Exhibit 10(iii)A(50)

 

LOGO [g82912img001.jpg]   

Vernon J. Nagel

Chairman, President and

Chief Executive Officer

Acuity Brands, Inc.

  

1170 Peachtree Street, NE

Suite 2400

Atlanta, GA 30309-7676

 

Tel: 404 853 1413

Fax: 404 853 1411

          vern.nagel@acuitybrands.com           www.AcuityBrands.com

 

August 1, 2005

 

Mr. John K. Morgan

1074 Robin Lane

Atlanta, GA 30306

 

Dear John:

 

This amended and restated letter agreement (“Agreement”) sets forth the terms
and conditions of your employment with Acuity Brands, Inc. (“Acuity”) and Acuity
Lighting Group (“ALG”) (Acuity and ALG are sometimes referred to collectively
hereinafter as the “Company”) and your election as President and Chief Executive
Officer of ALG, effective at the close of business on July 29, 2005 (“Effective
Date”). As of the Effective Date, this Agreement shall supersede and replace in
its entirety the employment letter, dated June 24, 2004, between you and Acuity.
After you have reviewed the terms and conditions of this letter, please sign
below to signify your acceptance.

 

1. Title and Responsibilities. Effective as of the Effective Date, you
(hereinafter “Executive”) will serve as President and Chief Executive Officer of
ALG and an Executive Vice President of Acuity (a member of the Acuity Leadership
Team) and will report to Vernon J. Nagel, as Chief Executive Officer of Acuity.
Executive shall have such duties, responsibilities, and authority as are
commensurate with such positions, as established by corporate law or Acuity’s
governance documents or delegated to him from time to time by the Chief
Executive Officer and the Board of Directors of Acuity (“Board”). Executive
accepts the duties described above and agrees to render his services for the
term of this Agreement.

 

2. Term. This Agreement shall commence as of the Effective Date and continue in
effect until either party gives notice to the other of termination (the period
of this Agreement is hereinafter referred to as the “term of this Agreement”).
Either party may terminate this Agreement for any reason and at any time with or
without cause and with or without advance notice, subject to Executive’s and
Acuity’s rights under any severance agreement relating to Executive’s
termination of employment.

 

3. Extent of Services. Executive agrees that during the term of this Agreement
he will devote his full working time and requisite energy and skill to the
diligent performance of Executive’s duties. With the consent and the assistance
of the Board, Executive may serve on the board of directors or board of trustees
of other companies or institutions, provided, however, that approval of the
Board shall be required as set forth in Acuity’s Corporate Governance
Guidelines, as they may be revised from time to time.

 

Acuity Brands Lighting

--------------------------------------------------------------------------------

  

Acuity Specialty Products

--------------------------------------------------------------------------------

Lithonia    Holophane    Peerless    Hydrel    Zep    Selig    Enforcer

--------------------------------------------------------------------------------

August 1, 2005

Page 2

 

4. Consideration. As consideration for the services performed by Executive
pursuant to this Agreement and the restrictive covenants in Paragraph 5, Acuity
will compensate Executive during the term of this Agreement as follows:

 

4.1 Base Salary. Commencing on the Effective Date, Executive will be entitled to
an annual base salary of $500,000, subject to periodic review and change by the
Compensation Committee. Executive’s base salary will be payable in accordance
with Acuity’s regular payroll practices for executives as in effect from time to
time.

 

4.2 Benefits. Executive will be entitled to participate in all employee benefit
plans and perquisites of Acuity in effect from time to time (including health,
life, disability, dental, and retirement plans) in which executive officers of
Acuity are entitled to participate.

 

4.3 Annual Incentive. Executive will be eligible for an annual incentive payment
in accordance with the Management Compensation and Incentive Plan (the
“Incentive Plan”) and the Plan Rules thereunder in effect for each year.
Pursuant to Plan Rules: (a) the amount of the incentive payment will be
determined by ALG’s overall financial performance and Executive’s individual
performance, and (b) Executive’s target bonus will be 60% of base salary for the
fiscal year ending August 31, 2006. Executive’s target bonus for future years
will be determined by the Board. The Incentive Plan and the Plan Rules
thereunder may be modified at any time in Acuity’s sole discretion, subject to
any applicable shareholder approval requirements.

 

4.4 Stock Options. As of the Effective Date, Acuity has granted Executive
options to acquire 160,000 shares of Company Stock which will vest annually over
4 years commencing one year from the grant date, such that the options will be
fully vested upon the fourth anniversary of the date of grant. This Stock Option
grant is subject to the additional terms and conditions set forth in a separate
Stock Option Agreement, which will be consistent with the agreements for other
executive officers except as otherwise provided herein.

