating to this Agreement will be resolved in a state or
federal court located in Orange County, California; provided, however, that in
the Company’s discretion, such an action may be heard in some other place
designated by it if necessary to acquire jurisdiction over third persons so that
the dispute can be resolved in one action. Each party hereby (i) agrees to
submit to the exclusive jurisdiction of the federal and state courts located in
Orange County, California, (ii) agrees to appear in any such action, (iii)
consents to the exclusive jurisdiction of such courts and (iv) waives any
objections it might have as to exclusive venue in any such court. Service of
process may be made in any action, suit or proceeding by mailing or delivering a
copy of such process to a party at its address and in the manner set forth in
Section 15.

 

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20. Waiver of Jury Trial.
THE COMPANY AND EMPLOYEE HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE EMPLOYMENT RELATIONSHIP BETWEEN THEM OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR SUCH RELATIONSHIP. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court or that relate to the subject matter of this
Agreement, including without limitation, contract claims, tort claims, breach of
duty claims, wrongful termination claims, claims for discharge in violation of
public policy, claims of discrimination and all other common law and statutory
claims, to the maximum extent permitted by law. The Company and Executive each
acknowledge that this waiver is a material inducement to enter into this
Agreement, that each has already relied on the waiver in entering into this
Agreement, and that each will continue to rely on the waiver in their related
future dealings. THE COMPANY AND EMPLOYEE FURTHER WARRANT AND REPRESENT THAT
EACH HAS HAD AN OPPORTUNITY TO REVIEW THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING SUCH
OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT MODIFICATIONS TO OR EXTENSIONS OF THIS AGREEMENT. In the event
of arbitration or litigation, this Agreement may be filed as a written consent
to arbitration or to a trial by the court.
21. Arbitration. As a material inducement to enter into this Agreement,
Executive and the Company each hereby agree that any “Claims” or “Controversies”
(as defined below) arising out of or in respect to this Agreement (or its
validity, interpretation or enforcement), or Executive’s employment or
termination, that Executive may have against the Company or it officers,
directors, employees, or agents, in their capacity as such, or that the Company
may have against Executive, shall be resolved solely through binding
arbitration. Executive and the Company each hereby acknowledge that this
agreement to arbitrate means that Executive and the Company are relinquishing
his/her/its rights to either a jury trial or court trial for the resolution of
any claims that Executive and the Company may have against the other.
“Claims” or “Controversies” arising out of this Agreement or Executive’s
employment or termination means and includes all claims for breach of this
Agreement, harassment and/or discrimination (including sexual harassment and
harassment or discrimination based on race, color, religion, age, sex, sexual
orientation, ancestry, national origin, marital status, military service,
pregnancy, physical or mental disability, medical condition or any other
protected class or condition), breach of any contract or covenant (express or
implied), tort claims, wrongful termination, whistle-blowing and all other
claims relating to this Agreement or Executive’s employment or termination,
except that claims covered by the Workers’ Compensation Act and claims for
unemployment benefits are not covered by this agreement to arbitrate.

 

