Document:

Exhibit 10.1

 

Amendment to Employment Agreement

 

THIS
AMENDMENT (“Amendment”), dated as of December 31, 2008,
to the Employment Agreement, dated as of July 1, 2000 and amended as of July 1,
2002 and  November 16, 2005 (the
“Agreement”), between The Estée Lauder Companies Inc., a Delaware corporation
(“the “Company”), and Leonard A. Lauder, a resident of (omitted) (the
“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Executive
and the Company are parties to the Agreement; and

 

WHEREAS, the Company and
the Executive wish to amend the Agreement to comply with Section 409A of
the Internal Revenue Code and the regulations promulgated thereunder as set
forth herein;

 

NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and obligations hereinafter
set forth, the parties hereto, intending to be legally bound, hereby agree to
amend the Agreement as follows:

 

1.               Amendments.

 

A.           Section 3(a) of
the Agreement shall be deleted and shall read in its entirety as follows:

 

Base Salary.
As compensation for all services to be rendered pursuant to this Agreement and
as payment for the rights and interests granted by the Executive hereunder, the
Company shall pay or cause any of its subsidiaries to pay the Executive a base
salary (the “Base Salary”) of $ 1,440,000. 
Subject to Section 5(i) of
this Agreement, all amounts of Base Salary provided for hereunder shall be
payable in accordance with the regular payroll policies of the Company in
effect from time to time.

 

B.             Section 3(b) of
the Agreement shall be amended by deleting the last sentence and replacing it
with the following:

 

Any bonus opportunities granted to the Executive shall be at the
discretion of the Compensation Committee. 
All such opportunities shall be subject to the terms and conditions of
the Bonus Plan, which are incorporated herein by reference; provided, however,
except that with respect to bonuses deferred in accordance with Section 3(d) hereof
and as otherwise indicated under Section 5, the bonus payout with respect
to any fiscal year shall be paid to Executive no later than the 15th day of the
third month following the end of such fiscal year.

 

C.             Section 3(d) of
the Agreement shall be deleted and shall read in its entirety as follows:

 

(d) Deferral.

 

(i)  Deferral
Elections—In General.  The Executive
may elect to defer payment of all or any part of any incentive bonus
compensation payable under 

 

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Section 3(b) by making an election, in a
manner prescribed by the Company, on or before December 31 of the calendar
year before the Contract Year begins (or such earlier date as may be necessary
to comply with the applicable tax laws and regulations).

 

(ii)  Deferral
Elections—Performance-Based Compensation. 
For any incentive bonus compensation that qualifies as performance-based
compensation under Treas. Reg. Section 1.409A-1(e) and is based upon
a performance period of at least twelve (12) months, the Executive may make a
deferral election at any time before the date that is six (6) months before
the applicable performance period ends, but only if (i) the incentive
bonus compensation is not readily ascertainable when the election is made and (ii) the
service provider has performed services continuously from the later of the
beginning of the performance period or the date the performance criteria are
established.

 

(iii)  Amounts
Subject to Section 162(m).  If
any amount of Base Salary, any amount payable under the Bonus Plan, or any
other amount payable to the Executive is not currently deductible under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Code”), or like or
successor provisions (a “Non-Deductible Amount”), the Company will defer
payment of the Non-Deductible Amount until section 162(m) no longer
applies to the Executive.  Any amounts so
deferred will be credited to a bookkeeping account in the name of the Executive
as of the date scheduled for payment (the “Deferred Compensation
Account”).  The Deferred Compensation
Account will be credited with interest as of each June 30 during the term
of deferral, compounded annually, at an annual rate equal to the annual rate of
interest announced by Citibank N.A. in New York, New York as its base rate in
effect on such June 30, but limited to a maximum annual rate of 9%.

 

(iv)  Payment of
Amounts Deferred and Vested On or Before December 31, 2004.  Amounts credited to the Executive’s Deferred
Compensation Account on or before December 31, 2004, and any subsequently
credited interest, will be paid in cash to the Executive (or the Executive’s
designated beneficiary if the Executive dies before payment)  subject to applicable withholding taxes.  The Company will choose the payment date,
which will be no later than 90 days after Executive’s employment with the
Company terminates, unless the Executive requests before terminating a later
payment date or dates and the Company agrees to the request.

