Exhibit 10.127


 


MEADE INSTRUMENTS CORP.


 


STAND-ALONE STOCK OPTION AGREEMENT


 


THIS STAND-ALONE STOCK OPTION AGREEMENT (this “Agreement”) dated as of
the 13th day of March, 2009 by and between Meade
Instruments Corp., a Delaware corporation (the “Company”), and Steven G.
Murdock (the “Optionee”).


 


R E C I T A L S


 


WHEREAS, the Optionee has been employed by the Company
pursuant to that certain Employment Agreement dated as of March 11, 2009
(the “Employment Agreement”);


 


WHEREAS, the Company has granted to the Optionee, subject to
stockholder approval at the Company’s 2009 Annual Meeting of Stockholders, a
nonqualified stock option to purchase all or any part of 750,000 shares of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), subject
to and upon the terms and conditions set forth herein;


 


NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:


 


1.                                       Grant of Option. 
This Agreement evidences the Company’s grant to the Optionee of the
right and option to purchase, subject to and on the terms and conditions set
forth herein, and subject to stockholder approval at the Company’s 2009 Annual
Meeting of Stockholders, all or any part of 750,000 shares of the Company’s
Common Stock (the “Shares”) at the price of $0.22 per Share (the “Option”),
exercisable from time to time, subject to the provisions of this Agreement,
prior to the close of business on the day before February 5, 2019 (the “Expiration
Date”), unless earlier terminated pursuant to Section 8.


 


2.                                       Exercisability of Option. 
Subject to Section 1 and Section 8.2 hereof, the Option shall
become exercisable in 25% increments on the following dates:  May 5, 2009; August 5, 2009, November 5,
2009; and February 5, 2010.  If the
Optionee does not purchase all or any part of the Shares on the date on which
the Optionee first becomes entitled to so purchase, the Optionee has the right
cumulatively thereafter to purchase any Shares not so purchased and such right
shall continue until the Option terminates or expires.  The Option shall only be exercisable in
respect of whole Shares, and fractional Share interests shall be
disregarded.  The Option may only be
exercised as to at least one-hundred (100) Shares unless the number purchased
is the total number at the time available for purchase under the Option.


 


3.                                       Method of Exercise of Option. 
The Option shall be exercisable by the delivery to the Secretary of the
Company of a written notice stating the number of Shares to be purchased
pursuant to the Option and accompanied by (i) delivery of an executed
Exercise Agreement in the form attached hereto as Exhibit A, (ii) payment
of the full purchase price of the Shares to be purchased, and (iii) payment
in full of any tax withholding obligation under federal, state or local
law.  Payment shall be made in one or a
combination of the following methods: (i) in cash or by


 

















 


electronic funds
transfer; (ii) by check payable to the order of the Company; (iii) by
notice and third party payment in such manner as may be authorized by the
Board; or (iv) by the delivery of 
shares of Common Stock of the Company already owned by the Optionee,
provided, however, that the Board may in its absolute discretion limit the
Optionee’s ability to exercise the Option by delivering such shares, and
provided further that any shares delivered which were initially acquired upon
exercise of a stock option must have been owned by the Optionee at least six
months as of the date of delivery. 
Shares of Common Stock used to satisfy the exercise price of the Option
shall be valued at their fair market value on the date of exercise.


 


4.                                       Tax Withholding. 
Upon any exercise of the Option, the Company shall have the right at its
option to (i) require the Optionee (or personal representative or
beneficiary, as the case may be) to pay or provide for payment of the amount of
any taxes which the Company may be required to withhold with respect to the
Option or (ii) deduct from any amount payable in cash the amount of any
taxes which the Company may be required to withhold with respect to such cash
payment.  In any case where a tax is
required to be withheld in connection with the delivery of shares of Common
Stock, the Board may in its sole discretion grant to the Optionee the right to
elect, pursuant to such rules and subject to such conditions as the Board
may establish, to have the Company reduce the number of shares to be delivered
by (or otherwise reacquire) the appropriate number of shares valued at their
then fair market value to satisfy such withholding obligation.


 


5.                                       Restrictions on Shares. 
The Certificate of Incorporation and Bylaws of the Company, as either of
them may be amended from time to time, may provide for restrictions with
respect to the Common Stock.  To the
extent that these restrictions and limitations are greater than those set forth
in this Agreement, such restrictions and limitations shall apply to any
securities acquired upon exercise of the Option and are incorporated herein by
this reference.


 


6.                                       No Transferability; Limited Exception to
Transfer Restrictions.


 


6.1                                 Limit on Exercise and Transfer. 
Unless otherwise expressly provided in (or pursuant to) this Section 6
or by applicable law (i) the Option is non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; the Option shall be exercised only by the
Optionee; and (ii) amounts payable or shares issuable pursuant to the
Option shall be delivered only to (or for the account of) the Optionee.