 

4.5 Severance Agreement. Executive’s Severance Agreement with Acuity, dated as
of January 20, 2004 (“Severance Agreement”), will continue in effect and will be
amended to reflect Executive’s new title and responsibilities under this
Agreement and to delete restrictions related to the business of Acuity Specialty
Products. Executive and Acuity will enter into such amendments to the Severance
Agreement (or an amended and restated Severance Agreement) as may be necessary
to reflect the changes in this Paragraph 4.5

--------------------------------------------------------------------------------

August 1, 2005

Page 3

 

4.6 Change in Control of Acuity. Executive will continue to be covered by the
Severance Protection Agreement, dated as of November 30, 2001 (“SPA”), with
Acuity, which shall be amended in the manner provided in the amendment to the
Severance Protection Agreement attached hereto (the “SPA Amendment”).

 

4.7 Supplemental Retirement Benefits. Executive will continue to be covered by
the Acuity Brands, Inc. 2002 Supplemental Executive Retirement Plan (“SERP”) and
the Acuity Brands, Inc. Supplemental Deferred Savings Plan. Executive agrees
that if he is entitled to a payment based upon the crediting of additional
service under the SERP pursuant to Section 3.1 (d) of the SPA (as amended by the
SPA Agreement) and such service is also separately credited under the SERP, his
retirement benefit under the SERP shall be reduced in an equitable manner to
reflect the payment under Section 3.1(d) of the SPA.

 

4.8 Director and Officer Insurance. During the term of the Agreement and for a
period of three (3) years after Executive’s termination of employment, Executive
shall be entitled to director and officer liability insurance coverage for his
acts and omissions while an officer or director of Acuity and ALG on a basis no
less favorable to Executive than the coverage provided to then current officers
and directors.

 

4.9 Legal Expenses. Acuity shall promptly pay the reasonable legal fees and
expenses incurred by Executive in connection with the negotiation and execution
of this Agreement, the Stock Option Agreement and the amendments to the
Severance Agreement and the Severance Protection Agreement.

 

4.10 Supplemental Payment. If, during the three-year period commencing on the
Effective Date, Acuity elects as its President an individual other than Vernon
J. Nagel or Executive (the date of such election is hereinafter referred to as
the “Election Date”), Executive shall be entitled to receive a lump sum payment
of $500,000 (subject to all applicable withholding taxes), on the date six
(6) months after the Election Date (such date is hereinafter referred to as the
“Retention Date”), provided that Executive must remain employed by Acuity or ALG
until the Retention Date to receive the payment under this Paragraph 4.10. The
payment under this Section 4.10 shall be made within five (5) days after the
Retention Date.

 

If the Executive is eligible for the payment under the preceding paragraph, but
his employment is terminated under circumstances that entitle him to benefits
under Section 3.1 (b) of the SPA or Section 4 of the Severance Agreement, less
than six months after the Election Date, the Executive shall be entitled to
receive the compensation and benefits provided pursuant to Section 3.1(b) of the
Severance Protection Agreement or Section 4 of the Severance Agreement and not
the payment under the preceding paragraph.

--------------------------------------------------------------------------------

August 1, 2005

Page 4

 

5. Confidentiality, Non-Solicitation and Non-Competition. In consideration of
the compensation and benefits provided pursuant to this Agreement, Executive
agrees that during the term of his employment by the Company and for the one
year period following his termination of employment with the Company, Executive
shall comply with the non-competition, non-recruitment and non-disclosure
restrictions attached hereto as Exhibits A, B and C, respectively (the
“Restrictive Covenants”), provided, that if Executive is terminated by the
Company without Cause or Executive terminates his employment for Good Reason
under circumstances that entitle Executive to receive compensation and benefits
under the Severance Agreement, the restrictive covenants in Section 5.1 of the
Severance Agreement shall apply to Executive after termination of employment and
not the Restrictive Covenants as defined above. The Company and Executive
recognize that Executive may experience periodic material changes in his job
title and/or to the duties, responsibilities or services that he is called upon
to perform on the behalf of Acuity and ALG. If Executive experiences such a
material change, the parties shall, as soon as is practicable, enter into a
signed, written addendum to Exhibit A hereto reflecting such material change.
Moreover, in the event of any material change in corporate organization
(including, without limitation, spin-offs, split-offs, or public offerings of
subsidiaries’ stock) on the part of the Direct Competitors set forth in Exhibit
A hereto, the parties agree to amend Exhibit A, as necessary, at the Company’s
request, in order to reflect such change. Upon execution, any such written
modification to Exhibit A shall represent an enforceable amendment to this
Agreement and shall augment and supplant the definitions of the terms Executive
Services or Direct Competitor set forth in Exhibit A hereto, as applicable.