 

(v)  Payment of
Amounts Deferred and Vested After December 31, 2004.  Subject to Section 5(i), amounts
credited to the Executive’s Deferred Compensation Account after December 31,
2004 will be paid to the Executive (or the Executive’s designated beneficiary
if the Executive dies before payment), subject to applicable withholding taxes
on, or as soon as practicable after, the date the Executive separates from
service with the Company (as defined in Treas. Reg. section 1.409A-1(h)).  The Non-Deductible Amount will be paid at the
earliest date at which the Company reasonably expects that the deduction will
not be limited or eliminated by Code section 162(m).  The Company, in its sole discretion, may
provide an investment facility for all or a portion of such deferred amounts,
but is not required to do so.

 

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(vi)  For purposes
of clarity, the provisions of this Section 3(d) do not apply to the
arrangement referred to in Section 3(e).

 

D.            Section 4(b) of
the Agreement shall be amended by adding the following sentence to the end of
such section:

 

Such
reimbursement shall generally occur within seventy-five (75) days after the end
of the calendar year of presentment, provided that such presentment occurs
within ninety (90) days after the date the related expense were incurred.

 

E.              Section 5(a) of
the Agreement shall be deleted and shall read in its entirety as follows:

 

(a) Permanent Disability. 
In the event of the “permanent disability” (as hereinafter defined) of
the Executive during the Term of Employment, the Company shall have the right,
upon written notice to the Executive, to terminate the Executive’s employment
hereunder, effective upon the giving of such notice (or such later date as
shall be specified in such notice).  In
the event of such termination, the Company shall have no further obligations
hereunder, except that the Executive shall be entitled (i) to receive any
amounts or benefits to which the Executive may otherwise have been entitled to
hereunder prior to the effective date of termination; (ii) to be paid his
Base Salary under Section 3(a) hereof for a period of two (2) years
from the effective date of termination (the “Disability Continuation Period”); provided,
however, that the Company shall only be required to pay that amount of
the Executive’s Base Salary which shall exceed payments, if any, to the
Executive under pension or long-term disability plans of the Company; and (iii) to receive bonus compensation during the
Disability Continuation Period  at an
annual rate equal to the average of actual bonuses paid or payable to Executive
during the Term of Employment in accordance with Section 3(b) hereof,
or, if no such bonus has been paid or is payable as of the date of such
termination, at an annual rate equal to his Base Salary under Section 3(a) hereof
(the “Calculated Bonus Rate”).    In
addition, upon termination for permanent disability, the Executive shall
continue to participate, to the extent permitted by applicable law and
regulations and the applicable benefit plan, program or arrangement, in any and
all healthcare, life insurance and accidental death and dismemberment insurance
benefit plans, programs or arrangements of the Company during the Disability
Continuation Period (disregarding any required delay in payments under Section 5(i)).
Thereafter, the Executive’s rights to participate in such programs and plans,
or to receive similar coverage, if any, shall be as determined under such
programs. Because continued participation in any qualified pension and
qualified retirement savings plans of the Company is not permitted during the
Disability Continuation Period, the Company shall provide to the Executive,
subject to Section 5(i), cash payments, to be paid in accordance with Section 5(i)(ii),
equal to the sum of (x) the maximum qualified defined contribution
retirement savings plan match for pre-tax and after-tax contributions allowable
by the plan and by applicable laws and regulations for each year during the
Disability Continuation Period (or other period as expressly provided herein),
and (y) the excess of the benefit that would have been received by the
Executive had he been credited with additional years of age and service equal
to the Disability Continuation Period (or other period as expressly provided
herein) over the actual benefit to which the Executive is entitled, in each
case, under any and all qualified and non-qualified defined 

 