 


6.2                                 Exceptions.  The Board may
permit the Option to be exercised by and paid only to certain persons or entities
related to the Optionee, including but not limited to members of the Optionee’s
family, charitable institutions, or trusts or other entities whose
beneficiaries or beneficial owners are members of the Optionee’s family and/or
charitable institutions, or to such other persons or entities as may be
approved by the Board, pursuant to such conditions and procedures as the Board
may establish.  Any permitted transfer
shall be subject to the condition that the Board receive evidence satisfactory
to it that the transfer is being made for estate and/or tax planning purposes
on a gratuitous or donative basis and without consideration (other than nominal
consideration).


 


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6.3                                 Further Exceptions to Limits on Transfer. 
The exercise and transfer restrictions in this Section 6 shall not
apply to:


 


(i)                                     transfers to the Company,


 


(ii)                                  the designation of a beneficiary to
receive benefits in the event of the Optionee’s death or, if the Optionee has
died, transfers to or exercise by the Optionee’s beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will or the laws of
descent and distribution,


 


(iii)                               transfers pursuant to a qualified domestic relations
order if approved or ratified by the Board,


 


(iv)                              if the Optionee has suffered a
disability, permitted transfers or exercises on behalf of the Optionee by his
or her legal representative, or


 


(v)                                 the authorization by the Board of “cashless
exercise” procedures with third parties who provide financing for the purpose
of (or who otherwise facilitate) the exercise of the Option consistent with
applicable laws and the express authorization of the Board.


 


7.                                       No Employment Contract. 
Nothing contained in this Agreement shall confer upon the Optionee any
right to continue in the employ or other service of the Company or any of its
subsidiaries, nor constitute any contract or agreement of employment or other
service, nor shall interfere in any way with the right of the Company to change
the Optionee’s compensation or other benefits or to terminate the employment of
the Optionee, with or without cause; provided, however, that nothing contained
in this Agreement shall adversely affect any independent contractual right of
the Optionee without his or her consent thereto.


 


8.                                       Adjustment and Termination upon Certain
Events.


 


8.1                                 Adjustments. 
If there shall occur any extraordinary dividend or other extraordinary
distribution in respect of the Common Stock (whether in the form of cash,
Common Stock, other securities, or other property), or any reclassification,
recapitalization, stock split (including a stock split in the form of a stock
dividend), reverse stock split, reorganization, merger, combination,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Common Stock or other securities of the Company, or there shall occur any
similar, unusual or extraordinary corporate transaction or event in respect of
the Common Stock or a sale of substantially all the assets of the Company as an
entirety, then the Board shall, in such manner and to such extent (if any) as
it deems appropriate and equitable (1) proportionately adjust any or all
of (a) the number and type of shares of Common Stock (or other securities)
which thereafter may be made the subject of the Option, (b) the number,
amount and type of shares of Common Stock (or other securities or property)
subject to the Option, (c) the grant, purchase, or exercise price of the
Option, (d) the securities, cash or other property deliverable upon exercise
of the Option, or (e) the performance standards appropriate to the Option,
or (2) in the case of an extraordinary dividend or other distribution,
recapitalization, reclassification, merger, reorganization, consolidation,
combination, sale of assets, split up, exchange, or spin off, make provision
for a cash payment or for the substitution or exchange of the Option or the
cash, 


 


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securities or property
deliverable to the Optionee based upon the distribution or consideration
payable to holders of the Common Stock of the Company upon or in respect of
such event.  In any of such events, the
Board may take such action sufficiently prior to such event if necessary to permit
the Optionee to realize the benefits intended to be conveyed with respect to
the underlying shares in the same manner as is available to stockholders
generally.


 


8.2                                 Acceleration of Option.


 


(a)                                  Change in Control. 
Upon the occurrence of any of the following (each of which shall be
hereafter referred to as a “Change in Control Event”), the Option shall become
immediately exercisable in full:


 


(i)                                     Any dissolution or liquidation of the
Company in which there is a distribution to the stockholders of the Company;


 


(ii)                                  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);


 


(iii)                               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; or


 


(iv)                              Any ‘person’ (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended from time to time (the “Exchange Act”) but excluding any person
described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder)
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company’s then outstanding securities
entitled to then vote generally in the election of directors of the Company.


 


(b)                                 Certain Terminations of Employment. 
If Optionee’s employment is terminated by the Company without Cause (as
defined in the Employment Agreement) or is terminated by the Employee for Good
Reason (as defined in the Employment Agreement), then the Option shall become
immediately exercisable in full.