 

6. Assignability. This Agreement is binding on Acuity and ALG and any successors
of Acuity and ALG. Acuity and ALG may assign this Agreement and their rights
under this Agreement in whole or in part to any corporation or other entity with
or into which Acuity or ALG may merge or consolidate or to which Acuity or ALG
may transfer all or substantially all of its respective assets. Acuity and ALG
will require any successor by merger or consolidation or transferee of all or
substantially all of its assets, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Acuity and ALG would be
required to perform it if no such succession had taken place.

 

7. Amendment, Waiver. No provisions of this Agreement may be modified, waived or
discharged unless the waiver, modification or discharge is agreed to in writing
signed by Executive and such officer or officers as may be specifically
designated by the Board to sign on their behalf. No waiver by any party at any
time of any breach by any other party of, or compliance with, any condition or
provision of this Agreement will be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.

 

8. Governing Law. The validity, interpretation, construction and performance of
this Agreement will be governed by the laws of the United States where
applicable and otherwise the substantive laws of the State of Georgia.

--------------------------------------------------------------------------------

August 1, 2005

Page 5

 

9. Construction of Agreement. It is the intent of the parties that if any
covenant or other provision hereof is determined to be unenforceable in any
part, that portion of the Agreement will be severed or modified by the Court so
as to permit enforcement of the Agreement to the extent reasonable. It is agreed
by the parties that the obligations set forth herein will be considered to be
independent of any other obligations between the parties, and the existence of
any other claim or defense will not affect the enforceability of this Agreement.
Except as otherwise expressly provided herein, all of the consideration to be
provided to Executive hereunder shall be paid or otherwise provided on and in
accordance with and subject to Acuity’s and ALG’s standard policies, practices,
terms and conditions applicable from time to time under Acuity’s plans,
programs, agreements and arrangements relating to compensation and benefits of
the type agreed to be provided, including without limitation the terms and
conditions of Acuity’s standard forms of stock option or other applicable
executive compensation agreements. Without limiting the foregoing, any and all
benefit plans or other plans, programs, agreements and arrangements may be
modified, amended, replaced or terminated at Acuity’s sole discretion unless
otherwise expressly provided therein or herein.

 

Sincerely,

ACUITY BRANDS, INC.

By:  

/s/ Vernon J. Nagel

   

Vernon J. Nagel, Chairman,

President and Chief Executive Officer

--------------------------------------------------------------------------------

August 1, 2005

Page 6

 

I, John K. Morgan, have thoroughly read the terms and conditions contained in
this letter pertaining to my employment by Acuity Brands, Inc. and Acuity
Lighting Group. I fully agree to be bound by these terms and conditions,
including the Restrictive Covenants set forth in Paragraph 5.

 

/s/ John K. Morgan

     

9/26/05

John K. Morgan

     

Date

--------------------------------------------------------------------------------

August 1, 2005

Page 7

 

EXHIBIT A

TO ACUITY BRANDS, INC.

AGREEMENT WITH JOHN K. MORGAN

DATED AS OF AUGUST 1, 2005

 

NON-COMPETITION COVENANT

 

1. DEFINITIONS

 

Capitalized terms contained herein shall have the same meaning as those defined
terms set forth in the Agreement. In addition, the following terms used in this
Exhibit “A” shall have the following meanings:

 

(A) “Direct Competitor” means the following entities: (1) Cooper Lighting, Inc.;
(2) Genlyte Thomas Group LLC; (3) Juno Lighting, Inc.; and (4) Hubbell Lighting,
Inc., as well as any of their respective affiliates, subsidiaries and/or parent
companies that are either located or transact business within the United States
of America, but only to the extent each engages in the manufacture and/or sale
of one or more of the following classes of products: lighting fixtures, electric
linear modular lighting systems comprised of plug-in relocatable modular wiring
components, emergency lighting fixtures and systems (comprised of exit signs,
emergency light units, back-up power battery packs, and combinations thereof),
battery powered lighting fixtures, electric lighting track units, hardware for
mounting and hanging electrical lighting fixtures, LED replacement light
emitting diode tubes, aluminum, steel and fiberglass fixture poles for electric
lighting, water pumps, drum faucets, light fixture lenses, sound and
electromagnetic wave receivers and transmitters, flexible wiring systems and
components (namely, flexible branch circuits, attachment plugs, receptacles,
connectors and fittings), emergency lighting unit inverters, electrical lighting
controls, electrical dimming controllers and light switches for electric
fixtures, dimming units (comprised of cabinets, control stations and wiring for
control of electrical lighting fixtures and electric loads), electronic sensing
devices (namely, ultrasonic occupancy sensors and range extenders for lighting
energy management), or lighting control systems (comprised of dimmers, low
voltage switches, programmable lighting controllers, lighting energy management
occupancy sensors and timers, and range extenders for energy management);