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benefit pension plans and qualified defined contribution retirement
savings plans in which the Executive participates as of the date of termination
of employment, calculated as of and based upon the Executive’s date of
termination (such sum, the “Pension Replacement Payment”).  Notwithstanding the above, any amounts
payable under this Section 5(a) that are separation pay as described
under Treas. Reg. §1.409A-1(b)(9)(iii)(A) shall be paid no later than December 31
of the second calendar year following the year in which the Executive’s
termination for permanent disability occurs; any amounts payable under this Section 5(a) that
are not otherwise exempt from Code section 409A are subject to, and payable in
accordance with, Section 5(i) of this Agreement.  Except as otherwise provided in this Section 5(a),
the Company will have no further obligations under Sections 3 and 4 hereof or
otherwise.  For purposes of this
paragraph, “permanent disability” means any disability as defined under the
Company’s applicable disability insurance policy or, if no such policy is
available, any physical or mental disability or incapacity that renders the
Executive incapable of performing the services required of him in accordance
with his obligations under Section 2 hereof for a period of six (6) consecutive
months or for shorter periods aggregating six (6) months during any
twelve-month period.

 

F.              Section 5(d) of
the Agreement shall be deleted and shall read in its entirety as follows:

 

(d) Termination
Without Cause.  The Company shall have the right, upon sixty
(60) days’ prior written notice given to the Executive, to terminate the
Executive’s employment for any reason whatsoever (excluding for Cause (as defined
below)).  In the event of such
termination, the Company shall have no further obligations hereunder, except
that the Executive shall be entitled to (i) to receive any amounts or
benefits to which the Executive may otherwise have been entitled to hereunder
prior to the effective date of termination; (ii) receive as damages for a
period ending on a date three (3) years from the date of termination
without Cause, to be paid in accordance with Section 5(i)(ii), (A) Base
Salary as established under and in accordance with Section 3(a) hereof
and (B) bonus compensation at the Calculated Bonus Rate, to be paid in
accordance with Section 5(i)(ii);
and (iii) participate for a period ending on a date three (3) years
from the date of termination without Cause (the “Without Cause Continuation
Period”), to the extent permitted by applicable law and regulations and the
applicable benefit plan, program or arrangement, in any and all healthcare,
life insurance and accidental death and dismemberment insurance benefit plans,
programs or arrangements, on terms identical to those applicable to full-term
senior officers of the Company.  Because
continued participation in any qualified pension and qualified retirement
savings plans of the Company is not permitted during the Without Cause
Continuation Period, the Company shall provide to the Executive, subject to Section 5(i),
cash payments, to be paid in accordance with Section 5(i)(ii), equal to
the Pension Replacement Payment (as defined in Section 5(a)) with respect
to the Without Cause Continuation Period. 
Notwithstanding the above, any amounts payable under this Section 5(d) that
are separation pay as described under Treas. Reg. §1.409A-1(b)(9)(iii)(A) shall
be paid no later than December 31 of the second calendar year following
the year in which the Executive’s termination pursuant to this Section 5(d) occurs;
any amounts payable under this Section 5(d) that are not otherwise
exempt from Code section 409A are subject to, and payable in accordance with, Section 5(i) of
this Agreement. Except as otherwise provided in this Section 5(d), the
Company will have no further obligations under Sections 3 and 4 hereof or 

 

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otherwise.  In the event of termination pursuant to this Section 5(d),
the Executive shall not be required to mitigate his damages hereunder.

 

G.             Section 5(f) of
the Agreement shall be deleted and shall read in its entirety as follows:

 

(f)                                    Change
of Control.

 

(i)                                     Definitions.  For purposes of this Agreement,

 

(A) a “Change of
Control” shall be deemed to have occurred upon any of the following events:

 

(1)  a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14(A) promulgated
under the Securities Exchange Act of 1934, as amended; or

 

(2)  during any period of two (2) consecutive years, the
individuals who at the beginning of such period constitute the Company’s Board
of Directors or any individuals who would be “Continuing Directors” (as defined
below) cease for any reason to constitute a majority thereof; or

 

(3)  the Company’s Class A Common Stock shall cease to be
publicly traded; or

 

(4)  the Company’s Board of Directors shall approve a sale of all
or substantially all of the assets of the Company, and such transaction shall
have been consummated; or

 

(5)  the Company’s Board of Directors shall approve any merger,
exchange, consolidation, or like business combination or reorganization of the
Company, the consummation of which would result in the occurrence of any event
described in Section 5(f)(i)(A)(2) or (3) above, and such
transaction shall have been consummated.

