AGREEMENT
THIS AGREEMENT, effective as of this 6th day of November, 1996, by
and between National Vision Associates, Ltd., a Georgia corporation (the
"Company"), and ------------------------- (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to assure both itself and its key
employees of continuity of management and objective judgment in the event of
any Change in Control (as defined below) of the Company and to provide certain
other benefits, and the Executive is a key employee of the Company and an
integral part of its management;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants herein contained, the parties hereby agree as follows:
I. TERM OF AGREEMENT.
This Agreement shall be effective immediately upon its execution by
the parties hereto. The term of this Agreement shall be for a rolling, three
(3) year term commencing on the date hereof, and shall be deemed automatically
(without further action by either the Company or the Executive) to extend each
day for an additional day such that the remaining term of the Agreement shall
continue to be three (3) years; provided, however, that on Executive's 62nd
birthday this Agreement shall cease to extend automatically and, on such date,
the remaining "term" of this Agreement shall be three (3) years; provided
further, that the Company may, by notice to the Executive, cause this
Agreement to cease to extend automatically and, upon such notice, the "Term"
of this Agreement shall be three (3) years following such notice.
II. DEFINITIONS.
1. Base Amount - The term "Base Amount" shall have the same meaning
as ascribed to it under Section 280G(b) (3) of the Internal Revenue Code of
1986, as amended (the "Code").
2. Board - The Board of Directors of the Company, or its successor.
3. Cause - The term "Cause" as used herein shall mean: (i) any act
that constitutes, on the part of the Executive, (a) fraud, dishonesty, gross
negligence, or willful misconduct and (b) that directly results in material
injury to the Company, or (ii) the Executive's material breach of this
Agreement, or (iii) the Executive's conviction of a felony or crime involving
moral turpitude. A termination of the Executive for "Cause" based on clause
(i) or (ii) of the preceding sentence shall take effect thirty (30) days
after the Company gives written notice of such termination to the Executive
specifying the conduct deemed to qualify as Cause, unless the Executive shall,
during such 30-day period, remedy the events or circumstances constituting
Cause to the reasonable satisfaction of the Company. A termination for Cause
based on clause (iii) above shall take effect immediately upon giving of the
termination notice.
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4. Change in Control - The term "Change in Control" as used herein
shall mean the occurrence of one of the following:
(i) the Company consolidates or merges with or into another
corporation, or is otherwise reorganized, if the Company
is not the surviving corporation in such transaction or if
after such transaction any other corporation, association
or other person, entity or group or the shareholders thereof
own, direct and/or indirectly, more than 50% of the then
outstanding shares of common stock or more than 50% of
the assets of the Company; or
(ii) more than 35% of the then outstanding shares of common
stock of the Company are, in a single transaction or in a
series of related transactions, sold or otherwise
transferred to or are acquired by any other corporation,
association or other person, entity or group, whether or
not any such shareholder or any shareholders included in
such group were shareholders of the Company prior to the
Change in Control; or
(iii) all or substantially all of the assets of the Company are
sold or otherwise transferred to or otherwise acquired by
any other corporation, association or other person, entity
or group; or
(iv) the occurrence of any other event or circumstance which is
not covered by (i) through (iii) above which the Board
determines affects control of the Company and constitutes
a Change in Control for purpose of this Agreement.
5. Disability - The term "Disability" shall mean the Executive's
inability as a result of physical or mental incapacity to substantially
perform his duties for the Company on a full-time basis for a period of six
(6) months.
6. Excess Severance Payment - The term "Excess Severance Payment"
shall have the same meaning as the term "excess parachute payment" defined
in Section 280G(b) (1) of the Code.
7. Severance Payment - The term "Severance Payment" shall have
the same meaning as the term "parachute payment" defined in Section 280G(b)(2)
of the Code.
8. Present Value - The term "Present Value" shall have the same
meaning as provided in Section 280G(d) (4) of the Code.
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9. Protected Period. The greater of (a) 18 months or (b) the
number (rounded downward to the nearest whole number) of months equal to (1)
the Executive's current salary (as defined in Section III.2(a) of this
Agreement) divided by (2) $10,000, provided, however, that in no event
shall the Protected Period exceed 36 months.
10. Reasonable Compensation - The term "Reasonable Compensation"
shall have the same meaning as provided in Section 280G(b) (4) of the Code.