 

(B) “Executive Services” means those principal duties and responsibilities that
Executive performs on behalf of the Company during his employment, as of the
date hereof, as Chief Executive Officer of Acuity Lighting Group and Executive
Vice President of Acuity Brands, Inc., in which capacity Executive: (1) serves
as a member of a group of Executives

--------------------------------------------------------------------------------

August 1, 2005

Page 8

 

responsible for a multi-profit center organization, with responsibility for the
profitability of two or more distinct profit centers; (2) develops, coordinates
and executes efforts directed towards enhancing branding, marketing, and
business development capabilities; (3) works to develop strategic customers and
key channels of distribution; (4) coordinates with departmental heads concerning
material business issues; (5) analyzes operations to pinpoint opportunities and
areas that may need to be reorganized, down-sized, or eliminated; (6) confers
with other Executives to coordinate and prioritize planning concerning material
business issues; (7) studies long-range economic trends and projects prospects
for future growth in overall sales and market share, opportunities for
acquisitions or expansion into new product areas; (8) serves as a member of the
Acuity Leadership Team, reviewing, discussing, evaluating, and participating in
decisions concerning material business and management issues, cost structures,
sales and growth opportunities, crisis management, strategic prospects,
personnel issues, litigation matters, leadership goals, and performance targets;
and (9) provides support and analysis for key leadership analysis requirements;
and

 

(C) “Restricted Period” means a period of one (1) year following termination of
Executive’s employment with the Company, other than a termination by the Company
without Cause or by Executive for Good Reason (both as defined in the Severance
Agreement).

 

2. ACKNOWLEDGEMENTS

 

Executive acknowledges that during the period of his employment as Chief
Executive Officer of Acuity Lighting Group and Executive Vice President of
Acuity Brands, Inc., he has and will render executive, strategic and managerial
services, including the Executive Services, to and for the Company throughout
the United States, which are special, unusual, extraordinary, and of peculiar
value to the Company. Executive further acknowledges that the services he
performs on behalf of the Company, including the Executive Services, are at a
senior managerial level and are not limited in their territorial scope to any
particular city, state, or region, but instead have nationwide impact throughout
the United States. Executive further acknowledges and agrees that: (a) the
Company’s business is, at the very least, national in scope; (b) these
restrictions are reasonable and necessary to protect the Confidential
Information, business relationships, and goodwill of the Company; and (c) should
Executive engage in or threaten to engage in activities in violation of these
restrictions, it would cause the Company irreparable harm which would not be
adequately and fully redressed by the payment of damages to the Company. In
addition to other remedies available to the Company, the Company shall
accordingly be entitled to seek injunctive relief in any court of competent
jurisdiction for any actual or threatened breach by Executive of the provisions
of this Exhibit A. Executive further acknowledges that he will

--------------------------------------------------------------------------------

August 1, 2005

Page 9

 

not be entitled to any compensation or benefits from the Company or any of its
affiliates in the event of a final non-appealable judgment that he materially
breached his duties or obligations under this Exhibit A.

 

3. NON-COMPETITION

 

Executive agrees that while employed by the Company and for a period equal to
the Restricted Period thereafter, he will not, directly (i.e., as an officer or
employee) or indirectly (i.e., as an independent contractor, consultant,
advisor, board member, agent, shareholder, investor, joint venturer, or
partner), engage in, provide or perform any of the Executive Services on behalf
of any Direct Competitor anywhere within the United States. Nothing in this
provision shall divest Executive from the right to acquire as a passive investor
(with no involvement in the operations or management of the business) up to 1%
of any class of securities which is: (i) issued by any Direct Competitor, and
(ii) publicly traded on a national securities exchange or over-the-counter
market.