 

Notwithstanding
the foregoing, (X) changes in the relative beneficial ownership among
members of the Lauder family and family-controlled entities shall not, by
itself, constitute a Change of Control of the Company, (Y) any spin-off of
a division or subsidiary of the Company to its stockholders  shall not constitute a Change of Control of
the Company.

 

(B)  “Continuing
Directors” shall mean (1) the directors in office on December 31,
2008 and (2) any successor to such directors and any additional director
who after December 31, 2008 was nominated or selected by a majority of the
Continuing Directors in office at the time of his or her nomination or
selection.

 

(C)  “Good Reason”
means the occurrence of any of the following, without the express written
consent of the Executive, after the occurrence of a Change in Control:

 

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(1)  (a) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the Executive’s position,
authority or responsibilities as contemplated by Section 2 hereof, or (b) any
other material adverse change in such position, including title, authority or
responsibilities;

 

(2)  any failure by the Company to comply with any provisions of
Sections 3 or 4 hereof, other than an insubstantial or inadvertent failure
remedied by the Company promptly after receipt of notice thereof given by the
Executive ;

 

(3)  the Company’s requiring the Executive to be based at any
office or location more than fifty (50) miles from that location at which he
performed his services specified under the provisions of Section 2
immediately prior to the Change in Control, except for travel reasonably
required in the performance of the Executive’s responsibilities; or

 

(4)  any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by Section 13,
unless such assumption occurs by operation of law.

 

(ii)                                  Termination for Good Reason. 
Following the occurrence of a Change of Control, the Executive may
terminate his employment for Good Reason. 
Such termination shall be deemed to be a termination without Cause and
shall be controlled by the provisions of Section 5(d) and Section 5(i) hereof,
including the required delay in payment for the six-month period following the
date of termination for any amounts determined to be subject to Code section
409A, as described in Section 5(i). 
Except as otherwise provided in this Section 5(f)(ii), the Company
will have no further obligations under Sections 3 and 4 or otherwise.

 

H.            A new Section 5(i) shall
be added to the Agreement and shall read in its entirety as follows:

 

(i)                               Section 409A of the Code.  (i) It
is the intention of the parties to this Agreement that no payment or
entitlement pursuant to this Agreement will give rise to any adverse tax
consequences to the Executive under Section 409A of the Code and
Department of Treasury regulations and other interpretive guidance issued
thereunder, including that issued after the date hereof (collectively, “Section 409A”).  The Agreement shall be interpreted to that
end and, consistent with that objective and notwithstanding any provision
herein to the contrary, the Company may unilaterally take any action it deems
necessary or desirable to amend any provision herein to avoid the application
of or excise tax under Section 409A. 
Further, no effect shall be given to any provision herein in a manner
that reasonably could be expected to give rise to adverse tax consequences
under that provision.  The Company shall
from time to time compile a list of “specified employees” as defined in, and
pursuant to, Treas. Reg. Section 1.409A-1(i).  Notwithstanding any other provision herein,
if the Executive is a specified employee on the date of termination, no payment
of compensation under this Agreement shall be made to the Executive during the
period lasting six (6) months from the date of termination unless the
Company determines that there is no reasonable basis for believing that making
such payment would cause the Executive to suffer any adverse tax consequences 

 

6

 

pursuant to Section 409A of the Code.  If any payment to the Executive is delayed
pursuant to the foregoing sentence, such payment instead shall be made on the
first business day following the expiration of the six-month period referred to
in the prior sentence, unless specified otherwise in Section 5(i)(ii)   hereof. Although the Company shall consult
with Executive in good faith regarding implementation of this Section 5(i),
neither the Company nor its employees or representatives shall have liability
to the Executive with respect to any additional taxes that the Executive may be
subject to in the event that any amounts under this Agreement are determined to
violate Code section 409A.