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All Claims or Controversies shall be submitted to a single neutral arbitrator.
The arbitration shall take place in Orange County, California, unless otherwise
mutually agreed. The arbitrator shall be mutually agreed-upon by Executive and
the Company. If Executive and the Company cannot agree upon an arbitrator, the
selection process shall be governed by the employment arbitration rules and
procedures of the American Arbitration Association (“AAA”). Regardless of the
arbitrator chosen, the arbitration proceedings shall be governed by the then
current AAA procedural rules, except that if a contrary rule exists: (1) all
monetary or provisional remedies available under applicable state or federal
statutory law or common law will remain available to both parties; (2) except as
mutually agreed upon by the parties, there will be no limitation on discovery
beyond that which exists in cases litigated in Orange County Superior Court; and
(3) the California Rules of Evidence shall apply to the arbitration hearing. In
connection with any arbitration proceeding commenced hereby, the prevailing
party shall be entitled to reimbursement of its reasonable attorney’s fees and
costs, including arbitrator fees. This agreement to arbitrate and arbitration
procedure is intended to be the exclusive method of resolving all Claims or
Controversies as described above between Executive and the Company and judgment
upon the award rendered by the arbitrator hereunder may be entered in any court
having jurisdiction thereof.
22. Withholding. All compensation payable hereunder, including salary and other
benefits, shall be subject to applicable taxes, withholding and other required,
normal or elected employee deductions.
23. Counterparts. This Agreement and any amendment hereto may be executed in one
or more counterparts. All of such counterparts shall constitute one and the same
agreement and shall become effective when a copy signed by each party has been
delivered to the other party.
24. Headings. Section and other headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
25. Drafting. The parties hereto each hereby waives the benefit of any statute
or rule of law or judicial decision, which would otherwise require that the
provisions of this Agreement be construed or interpreted most strongly against
the party responsible for the drafting thereof.
26. Compliance with Section 409A.
(a) Generally. The Company and Executive each acknowledge and agree that it is
intended that any amounts payable hereunder as well as the Company’s and
Executive’s exercise of authority or discretion hereunder shall either be exempt
from or comply with Section 409A of the Internal Revenue Code of 1986 (the
“Code”), as amended (including the Treasury regulations and other published
guidance relating thereto) (“Section 409A”) so as not to subject Executive to
payment of any interest or additional tax imposed under Section 409A. To the
extent that any amount payable under this Agreement would trigger the additional
tax imposed by Section 409A, this Agreement shall be modified to avoid such
additional tax yet preserve (to the nearest extent reasonably possible) the
intended benefit payable to Executive.

 

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(b) Specified Employee. Notwithstanding anything to the contrary in this
Agreement, if Executive is a “specified employee” within the meaning of
Section 409A at the time of Executive’s termination of employment (other than
due to death), and the severance payable to Executive, if any, pursuant to this
Agreement, when considered together with any other severance payments or
separation benefits which may be considered deferred compensation under
Section 409A (together, the “Deferred Compensation Separation Benefits”) will
not and could not under any circumstances, regardless of when such termination
occurs, be paid in full the later of: (i) two and one-half (21/2) months
following the end of the Company’s taxable year in which such termination
occurs, or (ii) two and one-half (21/2) months following the end of Executive’s
taxable year in which such termination occurs, then only that portion of the
Deferred Compensation Separation Benefits which does not exceed the Section 409A
Limit (as defined below) may be made within the first six (6) months following
Executive’s termination of employment in accordance with the payment schedule
applicable to each payment or benefit. For these purposes, each severance
payment is hereby designated as a separate payment and will not collectively be
treated as a single payment. Any portion of the Deferred Compensation Separation
Benefits in excess of the Section 409A Limit shall accrue and, to the extent
such portion of the Deferred Compensation Separation Benefits would otherwise
have been payable within the first six (6) months following Executive’s
termination of employment, will become payable (without interest) on the first
payroll date that occurs on or after the date six (6) months and one (1) day
following the date of Executive’s termination. All subsequent Deferred
Compensation Separation Benefits, if any, will be payable in accordance with the
payment schedule applicable to each payment or benefit. Notwithstanding anything
herein to the contrary, if Executive dies following Executive’s termination of
employment but prior to the six (6) month anniversary of Executive’s
termination, then any payments delayed in accordance with this paragraph will be
payable (without interest) in a lump sum as soon as administratively practicable
after the date of Executive’s death and all other Deferred Compensation
Separation Benefits will be payable in accordance with the payment schedule
applicable to each payment or benefit.
(c) Section 409A Limit. For purposes of this Agreement, “Section 409A Limit”
will mean the lesser of two (2) times: (i) Executive’s annualized compensation
based upon the annual rate of pay paid to Executive during Executive’s taxable
year preceding the taxable year of Executive’s termination of employment as
determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (ii) the maximum amount
that may be taken into account under a qualified plan pursuant to Section
401(a)(17) of the Code for the year in which Executive’s termination of
employment occurs.
(d) Separation From Service. For purposes of this Agreement, references to
termination of Executive’s employment shall mean “separation from service,”
within the meaning of Section 409A(a)(2)(A)(i) of the Code.

 

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

            MEADE INSTRUMENTS CORP.
      By:   /s/ John A. Elwood       John A. Elwood        Chief Financial
Officer       
EMPLOYEE
      /s/ Steven Murdock    
Steven Murdock
    (ADDRESS)              

 

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