 

4. SEPARABILITY

 

Executive acknowledges that the foregoing non-competition covenant is a separate
and distinct obligation of Executive and is deemed to be separable from the
remaining covenants of the Agreement and its various exhibits. If any of the
provisions of the foregoing covenant should ever be deemed to exceed the time,
geographic, product, or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
to the maximum time, geographic, product, or other limitations permitted by
applicable law. If any particular provision of the foregoing covenant is held to
be invalid, the remainder of the covenant and the remaining obligations of the
Agreement and its various exhibits shall not be affected thereby and shall
remain in full force and effect.

--------------------------------------------------------------------------------

August 1, 2005

Page 10

 

EXHIBIT B

TO ACUITY BRANDS, INC.

AGREEMENT WITH JOHN K. MORGAN

DATED AS OF AUGUST 1, 2005

 

NON-RECRUITMENT COVENANT

 

1. DEFINITIONS

 

The following terms used in this Exhibit “B” shall have the following meanings:

 

(A) “Person” means any individual, firm, partnership, association, corporation,
limited liability entity, trust, venture or other business organization, entity
or enterprise;

 

(B) “Restricted Period” means a period of one (1) year following termination of
Executive’s employment with the Company, other than a termination by the Company
without Cause or by Executive for Good Reason (both as defined in the Severance
Agreement).

 

2. NON-RECRUITMENT COVENANT

 

During the Restricted Period, the Executive will not, directly or indirectly,
for himself or on behalf of any other Person, solicit, induce, persuade, or
encourage, or attempt to solicit, induce, persuade, or encourage, any
management-level employee of the Company or the Company’s business unit in which
the Executive was employed (if applicable) to terminate such employee’s position
with the Company, whether or not such employee is a full-time or temporary
employee of the Company and whether or not such employment is pursuant to a
written agreement, for a determined period or at will.

 

3. SEPARABILITY

 

The Executive acknowledges that the foregoing covenant, as well as each of those
covenants set forth in Exhibits A and C to the Agreement, is a separate and
distinct obligation of the Executive and is deemed to be separable from the
remaining covenants. If any of the provisions of any other such covenant should
ever be held invalid, the foregoing covenant shall not be affected thereby and
shall remain in full force and effect.

--------------------------------------------------------------------------------

August 1, 2005

Page 11

 

EXHIBIT C

 

TO ACUITY BRANDS, INC.

AGREEMENT WITH JOHN K. MORGAN

DATED AS OF AUGUST 1, 2005

 

NON-DISCLOSURE COVENANT

 

1. DEFINITIONS

 

The following terms used in this Exhibit “C” shall have the following meanings:

 

(A) “Trade Secrets” means information, without regard to form, relating to the
Company’s business which is not commonly known by or available to the public and
which derives economic value, actual or potential, from not being generally
known to other persons and is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy or confidentiality, including, but not
limited to, technical or nontechnical data, formulae, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans, or lists of actual or potential customers or
suppliers.

 

(B) “Confidential Information” means information of the Company which is
non-public, proprietary and confidential in nature but is not a Trade Secret.

 

(C) “Person” means any individual, firm, partnership, association, corporation,
limited liability entity, trust, venture or other business organization, entity
or enterprise;

 

(D) “Restricted Period” means a period of one (1) year following termination of
Executive’s employment with the Company, other than a termination by the Company
without Cause or by Executive for Good Reason (both as defined in the Severance
Agreement).

 

2. NON-DISCLOSURE COVENANT

 

The Executive will not, directly or indirectly, for himself or on behalf of any
other Person, use for the Executive’s own benefit or disclose to any other
party, any Trade Secrets or Confidential Information of the Company; provided,
however, that Executive may make disclosures required by a valid order or
subpoena issued by a court or administrative agency

--------------------------------------------------------------------------------

August 1, 2005

Page 12

 

of competent jurisdiction, provided, further that in the event disclosure is
required by such an order or subpoena, Executive shall promptly notify the
Company prior to making any such disclosure so that the Company may seek an
appropriate protective order to protect its interests. The foregoing
confidentiality obligations shall continue (A) with respect to all Trade
Secrets, at all times so long as such Trade Secrets constitute trade secrets
under applicable law, and (B) with respect to all Confidential Information, at
all times during the Restricted Period.

 

3. SEPARABILITY

 

The Executive acknowledges that the foregoing covenant, as well as each of those
covenants set forth in Exhibits A and B to the Agreement, is a separate and
distinct obligation of the Executive and is deemed to be separable from the
remaining covenants. If any of the provisions of any other such covenant should
ever be held invalid, the foregoing covenant shall not be affected thereby and
shall remain in full force and effect.