 

(ii)  Notwithstanding
the above, amounts described as being subject to payment in accordance with the
provisions of this Section 5(i)(ii) shall be subject to a delay in
payment for a six-month period following the date of termination and shall be
paid as follows:  For any Base Salary
under Section 5(a)(ii) or Section 5(d)(ii)(A) and for any
bonus compensation under Section 5(a)(iii) or Section 5(d)(ii)(B) to
be continued beyond the date of termination and for any Pension Replacement
Payment, all payments that would have been made during the six-month period
immediately following the date of termination shall be made in a single cash
payment on the first business day following the expiration of such six-month
period, and as of the first business day following the expiration of such
six-month period all such payments shall resume in accordance with the regular
payroll practices of the Company until the end of the specified period; any
bonus payments under Section 5(a)(iii) or Section 5(d)(ii)(B) shall
be paid in a single lump sum payment on the first business day following the
expiration of such six-month period.

 

2.               Miscellaneous.

 

A.                          Except
as provided above, all other terms and conditions of the  Agreement shall remain the same.

B.                            Capitalized
terms used in this Amendment shall have the meanings ascribed to such terms in
the Agreement, except to the extent the term is modified herein.

C.                            This
Amendment shall be subject to, and governed by, the laws of the State of New
York applicable to contracts made and to be performed therein.

 

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

 

	
   

  	
  THE ESTÉE LAUDER COMPANIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amy DiGeso

  
	
   

  	
  Name: 

  	
  Amy DiGeso

  
	
   

  	
  Title:

  	
  Executive Vice
  President –

  
	
   

  	
   

  	
   Global
  Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Leonard A.
  Lauder

  
	
   

  	
   

  	
  Leonard A.
  Lauder

  
				

 

7Exhibit 10.121

 

EXECUTIVE SEVERANCE AGREEMENT

 

This Executive Severance Agreement (the “Agreement”), dated as of February 3,
2009 (the “Separation Agreement”), is made and entered into by and between
Steven L. Muellner (“Executive”) and Meade Instruments Corp., a Delaware
corporation (the “Company”).

 

RECITALS

 

A.            Executive served as President and Chief
Executive Officer of the Company.

 

B.            The terms and conditions of Executive’s
employment with the Company are governed by an Employment Agreement, dated as of
July 13, 2007 (the “Employment Agreement”), by and between the Company and
Executive which formalizes the severance commitments owed to Executive in the
event of a termination of such Employment Agreement.

 

C.            The termination of the Employment
Agreement will be effective as of the Separation Date. Accordingly, Executive
and the Company desire to enter into this Agreement to set forth in detail,
among other things, the payments and benefits Executive is entitled to receive
in connection with such termination from the Company.

 

NOW, THEREFORE, in consideration of the covenants undertaken in the
Agreement, the Company and Executive agree as follows:

 

AGREEMENT

 

1.             Termination of Employment Agreement. 
On the Separation Date, the Employment Agreement shall terminate;
provided, however, that notwithstanding anything to the contrary in this
Agreement, Sections 7 (Confidential Information), 8 (Inventions and
Patents), 9 (Non-Competition), 10 (Non-Solicitation of Customers),
11 (Noninterference with Employees), 12 (Assistance in Patent
Applications) and 13 (Indemnity) of the Employment Agreement, which are
incorporated herein by reference, shall continue to apply in accordance with
their terms.

 

2.             Severance Payments and Benefits. 
In connection with the termination of the Employment Agreement and for
his obligations to the Company under this Agreement, including, without
limitation, the Non-Competition obligations set forth in the Employment
Agreement, Executive shall receive the following:

 

2.1.          Severance Payment. 
A lump sum cash payment equal to Four Hundred Thousand Dollars
($400,000) (the “Severance Payment”). The Severance Payment shall be paid by
the Company to the Executive on the Payment Date (as defined below).

 

2.2.          Company Sponsored Benefits. 
Participation by Executive in all Company sponsored benefits and plans
shall terminate on the Separation Date. The Company will provide Executive with
a notice under COBRA (as defined below), which will include the insurance
premium rate for coverage for Executive under the Consolidated Omnibus Budget
Reconciliation Act of 1984, as amended (“COBRA”). Executive will receive
sufficient funds to cover the Company sponsored portion of Executive’s group
insurance coverage for a period of twelve (12) months; provided, however, that
Executive must timely apply for and elect such COBRA benefits. It will be
Executive’s responsibility and obligation to pay the applicable COBRA premium
for Executive’s coverage.  The aggregate
value of all payments to be made to the Executive under this Section 2.2
shall be paid to Executive in one lump sum on the Payment Date.

