Exhibit 10.26

 

PERFORMANCE UNIT AWARD

 

THIS AGREEMENT, made as of the 29th day of June 2004 (the “Grant Date”), between
National Vision, Inc., a Georgia corporation (the “Company”), and
                                       (the “Grantee”).

 

WHEREAS, the Company has adopted the National Vision, Inc. Management Incentive
Plan (the “Plan”) in order to provide incentives for those employees who are
principally responsible for the future growth and continued success of the
Company; and

 

WHEREAS, the Compensation Committee responsible for administration of the Plan
has determined to grant to the Grantee a Performance Unit Award as provided
herein.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.                                       Grant of Award.

 

1.1                                 The Company hereby grants to the Grantee an
award of a number of performance units (the “Award”), each of which has a value
determined as provided in Section 2 below based upon the performance of the
Company and its subsidiaries during the Performance Period as expressed in the
performance goal, all as set forth on Appendix A, attached hereto and make an
integral part of this Agreement.  As provided in the Plan, Grantee’s right to
payment of this Award is dependent upon Grantee’s continued employment with the
Company during the Performance Period.  Under certain circumstances as described
below, Grantee may be entitled to receive payment for some portion of the Award
if Grantee’s employment terminates prior to the end of the Performance Period in
accordance with the Plan and Section 4 of this Agreement.

 

1.2                                 The Grantee hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all the terms and provisions
thereof.  This Agreement shall be construed in accordance with, and subject to,
the provisions of the Plan (the provisions of which are hereby incorporated by
reference) and, except as otherwise expressly set forth herein, the capitalized
terms used in this Agreement shall have the same meaning as the definitions as
set forth in the Plan.

 

2.                                       Performance Measure and Performance
Levels.

 

The Committee has established the performance goal (the “Performance Goal”), and
award levels set forth in Appendix A attached hereto for the Performance Period.
Subject to the terms of the Plan, Grantee will receive a payment determined in
accordance with and as set forth in Appendix A for each Performance Unit
awarded.  The Performance Goal is based on stock price appreciation of the
common stock of the Company during the Performance Period.

 

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3.                                       Determination of Performance Unit
Award.

 

3.1                                 Award Determination.  As soon as practical
following the last day of the Performance Period, the Committee will determine
the Average Price (as defined in Appendix A).

 

3.2                                 Determination Notice.  The Company will
notify the Grantee (or the Grantee’s beneficiary or the executors or
administrators of the Grantee’s estate, if applicable) of the Committee’s
determination (the “Determination Notice”) of the amount of the Award earned for
the Performance Period.  The Determination Notice shall specify the Performance
Goal achieved by the Company for the Performance Period and the amount of the
Award (if any) Grantee will be entitled to receive.  All performance units shall
be paid in cash no later than 2-1/2 months after the end of the Performance
Period, notwithstanding Section 5(b) of the Plan.

 

4.                                       Termination of Employment.

 

In the event that a Grantee’s employment terminates during a Performance Period,
all Performance Units shall be immediately forfeited by the Grantee, except as
otherwise provided under the Plan as follows:

 

4.1                                 If the Grantee dies, retires, is assigned to
a different position that the Committee determines would not be eligible for
continued participation in the Plan, or is granted a leave of absence, during
the Performance Period, Grantee’s Award will be prorated for the number of
months of active employment and participation in the Plan during the Performance
Period.

 

4.2.                              If the Grantee’s employment is terminated for
“cause”, as determined by the Committee in its sole discretion, at any time
during a Performance Period and prior to the payment of the Award, Grantee’s
Award will be zero.

 

4.3                                 If the Grantee’s employment is terminated by
the Company for any reason (other than cause) on or before the effective date of
a Change in Control, the Committee may exercise its discretion to reduce the
Award to any amount, including zero.

 

5.                                       Change in Control.

 

Notwithstanding Section 10(b) of the Plan, in the event a Triggering Event (as
defined below) occurs, the Performance Period shall be deemed to have been
completed and the Award will be earned as of the date the Triggering Event
occurs as if 100% of the Performance Goals had been attained.  Payment of the
earned Award in the manner described in Section 3.2 of this Agreement will be
made within one hundred twenty (120) days after the last event constituting a
part of the Triggering Event occurs and, upon such payment, Grantee shall have
no further rights under this Agreement and the Plan with respect to any Award. 
For purposes of the foregoing, a “Triggering Event” shall mean a Change in
Control followed by either (a) the common stock of the Company ceasing to be
publicly traded, (b) within 365 days of the Change in Control, the Voluntary
Termination by the Grantee, as defined in Appendix A, or (c), within 365 days of
the Change in Control, the termination by the Company of the Grantee’s
employment for reasons other than Cause, as defined in Appendix A.

 

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The Committee may, in the exercise of its discretion granted under the Plan,
reduce any Award or adjust Performance Goals as the Committee determines to be
appropriate, as provided under the Plan, at any time before the effective date
of a Change in Control.

 

6.                                       No Right to Continued Employment.

 

Nothing in this Agreement or the Plan shall be interpreted to confer upon the
Grantee any rights with respect to continuance of employment by the Company, nor
shall this Agreement or the Plan interfere in any way with the right of the
Company to terminate the Grantee’s employment at any time for any reason or no
reason.

