EXHIBIT (d)(2)
FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement (this "Amendment"), dated
September 23, 2002, is entered into by and between U.S. Vision, Inc., a Delaware
corporation (the "Company") and Xxxxxxx A, Xxxxxxxx, Jr. (the "Executive").
The following recitals are true and constitute the basis of this
Amendment:
A. The Executive and the Company entered into that certain
Employment Agreement dated April 2, 1998 (the "Employment
Agreement");
B. Pursuant to Section 3(e) of the Employment Agreement, in the
event that the Company sells all or substantially all of its
assets or stock, by merger or otherwise, Executive is entitled
to receive a bonus payment of $750,000 payable upon the
consummation of any such transaction (the "Change of Control
Payment");
C. On May 14, 2002, the Company entered into a Merger Agreement
with Kayak Acquisition Corp. ("Kayak"), pursuant to which
Kayak will be merged with and into the Company (the "Merger")
and, at the effective time of the Merger (the "Effective
Time"), all holders of outstanding shares of common stock will
be entitled to receive $4.25 in cash for each share owned at
that time and, except for the stock options held by the
Executive, Xxxxxx Xxxxxx and Xxxxx Xxxxxxx, all holders of
outstanding stock options and warrants, whether or not then
exercisable, will be entitled to receive in cash, without
interest from the Company, an amount determined by multiplying
(i) the excess, if any, of $4.25 over the applicable exercise
price per share of common stock subject to such stock options
or warrants by (ii) the total number of shares of common stock
subject to such stock options and warrants;
D. The Executive has agreed to reduce the amount which he would
be entitled to receive pursuant to Section 3(a) of the
Employment Agreement from $750,000 to an amount that will not
be deemed by any taxing authority of competent jurisdiction to
be a "parachute payment" (as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code")), and
has agreed to accept any such reduced amount in the form of a
deferred, non-interest bearing, unsecured cash payment to be
paid by the Company on the fifth (5th) anniversary of the
Effective Time (the "Deferred Cash Payment") instead of
receiving the Change of Control Payment at the Effective Time;
E. Contemporaneously with the execution of this Agreement by the
Executive and the Company, the Executive and the Company will
execute and deliver a First Amendment to Incentive Stock
Option Agreement pursuant to which the Executive has agreed to
accept a deferred, non-interest bearing, unsecured cash
payment in the amount of $285,919 to be paid by the Company on
the fifth (5th) anniversary of the Effective Time in
consideration for the cancellation of his stock options; and
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F. The Executive and the Company desire to enter into this
Amendment to provide for the Company's obligation to pay the
Deferred Cash Payment in lieu of the Change of Control
Payment, all to be effective at the Effective Time.
NOW, THEREFORE, for and in consideration of the terms and conditions
set forth herein, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, all
capitalized terms shall have the meanings ascribed to them by the Employment
Agreement.
SECTION 2. AMENDMENTS. Section 3(e) of the Employment Agreement is
hereby amended by deleting that section in its entirety and replacing it with
the following new Section 3(e):
"e. SALE BONUS. In the event of a sale of all or substantially all of
the assets or stock of the Company, by merger or otherwise, then upon
the closing of such transaction Executive shall receive, in addition
to any other compensation provided herein, the Change of Control
Payment payable at the closing of any such transaction; provided,
however, that if the Change of Control Payment under this Section
3(e), either alone or together with other payments that the Executive
has the right to receive from the Company, would constitute a
"parachute payment" (as defined in Section 280G of the Code), the
Change of Control Payment or the Deferred Cash Payment, as the case
may be, shall be reduced to the largest amount that will result in no
portion of the Change of Control Payment or the Deferred Cash Payment,
as the case may be, under this Section 3(e) being subject to the
excise tax imposed by Section 4999 of the Code. The determination of
any reduction in the Change of Control Payment or the Deferred Cash
Payment, as the case may be, under this Section 3(e) pursuant to the
foregoing proviso shall be made by the Executive in good faith, and
such determination shall be conclusive and binding on the Company.
Notwithstanding any other term or provision of this Agreement to the
contrary, at the Effective Time, the Change of Control Payment shall
be replaced by the Deferred Cash Payment, which shall be due and
payable by the Company to the Executive on the fifth anniversary of
the Effective Time. The amount of the Deferred Cash Payment shall not
bear interest and the Company's obligation to pay the Deferred Cash
Payment shall not be secured by any asset of the Company. Further, the
Company's obligation to pay the Deferred Cash Payment shall be
expressly subordinate to the rights of the Company's senior lender,
Commerce Bank, N.A. and the Executive agrees to execute and deliver a
subordination agreement or similar agreement on terms reasonably
acceptable to Commerce Bank, which agreement shall subordinate the
payment of the Deferred Cash Payment to the repayment in full of all
outstanding obligations of the Company to Commerce Bank, N.A."
SECTION 3. REFERENCES. From and after the date of effectiveness of this
Amendment, all references to the Employment Agreement shall be deemed to be
references to the Employment Agreement as amended hereby.
SECTION 4. EFFECTIVENESS OF THIS AMENDMENT; CONDITIONS TO AMENDMENT.
This Amendment shall be effective upon the execution of counterparts of this
Amendment by the Executive and the Company.
SECTION 5. ENTIRE AGREEMENT; RATIFICATION. This Amendment embodies the
entire agreement of the parties and supersedes any prior agreements or
understandings with respect to the subject matter hereof. Except as modified or
supplemented in connection herewith, the Employment Agreement shall continue in
full force and effect.
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SECTION 6. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument. In making proof hereof, it shall not be necessary to produce or
account for any counterpart other than one signed by the party against which
enforcement is sought.
SECTION 7. NO ORAL AGREEMENTS. This Amendment represents the final
agreement between and among the parties hereto with respect to the subject
matter hereof and may not be contradicted by evidence of prior, contemporaneous
or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties hereto.
IN WITNESS WHEREOF, this Amendment is executed as of the date first set
forth above.
U.S. VISION, INC.
By: /s/ XXXXXX X. XXXX III /s/ XXXXXXX X. XXXXXXXX, XX.
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Xxxxxx X. Xxxx III, CFO Xxxxxxx X. Xxxxxxxx, Xx.
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