11. Threatened Change in Control - Any pending tender offer for
the Company's outstanding shares of common stock, or any pending offer to
acquire the Company by merger or consolidation, or any other pending action
or plan to effect a Change in Control of the Company.
III. BENEFITS UPON TERMINATION.
1. Termination Upon Change in Control - If a Change in Control
or Threatened Change in Control occurs during the term of this Agreement
and the Executive's employment is terminated (i) within twenty-four (24)
months following the date of the Change in Control, (ii) within six (6)
months prior to the date of the Change in Control as a part of such Change
in Control, or (iii) during the period commencing on the date a Threatened
Change in Control becomes manifest and until it ends, and in the case of
(i), (ii), or (iii), such termination is a result of Involuntary
Termination or Voluntary Termination, as defined below, then the benefits
described in Section 2 below shall, subject to Section IV.5 of this
Agreement, be paid or provided to the Executive. The fact that Executive
is eligible for early, normal or delayed retirement under a Company
retirement plan at the time of his termination shall not make him ineligible
to receive benefits hereunder.
(a) Involuntary Termination - For purposes hereof, "Involuntary
Termination" shall mean termination of employment that is
involuntary on the part of the Executive and that occurs for
reasons other than for Cause, Disability, or death.
(b) Voluntary Termination - For purposes hereof, "Voluntary
Termination" shall mean termination of employment that is
voluntary on the part of the Executive, and, in the judgment of
the Executive, is due to
(i) the assignment to the Executive of any duties inconsistent
with the Executive's title and status in effect prior to the
Change in Control or Threatened Change in Control, or an
adverse alteration in the nature or status of the Executive's
responsibilities at the Company from those in effect
immediately prior to the Change in Control or Threatened
Change in Control (other than any such alteration primarily
attributable to the fact that the Company may no longer be a
public company);
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(ii) a reduction by the Company of the Executive's base
salary from such salary in effect prior to the Change in
Control or Threatened Change in Control;
(iii) the relocation of the Company's principal executive
offices to a location outside of the Atlanta, Georgia
metropolitan area, or the Company's requiring the Executive
to be based anywhere other than the Company's principal
executive offices, except for required travel on the
Company's business to an extent substantially consistent
with the Executive's present business travel obligations;
(iv) the failure by the Company, without the Executive's
consent, to pay to the Executive any portion of the
Executive's then current compensation (including base salary
and annual bonus), or to pay to the Executive any portion
of an installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days of
the date such compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Executive participates
immediately prior to the Change in Control or Threatened
Change in Control, which is material to the Executive's total
compensation, including but not limited to the Company's
annual bonus plan, Restated Stock Option and Incentive Award
Plan, or any substitute plans adopted prior to the Change in
Control or Threatened Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure
by the Company to continue the Executive's participation in
such plan (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the
amount of benefits provided and the level of the Executive's
participation relative to other participants, as existed at
the time of the Change in Control or Threatened Change in
Control; or
(vi) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed
by the Executive under any of the Company's life insurance,
medical, health and accident or disability plans in which
the Executive was participating at the time of the Change
in Control or Threatened Change in Control, the taking of
any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the
Executive at the time of the Change in Control or Threatened
Change in Control.
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A termination shall not be considered voluntary within the meaning of this
Agreement if such termination is the result of Cause, Disability, or death
of the Executive. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
relating to Voluntary Termination hereunder.
2. Benefits to be Provided - If the Executive becomes eligible
for benefits under Section 1 above, the Company shall pay or provide to the
Executive the compensation and benefits set forth in this Section 2,
provided, that if the Executive's Voluntary Termination is due to reasons
stated in Sections 1(b)(i) or 1(b)(iii) above, the payments or benefits
under subsections (a), (b) and (d) below shall only be provided for the
Protected Period and be paid in the manner described in Section 2(a) below.
(a) Salary - The Executive will continue to receive his current
salary (subject to withholding of all applicable taxes and any
amounts referred to in Section 2(b) below) for a period of
thirty-six (36) months from his date of termination in the same
manner as it was being paid as of the date of termination;
provided, however, that the salary payments provided for hereunder
shall be paid in a single lump sum payment, to be paid not later
than 30 days after his termination of employment; provided,
further, that the amount of such lump sum payment shall be
determined by taking the salary payments to be made and
discounting them to their Present Value on the date Executive's
employment is terminated. For purposes hereof, the Executive's
"current salary" shall be the highest rate in effect during the
six-month period prior to the Executive's termination.