 

 

2.3.          401K Account. 
Nothing in this Agreement shall affect Executive’s rights to his Company
401(k) account.

 

3.             Company Property. 
Executive agrees to return all Company property to the Company
immediately after the Separation Date; including, without limitation, product
samples or other Company equipment of a material nature, confidential company
documentation, or any company records, unless the Company property is used in
connection with services provided to or on behalf of the Company by Executive;
provided, however, Executive can retain his office computer and related
peripherals without any cost to Executive. Notwithstanding the above, the
parties agree that the Company cell phone issued to Executive shall remain with
and shall become the property of Executive, and Executive agrees to be
responsible for all expenses and liabilities related thereto after the
Separation Date.

 

4.             Executive Release. 
In consideration of the terms of this Agreement as provided herein,
except as to any obligations provided for or assumed in this Agreement
Executive agrees to waive and release the Company, and each of its affiliated
or related entities, partnerships, parent or subsidiary corporations, members,
partners, stockholders, directors, officers, employees, attorneys, agents,
predecessors, successors and assigns, and each and all of them (collectively
referred to as the “Company Releasees”), from all claims, damages, agreements,
charges of discrimination or complaints of any nature whatsoever, whether or
not now known, suspected or claimed, matured or unmatured, fixed or contingent,
which Executive or his successors-in-interest ever had, now has, or may claim
to have against the Company Releasees, or any of them, whether directly or
indirectly, by reason of any act, event or omission concerning any matter,
cause or thing arising prior to the date of execution of this Agreement,
including, without limiting the generality of the foregoing, any claims
relating to or arising out of (i) Executive’s employment or the cessation
of that employment; (ii) any agreement between Executive and any of the
Company Releasees, including, without limitation, the Employment Agreement; (iii) any
tort or tort-type claims; (iv) any federal, state or governmental
constitution, statute, regulation or ordinance, including, but not limited to,
Title VII of the Civil Rights of 1964, the Employee Retirement Income Security
Act, the Age Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act, the Americans With Disabilities Act, and the California
Fair Employment and Housing Act; (v) any claim for wages, salary, bonuses,
partnership interests, profit sharing, and/or any other compensation or
benefit; (vi) any impairment of Executive’s ability to obtain subsequent
employment; or (vii) any permanent or temporary disability or loss of
future earnings as a result of injury or disability arising from or associated
with employment or the termination of the employment relationship with any of
the Company Releasees. This release does not waive or release any claim
Executive may have to unemployment or workers’ compensation benefits. This
release includes a waiver of any rights Executive may have under Section 1542
of the California Civil Code, or any similar statute or law of any other state,
regarding the waiver of unknown claims. Section 1542 provides as follows:

 

“A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

2

 

Notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and discharge of all
claims, Executive understands and agrees that this Agreement is intended to
include in its effect, without limitation, all claims, if any, which Executive
may have and which Executive does not now know or suspect to exist in his favor
against the Company Releasees, and this Agreement extinguishes any and all of
those claims.

 

5.             Company Release. 
As additional consideration to Executive, and except as to any
obligations provided for or assumed in this Agreement, the Company agrees to
waive and release Executive, and each of his attorneys, agents, predecessors,
successors and assigns, and each and all of them (collectively referred to as
the “Executive Releasees”), from all claims, damages, agreements, or complaints
of any nature whatsoever, whether or not known, suspected or claimed, matured
or unmatured, fixed or contingent, which the Company or its
successors-in-interest ever had, now has, or may claim to have against the
Executive Releasees, or any of them, whether directly or indirectly, by reason
of any act, event or omission concerning any matter, cause or thing arising
prior to the date of execution of this Agreement, including, without limiting the
generality of the foregoing, any claims relating to or arising out of (i) Executive’s
employment or the cessation of that employment; (ii) any agreement between
Executive and any of the Company Releasees, including, without limitation, the
Employment Agreement; (iii) any tort or tort-type claims; (iv) any
claim for fraud, self-dealing, or similar claim; and (v) any federal,
state or governmental constitution, statute, regulation or ordinance. This
release includes a waiver of any rights the Company may have under Section 1542
of the California Civil Code (the language of which is set forth above in
paragraph 4), or any similar statute or law of any other State, regarding
the waiver of unknown claims. Notwithstanding the provisions of Section 1542,
and for the purpose of implementing a full and complete release and discharge
of all claims, the Company understands and agrees that this Agreement is
intended to include in its effect, without limitation, all claims, if any,
which the Company may have and which the Company does not now know or suspect
to exist in its favor against Executive Releasees, and this Agreement
extinguishes any and all of those claims.