 


8.3                                 Possible Early Termination of Option. 
If the Option has been fully accelerated under Section 8.2 or has
otherwise become exercisable but is not exercised prior to or simultaneously
with (i) a dissolution of the Company, or (ii) an event described in Section 8.2(a) that
the Company does not survive, or (iii) the consummation of an event
described in Section 8.2(a) that results in a change of control
approved by the Board, the Option shall thereupon terminate, subject to any
provision that has been expressly made by the Board for the survival,
substitution, exchange or other settlement of the Option.


 


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8.4                                 Effect of Termination of Employment.


 


(a)                                  General.  Except as
provided in paragraphs (b), (c), (d) and (e) below, if the Optionee’s
employment by the Company terminates for any reason (the date of such
termination being referred to as the “Severance Date”), the Optionee shall
have, subject to earlier termination pursuant to or as contemplated by Section 1
or Section 8.3 hereof, three months after the Severance Date to exercise
the Option to the extent it shall have become exercisable on the Severance
Date.  In other cases, the Option, to the
extent not exercisable on the Severance Date, shall terminate.


 


(b)                                 Death or Disability. 
If the Optionee’s employment by the Company or any of its subsidiaries
terminates as a result of “), a “permanent and total disability” within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended from time to time, and such other disabilities, infirmities,
afflictions or conditions as the Board by rule may include (“Total
Disability”) or death, the Optionee, the Optionee’s personal representative or
his or her beneficiary, as the case may be, shall have, subject to earlier
termination pursuant to or as contemplated by Section 1 or Section 8.3
hereof, until 12 months after the Severance Date to exercise the Option to the
extent it shall have become exercisable by the Severance Date.  The Option to the extent not exercisable on
the Severance Date shall terminate.


 


(c)                                  Cause.  If the
Optionee’s employment by the Company is terminated for Cause (as defined in the
Employment Agreement), the Option shall terminate on the Severance Date.


 


(d)                                 Without Cause or Good Reason or
Expiration.  If (i) the Optionee’s employment is
terminated by the Company without Cause (as defined in the Employment
Agreement) or by the Optionee for Good Reason (as defined in the Employment
Agreement) or (ii) the term of the Employment Agreement expires without
renewal, then the Optionee shall have, subject to earlier termination pursuant
to or as contemplated by Section 1 or Section 8.3 hereof, one year
after the Severance Date to exercise the Option.


 


(e)                                  Board Discretion. 
Notwithstanding the foregoing provisions of this Section 8.4, in
the event, or in anticipation, of a termination of employment with the Company
for any reason, other than discharge for Cause, the Board may, in its
discretion, increase the portion of the Option available to the Optionee, or
the Optionee’s beneficiary or personal representative, as the case may be, or,
subject to the provisions of Section 1 hereof, extend the exercisability
period upon such terms as the Board shall determine and expressly set forth in
or by amendment to this Agreement.


 


9.                                       Shares to be Reserved. 
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of this Agreement.


 


10.                                 Assignment.  This
Agreement cannot be directly or indirectly assigned or transferred by the
Optionee in whole or in part without the prior written consent of the Company.


 


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11.                                 Notices.  Any notices,
demands or requests of any kind whatsoever hereunder shall be given in writing
and sent to the addresses set forth below or to such other address as either
party 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 11 and a
verification of receipt is received, (ii) if given by mail, three days
after such communication is deposited in the mail with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other means, when
actually delivered at such address.


 


12.                                 Waiver.  The parties
reserve the right to waive by mutual written consent for a specific period and
under specific conditions any provision of this Agreement, provided that such
waiver shall be limited to the period and conditions specified by mutual written
consent and shall in no way constitute a general waiver, or be considered as
evidence of any given interpretation of any provision so waived.


 


13.                                 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.


 


14.                                 Arbitration. 
As a material inducement to enter into this Agreement, to the fullest
extent allowed by law, any controversy, claim or dispute between Optionee and
the Company (and/or any of its owners, directors, officers, employees, agents,
or related entities) relating to or arising out of the terms of this Agreement
will be submitted to final and binding arbitration before a single neutral arbitrator
in Orange County, California for determination in accordance with the American
Arbitration Association’s (“AAA”) National Rules for the Resolution of
Employment Disputes, as the exclusive remedy for such controversy, claim or
dispute.  In any such arbitration, the
parties may conduct discovery to the same extent as would be permitted in a
court of law.  The arbitrator shall issue
a written decision, and shall have full authority to award all remedies which
would be available in court.  The Company
shall pay the arbitrator’s fees and any AAA administrative expenses.  Any judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.  Possible disputes covered by the above
include term or provision hereof, breach of contract, torts, violation of
public policy, discrimination, harassment, or any other related claims,
regardless of whether such dispute is initiated by Employee or the
Company.  Thus, this bilateral arbitration
agreement fully applies to any and all claims that the Company may have against
the Optionee in connection herewith.  BY
AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH EMPLOYEE AND THE COMPANY
GIVE UP ALL RIGHTS TO TRIAL BY JURY. 
This bilateral arbitration agreement is to be construed as broadly as is
permissible under relevant law.  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.