(b) Health and Life Insurance Coverage - The health and life
insurance benefits coverage (including any executive medical
plan or split dollar insurance plan) provided to the Executive
at his date of termination shall be continued by the Company at
its expense at the same level and in the same manner as if his
employment had not terminated (subject to the customary changes
in such coverages if the Executive retires, reaches age 65 or
similar events), beginning on the date of such termination and
ending on the date twenty-four (24) months from the date of such
termination. Any additional coverages the Executive had at
termination, including dependent coverage, will also be continued
for such period on the same terms, to the extent permitted
by the applicable policies or contracts. Any costs the Executive
was paying for such coverages at the time of termination shall be
paid by the Executive by separate check payable to the Company
each month in advance. If the terms of any benefit plan referred
to in this Section do not permit continued participation by the
Executive, then the Company will arrange for other coverage at
its expense providing substantially similar benefits. The
coverages provided for in this Section shall be applied against
and reduce the period for which COBRA will be provided.
(c) Stock Options - As of the Executive's date of termination,
all outstanding stock options granted to the Executive under any
stock option plan or program maintained by the Company, shall
become 100% vested and immediately exercisable.
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(d) Effect of Death - In the event of the Executive's death after
he becomes entitled to benefits hereunder, the benefits shall be
continued for the remainder of the 24-month period to his spouse.
If the Executive is not married, the benefits shall cease on his
date of death.
IV. LIMITATION OF BENEFITS.
1. Limitation of Amount - Notwithstanding anything in this
Agreement to the contrary, if any of the compensation or benefits payable,
or to be provided, to the Executive by the Company under this Agreement are
treated as Excess Severance Payments (whether alone or in conjunction with
payments or benefits outside of this Agreement), the compensation and
benefits provided under this Agreement shall be modified or reduced in
the manner provided in Section 2 below to the extent necessary so that
the compensation and benefits payable or to be provided to the Executive
under this Agreement that are treated as Severance Payments, as well as any
compensation or benefits provided outside of this Agreement that are so
treated, shall not cause the Company to have paid an Excess Severance
Payment. In computing such amount, the parties shall take into account
all provisions of Code Section 280G, and the regulations thereunder,
including making appropriate adjustments to such calculation for amounts
established to be Reasonable Compensation. The determinations under this
Section IV.1 with regard to Excess Severance Payments shall be made by an
independent accounting firm selected by the Company and the Executive,
which shall provide detailed supporting calculations to the parties.
2. Modification of Amount - In the event that the amount of any
Severance Payments which would be payable to or for the benefit of the
Executive under this Agreement must be modified or reduced to comply with
this Article, the Executive shall direct which Severance Payments are to
be modified or reduced; provided, however, that no increase in the amount
of any payment shall be made without the consent of the Company.
3. Avoidance of Penalty Taxes - This Article shall be
interpreted so as to avoid the imposition of excise taxes on the Executive
under Section 4999 of the Code or the disallowance of a deduction to the
Company pursuant to Section 280G(a) of the Code with respect to amounts
payable under this Agreement. In connection with any Internal Revenue
Service examination, audit or other inquiry, the Company and the Executive
agree to take action to provide, and to cooperate in providing, evidence
to the Internal Revenue Service (and, if applicable, the state revenue
department) that the compensation and benefits provided under this
Agreement do not result in the payment of Excess Severance Payments.
4. Additional Limitation - In addition to the limits otherwise
provided in this Article, to the extent permitted by law the Executive may
in his sole discretion elect to reduce (or change the timing of) any
payments he may be eligible to receive under this Agreement to prevent
the imposition of excise taxes on the Executive under Section 4999 of
the Code or otherwise reduce or delay liability for taxes owed under
the Code.
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5. Pooling of Interests Accounting - During the two-year period
commencing on the date of this Agreement, the compensation and benefits
provided for in Section III.2 of this Agreement shall not be payable
following a transaction involving a Change in Control or Threatened Change
in Control if both of the following circumstances exist:
(a) The provisions contained in Article III of this Agreement
create conditions which would, in the opinion of the independent
certified public accountants of the Company, preclude the use of
pooling of interests accounting, and
(b) The completion of the transaction is conditioned upon the
use of pooling of interests accounting.