 

7.                                       Nonassignment.

 

The Grantee shall not have the right to assign, alienate, pledge, transfer or
encumber any amounts due Grantee hereunder, and any attempt to assign, alienate,
pledge, transfer, or encumber Grantee’s rights or benefits shall be null and
void and not recognized by the Plan or the Company.

 

8.                                       Modification of Agreement.

 

Except as otherwise provided in Section 5, this Agreement may be modified,
amended, suspended or terminated, and any terms or conditions may be waived, but
only by a written instrument executed by the parties hereto.

 

9.                                       Severability; Governing Law

 

Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.

 

The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Georgia without giving effect to
any choice or conflict of law provision or rule (whether of the State of Georgia
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Georgia.

 

10.                                 Successors in Interest.

 

This Agreement shall inure to the benefit of and be binding upon any successor
to the Company.  All obligations imposed upon the Grantee and all rights granted
to the Company under this Agreement shall be binding upon the Grantee’s
beneficiaries, heirs, executors, and administrators.

 

11.                                 Resolution of Disputes.

 

Any dispute or disagreement which may arise under, or as a result of, or in any
way relate to, the interpretation, construction or application of this Agreement
shall be

 

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determined by the Committee.  Any determination made hereunder shall be final,
binding and conclusive on the Grantee and the Company for all purposes.

 

12.                                 Withholding of Taxes.

 

The Company shall have the right to deduct from any amount payable under this
Agreement, an amount equal to the federal, state and local income taxes and
other amounts as may be required by law to be withheld with respect to any such
amount.

 

13.                                 Compliance with Sarbanes-Oxley

 

Grantee acknowledges that Section 304 of the Sarbanes-Oxley Act of 2002, to the
extent such law is applicable to Grantee and any Award, may in certain
circumstances require that an Award paid under this Agreement and the Plan be
subject to reimbursement to the Company.

 

 

 

NATIONAL VISION, INC.

 

 

 

 By:

 

 

 

 

 

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

Name of Grantee:

 

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National Vision, Inc.
Performance Unit Award

 

Appendix A

 

Number of Unit(s):                           .

 

Performance Period: Three-year period expiring on June 29, 2007

 

Performance Goal: appreciation in stock price

 

Payment Formula: each Unit shall be payable in an amount equal to the amount, if
any, by which the Average Price (as defined below) exceeds the Fair Market Value
(as defined below).

 

Average Price:  the average closing sale price of the common stock of the
Company (as reported by the American Stock Exchange or the primary stock
exchange or over the counter market upon which the common stock of the Company
is then traded) during the 20 consecutive trading days ending on June 29, 2007.

 

Fair Market Value: the last sale price reported for the common stock of the
Company on the American Stock Exchange on June 29, 2004 which is $2.30.

 

Voluntary Termination: termination of employment with the Company that is
voluntary on the part of the Grantee, and, in the judgment of the Grantee, is
due to

 

(i) the assignment to the Grantee of any duties inconsistent with the Grantee’s
title and status in effect prior to the Change in Control, or an adverse
alteration in the nature or status of the Grantee’s responsibilities at the
Company from those in effect immediately prior to the Change in Control (other
than any such alteration primarily attributable to the fact that the Company may
no longer be a public company);

 

(ii) a reduction by the Company of the Grantee’s base salary from such salary in
effect prior to the 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 Grantee 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 Grantee’s present business travel obligations;

 

(iv) the failure by the Company, without the Grantee’s consent, to pay to the
Grantee any portion of the Grantee’s then current compensation (including base
salary and annual bonus), or to pay to the Grantee any portion of an

 

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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 Grantee participates immediately prior to the Change in Control, which
is material to the Grantee’s total compensation, including but not limited to
the Company’s annual bonus plan, 2004 Equity Incentive Plan, or any predecessor
or substitute plans adopted prior to the 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
Grantee’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 Grantee’s participation relative to other
participants, as existed at the time of the Change in Control; or

 

(vi)  the failure by the Company to continue to provide the Grantee with
benefits substantially similar to those enjoyed by the Grantee under any of the
Company’s life insurance, medical, health and accident or disability plans in
which the Grantee was participating at the time of the 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 Grantee of any material
fringe benefit enjoyed by the Grantee at the time of the Change in Control.

 

A termination shall not be considered a Voluntary Termination if such
termination is the result of Cause, Disability, or death of the Grantee.  The
Grantee’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.

 

Cause: (i) any act that constitutes, on the part of the Grantee, (a) fraud,
dishonesty, gross negligence, or willful misconduct and (b) that directly
results in material injury to the Company, or (ii) the Grantee’s material breach
of this Agreement, or (iii) the Grantee’s conviction of a felony or crime
involving moral turpitude.  A termination of the Grantee 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 Grantee
specifying the conduct deemed to qualify as Cause, unless the Grantee 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.

 

Disability: the Grantee’s inability as a result of physical or mental incapacity
to substantially perform his or her duties for the Company on a full-time basis
for a period of six (6) months.

 

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