 


15.                                 Titles.  Titles and
paragraph headings are for reference purposes only and are not to be considered
a part of this Agreement.


 


16.                                 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.


 


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17.                                 Entire Agreement. 
The parties hereto acknowledge that each has read this Agreement,
understands it, and agrees to be bound by its terms.  The parties further agree that this
Agreement, the Employment Agreement and any modifications made pursuant hereto
and thereto constitute the complete and exclusive written expression of the
terms of the agreement between the parties, and supercede all prior or
contemporaneous proposals, oral or written, understandings, representations,
conditions, warranties, covenants, and all other communications between the
parties relating to the subject matter of this Agreement.  The parties further agree that this Agreement
may not in any way be explained or supplemented by a prior or existing course
of dealings between the parties, by any usage of trade or custom, or by any
prior performance between the parties pursuant to this Agreement or otherwise.


 


18.                                 Counterparts. 
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and
the same instrument.


 


19.                                 Compliance With Laws. 
Notwithstanding anything else contained herein to the contrary, this
Agreement, the granting and vesting of the Option and the offer, issuance and
delivery of Shares under this Agreement are subject to compliance with all
applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities laws and federal margin
requirements) and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith.  Any
securities delivered in respect of this Agreement will be subject to such
restrictions, and to any restrictions the Company may require to preserve a
pooling of interests under generally accepted accounting principles, and the
person acquiring such securities will, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements.


 


IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
on its behalf by a duly authorized officer and the Optionee has hereunto set
his or her hand.


 


	
   

  	
  MEADE
  INSTRUMENTS CORP., a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/John A.
  Elwood

  
	
   

  	
   

  	
  John A. Elwood

  
	
   

  	
   

  	
  Vice President —
  Finance and Chief

  Financial Officer

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
  /s/Steven G.
  Murdock

  
	
   

  	
  Steven G.
  Murdock

  



 


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EXHIBIT A


 


MEADE INSTRUMENTS CORP.


 


EXERCISE AGREEMENT


 


THIS EXERCISE AGREEMENT (this “Agreement”) dated as of the
         day of
                        ,
        , by and between Meade
Instruments Corp., a Delaware corporation (the “Company”), and
                                    
(the “Purchaser”).


 


R E C I T A L S


 


WHEREAS, the Company has granted to the Purchaser a
nonqualified stock option (the “Option”) to purchase all or any part of a
designated amount of authorized but unissued shares of common stock of the
Company and, in connection therewith, the Company and the Purchaser entered
into that certain Stand-Alone Stock Option Agreement dated as of the
         of February, 2009 (the “Option
Agreement”) of which this Agreement is a part and into which this Agreement is
incorporated;


 


WHEREAS, the Purchaser desires to exercise the Option and
purchase from the Company and the Company wishes to issue and sell to the
Purchaser
                  
shares of its common stock, par value $0.01 per share (the “Common Stock”), to
be sold at a price of $0.22 per share, in accordance with and subject to the
terms and conditions set forth in this Agreement.


 


NOW, THEREFORE, in consideration of the above premises and the
representations, warranties, covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:


 


1.                                       Purchase and Sale of Common Stock. 
The Company shall deliver to the Purchaser a stock certificate
representing the shares of Common Stock against delivery to the Company by the
Purchaser of the purchase price in the sum of
$                    
(which represents the product of the $0.22 price per share and the number of
shares, the “Purchase Price”).


 


2.                                       Restrictions on Shares. 
The shares of Common Stock acquired pursuant to Section 1 hereof
are subject to, and the Purchaser agrees to be bound by, the provisions of
Sections 5, 6 and 19 of the Option Agreement, incorporated herein by this
reference.


 


3.                                       Miscellaneous. 
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of California.  This Agreement and the Option Agreement
together constitute the entire agreement and supersede all prior understandings
and agreements, written or oral, of the parties hereto with respect to the
subject matter hereof.  This Agreement
may be amended by mutual agreement of the parties.  Such amendment must be in writing and signed
by the Company.  The Company may, however,
unilaterally waive any provision hereof in writing to the extent such waiver
does not adversely affect the interests of the Purchaser hereunder, but no such
waiver shall operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision hereof.


 


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


 


	
   

  	
  MEADE
  INSTRUMENTS CORP.,
  a

  
	
   

  	
  Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Steven G.
  Murdock

  



 


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