If both of the above described circumstances exist, then the
Company and the Executive shall promptly, reasonably and in good faith
endeavor to replace and supersede this Agreement with a new agreement which
(a) permits the transaction to be accounted for as a pooling of interests
and (b) gives the Executive the economic and other benefits provided for in
this Agreement.
V. MISCELLANEOUS.
1. Notices - Any notice to a party required or permitted to be
given hereunder shall be in writing and shall be deemed given when delivered
and shall be hand delivered, sent by facsimile transmission with request
for confirmation of receipt, or mailed registered or certified mail (return
receipt requested), to such party at such party's address as specified below,
or at such other address as such party shall specify by notice to the other.
If to the Company, to 000 Xxxxxxx Xxxxxxx, Xxxxxxxxxxxxx, Xxxxxxx
00000.
If to the Executive, to his last address shown on the records of
the Company. The Executive shall be responsible for providing the Company
with a current address.
2. Assignment - This Agreement shall inure to the benefit of and
shall be binding upon the parties hereto and their respective executors,
administrators, heirs, personal representatives and successors, but, except
as hereinafter provided, neither this Agreement nor any right hereunder
may be assigned or transferred by either party thereto, or by any
beneficiary or any other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy or other legal process of any
kind against the Executive, his beneficiary or any other person.
Notwithstanding the foregoing, any person or business entity succeeding
to substantially all of the business of the Company by purchase, merger,
consolidation, sale of assets or otherwise, shall be bound by and shall
adopt and assume this Agreement and the Company shall obtain the assumption
of this Agreement by such successor. Failure by the Company to obtain
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such assumption and agreement prior to the effective date of any such
succession shall be a breach of this Agreement and shall entitle Executive
to the same compensation and benefits upon Involuntary Termination or
Voluntary Termination as if a Change in Control or Threatened Change in
Control had occurred. If the Executive shall die while any amount would
still be payable to the Executive hereunder (other than amounts which, by
their terms, terminate upon the death of the Executive) if the Executive
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive's
estate.
3. No Obligation to Fund - The agreement of the Company (or its
successor) to make payments to the Executive hereunder shall represent
solely the unsecured obligation of the Company (and its successor), except
to the extent the Company (or its successors) in its sole discretion elects
in whole or in part to fund its obligations under this Agreement pursuant
to a trust arrangement or otherwise.
4. Applicable Law - This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia.
5. Arbitration of Disputes; Expenses - All claims by the
Executive for compensation and benefits under this Agreement shall be
directed to and determined by the Board and shall be in writing. Any denial
by the Board of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement
relied upon. The Board shall afford a reasonable opportunity to the
Executive for a review of a decision denying a claim and shall further
allow the Executive to appeal to the Board a decision of the Board within
sixty (60) days after notification by the Board that the Executive's claim
has been denied. Any further dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
in Atlanta, Georgia, in accordance with the commercial arbitration rules
of the American Arbitration Association then in effect. The arbitration
award shall be final and binding upon the parties and judgment upon the
award may be entered on the arbitrator's award in any court having
jurisdiction. In the event the Executive incurs legal fees and other
expenses in seeking to obtain or to enforce any rights or benefits provided
by this Agreement and is successful, in whole or in part, in obtaining or
enforcing any such rights or benefits through settlement, arbitration or
otherwise, the Company shall promptly pay the Executive's reasonable
legal fees and expenses incurred in enforcing this Agreement and the
fees of the arbitrator. Except to the extent provided in the preceding
sentence, each party shall pay its own legal fees and other expenses
associated with any dispute, provided, that the fee for the arbitrator
shall be shared equally.
6. Amendment - This Agreement may only be amended by a written
instrument signed by the parties hereto, which makes specific reference to
this Agreement.
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7. Severability - If any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provisions
hereof.
8. Other Benefits - Nothing in this Agreement shall limit or
replace the compensation or benefits payable to the Executive, or otherwise
adversely affect the Executive's rights, under any other benefit plan,
program or agreement to which the Executive is a party.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officers and the Executive
has hereunder set his hand, as of the date first above written.
NATIONAL VISION ASSOCIATES, LTD.
By:
Title:
(Corporate Seal)
Attest:
Secretary
EXECUTIVE
/s/
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SCHEDULE TO CHANGE IN CONTROL AGREEMENT
The following executive officers have executed this form agreement:
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxxxx Xxxxxxx
Xxxxx X. Xxxxxx
D. Xxxxxxx Xxxxxxx
Xxxxxx X. Xxxxx