 

6.             Acknowledgement. 
Executive represents that he has had an opportunity to discuss all
aspects of this Agreement with his legal counsel, and understands all
provisions of this Agreement and is voluntarily entering into its terms.
Executive acknowledges the following: (i) he has twenty-one (21) days from
the date of his receipt of this Agreement to consider this Agreement before
signing it, and he hereby waives the foregoing twenty-one day period; (ii) he
has been advised in writing that he has the right to and may consult with an
attorney before executing this Agreement, and acknowledges that he has had the
opportunity to consult an attorney; and (iii) he has seven (7) days
following the execution of this Agreement to revoke this Agreement. To revoke
this Agreement, Executive must advise the Company in writing of his election to
revoke it within the seven (7) day period. Executive recognizes that he is
specifically releasing, among other claims, any claims he may have arising
under the Age Discrimination in

 

3

 

Employment Act of 1967 (“ADEA”)
and all amendments thereto. Executive acknowledges that this Agreement is
intended by the parties to comply with the terms and provisions of the Older
Workers Benefit Protection Act of 1990 and all amendments thereto. Accordingly,
if Executive does not revoke this Agreement during the seven-day revocation
period above, payment of the Severance Payment will be remitted to Executive at
his home address within two (2) business days following the seven-day
revocation period (the “Payment Date”).

 

7.             Public Statements. 
Executive agrees that he shall not directly or indirectly, make or
ratify any statement, public or private, oral or written, to any person that
disparages, either professionally or personally, the Company or its
subsidiaries and affiliates, past and present, and each of them, as well as its
and their directors, officers and employees, and each of them, and the Company
agrees that it shall not directly or indirectly, make or ratify any statement,
public or private, oral or written, to any person that disparages Executive,
either professionally or personally.

 

8.             Indemnity.  The Company
and Executive expressly acknowledge that the provisions of their Indemnity
Agreement, and the provisions of the Employment Agreement set forth in
paragraph 1 above, continue to apply to Executive and the Company.
Accordingly, the Company covenants and agrees that so long as Executive shall
be subject to any possible Proceeding, the Company, subject to the terms
hereof, shall promptly obtain and maintain in full force and effect directors’
and officers’ liability insurance (“D&O Insurance”) in reasonable amounts
from established and reputable insurers. In all D&O Insurance policies,
Executive shall be provided the same rights and benefits as are accorded to the
most favorably insured of the Company’s directors and officers. Notwithstanding
anything in this Section, the Company shall have no obligation to obtain or
maintain D&O Insurance if the Company determines in good faith that
insurance is not reasonably available, the premium costs for insurance are
disproportionate to the amount of coverage provided or the coverage provided by
insurance is so limited by exclusions that it provides an insufficient benefit.
For purposes of this Section 8, the term “Proceeding” shall include any
threatened, pending or completed action, suit or proceeding, whether brought by
or in the name of the Company or otherwise and whether of a civil, criminal or
administrative or investigative nature, by reason of the fact that Executive is
or was a director and/or officer of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
enterprise, whether or not he is serving in such capacity at the time any
liability or expense is incurred for which indemnification or reimbursement is
to be provided under the Indemnity Agreement.

 

9.             Miscellaneous Provisions.

 

9.1.          Personal Service. 
This Agreement is personal to Executive and shall not, without the prior
written consent of the Company, be assignable by Executive.

 

9.2.          Successors.  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.

 

4

 

9.3.          Modification. 
This Agreement may not be amended or modified other than by a written
agreement executed by an Executive Officer of the Company.

 

9.4.          Complete Agreement. 
This Agreement constitutes and contains the entire agreement and final
understanding concerning Executive’s employment relationship with the Company
and the other subject matters addressed herein and therein between the parties,
and supersede and replace all prior negotiations and all agreements proposed or
otherwise, whether written or oral, concerning the subject matters hereof and
thereof, provided, however, that notwithstanding anything to the contrary in
this Agreement, Sections 7 (Confidential Information), 8 (Inventions
and Patents), 9 (Non-Competition), 10 (Non-Solicitation of
Customers), 11 (Noninterference with Employees), 12 (Assistance in
Patent Applications) and 13 (Indemnity) of the Employment Agreement, which
are incorporated herein by reference, shall continue to apply in accordance
with their terms, and nothing herein or therein shall limit or otherwise modify
the indemnification obligations of the Company in favor of Executive under the
Company’s Certificate of Incorporation, Bylaws or the Indemnity Agreement.
Except as contained in the foregoing proviso, any representation, promise or
agreement not specifically included in this Agreement shall not be binding upon
or enforceable against either party.

 

9.5.          Litigation and Investigation Assistance. 
Executive agrees to cooperate to the extent reasonably requested in the
Company’s defense against any threatened or pending litigation or in any
investigation or proceeding that relates to any events or actions which occurred
during the term of Executive’s employment. To the extent the Company requests
Executive’s assistance in such matters at any time after the Consulting Period,
Executive shall be compensated by the Company at a mutually agreed upon hourly
rate. The Company shall reimburse Executive for all reasonable, out of pocket
expenses incurred by Executive in fulfilling his obligations under this
Section.

 

9.6.          Severability. 
If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of
the Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to
be severable.

 

9.7.          Specific Performance. 
It might be impossible to measure in money the damage to a party if
another party breaches this Agreement. If any such failure occurs, the party
damaged might not have an adequate remedy at law or in damages. Therefore, each
party consents to the issuance of an injunction or other appropriate relief,
and the enforcement of other equitable remedies, against it to compel
performance of this Agreement.

 

9.8.          Choice of Law. 
This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California without regard to principles of conflict of
laws.

 

5

 

9.9.          Cooperation in Drafting. 
Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.

 

9.10.        Counterparts. 
This Agreement may be executed in counterparts, and each counterpart,
when executed, shall have the efficacy of a signed original. Photographic
copies of such signed counterparts may be used in lieu of the originals for any
purpose.

 

9.11.        Arbitration. 
As a material inducement to enter into this Agreement, to the fullest
extent allowed by law, any controversy, claim or dispute between Executive and
the Company will be submitted to final and binding arbitration before a single
neutral arbitrator in Orange County, California for determination in accordance
with the JAMS Employment Arbitration Rules, 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 JAMS administrative expenses. Any judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. BY AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH
EXECUTIVE 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.

 

9.12.        Headings. 
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

9.13.        Waiver. 
No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed
by the Executive and by an Executive Officer of the Company. No waiver by
either party of any breach of, or of compliance with, any condition or provision
of this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.

 

9.14.        Expenses. 
Each party shall bear their own legal expenses and costs in connection
with the negotiation, preparation and execution of this Agreement. In the event
that any action or proceeding is brought in connection with this Agreement, the
prevailing party therein shall be entitled to recover its costs and reasonable
attorney’s fees

 

9.15.        Executive’s
Death.  In the event of Executive’s death during the
time in which any Severance Payment and/or the other benefits are to be
provided to Executive, the Company shall pay or provide such Payment or benefit
(but only to the extent that the underlying benefit plans permit such
contribution of benefits) to such person or persons as Executive shall have
directed in writing or, in absence of a designation, the estate of Executive.
In the event of Executive’s death, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or
other legal representative.

 

6

 

9.16.        Publicity. 
To the extent the Company or Executive desire to publicly announce the
existence of this Agreement, or the termination of Executive’s Employment
Agreement, or as may be required by applicable law, both parties agree to not
make any public announcement or disclosure without the other party’s prior
written consent, such consent not to be unreasonably withheld.

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
set forth above.

 

	
   

  	
  MEADE
  INSTRUMENTS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul E. Ross

  
	
   

  	
   

  	
  Paul E. Ross,
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/Steven L.
  Muellner

  
	
   

  	
  Steven L.
  Muellner

  

 

7

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