**Exhibit10.26**

 

PERFORMANCE UNIT AWARD

 

THISAGREEMENT, made as of the 29th day of June 2004 (the “Grant Date”), betweenNational 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 areprincipally responsible for the future growth and continued success of theCompany; and

 

WHEREAS,the Compensation Committee responsible for administration of the Plan hasdetermined 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                                 TheCompany 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 2below based upon the performance of the Company and its subsidiaries during thePerformance Period as expressed in the performance goal, all as set forth onAppendix A, attached hereto and make an integral part of this Agreement.  As provided in the Plan, Grantee’s right topayment of this Award is dependent upon Grantee’s continued employment with theCompany during the Performance Period. Under certain circumstances as described below, Grantee may be entitledto receive payment for some portion of the Award if Grantee’s employmentterminates prior to the end of the Performance Period in accordance with thePlan and Section 4 of this Agreement.

 

1.2                                 TheGrantee hereby acknowledges receipt of a copy of the Plan and agrees to bebound 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 byreference) and, except as otherwise expressly set forth herein, the capitalizedterms used in this Agreement shall have the same meaning as the definitions asset forth in the Plan.

 

2.                                       Performance Measure and PerformanceLevels.

 

TheCommittee has established the performance goal (the “Performance Goal”), andaward levels set forth in Appendix A attached hereto for the PerformancePeriod. Subject to the terms of the Plan, Grantee will receive a paymentdetermined in accordance with and as set forth in Appendix A for eachPerformance Unit awarded.  ThePerformance Goal is based on stock price appreciation of the common stock ofthe Company during the Performance Period.

 

----

 

3.                                       Determination of Performance Unit Award.

 

3.1                                 AwardDetermination.  As soon as practicalfollowing the last day of the Performance Period, the Committee will determinethe Average Price (as defined in Appendix A).

 

3.2                                 DeterminationNotice.  The Company will notify theGrantee (or the Grantee’s beneficiary or the executors or administrators of theGrantee’s estate, if applicable) of the Committee’s determination (the “DeterminationNotice”) of the amount of the Award earned for the Performance Period.  The Determination Notice shall specify thePerformance Goal achieved by the Company for the Performance Period and theamount of the Award (if any) Grantee will be entitled to receive.  All performance units shall be paid in cashno later than 2-1/2 months after the end of the Performance Period, notwithstandingSection 5(b) of the Plan.

 

4.                                       Termination of Employment.

 

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

 

4.1                                 Ifthe Grantee dies, retires, is assigned to a different position that theCommittee determines would not be eligible for continued participation in thePlan, or is granted a leave of absence, during the Performance Period, Grantee’sAward will be prorated for the number of months of active employment andparticipation in the Plan during the Performance Period.

 

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

 

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

 

5.                                       Change in Control.

 

NotwithstandingSection 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 theAward will be earned as of the date the Triggering Event occurs as if 100% ofthe Performance Goals had been attained. Payment of the earned Award in the manner described in Section 3.2 of thisAgreement will be made within one hundred twenty (120) days after the lastevent constituting a part of the Triggering Event occurs and, upon suchpayment, Grantee shall have no further rights under this Agreement and the Planwith respect to any Award.  For purposesof the foregoing, a “Triggering Event” shall mean a Change in Control followedby 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 theGrantee, as defined in Appendix A, or (c), within 365 days of the Change inControl, the termination by the Company of the Grantee’s employment for reasonsother than Cause, as defined in Appendix A.

 

2

----

 

TheCommittee may, in the exercise of its discretion granted under the Plan, reduceany Award or adjust Performance Goals as the Committee determines to beappropriate, as provided under the Plan, at any time before the effective dateof a Change in Control.

 

6.                                       No Right to Continued Employment.

 

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

 

7.                                       Nonassignment.

 

The Grantee shall nothave the right to assign, alienate, pledge, transfer or encumber any amountsdue Grantee hereunder, and any attempt to assign, alienate, pledge, transfer,or encumber Grantee’s rights or benefits shall be null and void and notrecognized by the Plan or the Company.

 

8.                                       Modification of Agreement.

 

Except as otherwiseprovided in Section 5, this Agreement may be modified, amended, suspended orterminated, and any terms or conditions may be waived, but only by a writteninstrument executed by the parties hereto.

 

9.                                       Severability; Governing Law

 

Should any provision ofthis Agreement be held by a court of competent jurisdiction to be unenforceableor invalid for any reason, the remaining provisions of this Agreement shall notbe affected by such holding and shall continue in full force in accordance withtheir terms.

 

The validity,interpretation, construction and performance of this Agreement shall be governedby the laws of the State of Georgia without giving effect to any choice orconflict of law provision or rule (whether of the State of Georgia or any otherjurisdiction) that would cause the application of the laws of any jurisdictionother than the State of Georgia.

 

10.                                 Successors in Interest.

 

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

 

11.                                 Resolution of Disputes.

 

Anydispute or disagreement which may arise under, or as a result of, or in any wayrelate to, the interpretation, construction or application of this Agreementshall be

 

3

----

 

determined by the Committee.  Anydetermination made hereunder shall be final, binding and conclusive on theGrantee and the Company for all purposes.

 

12.                                 Withholding of Taxes.

 

TheCompany shall have the right to deduct from any amount payable under thisAgreement, an amount equal to the federal, state and local income taxes andother amounts as may be required by law to be withheld with respect to any suchamount.

 

13.                                 Compliancewith Sarbanes-Oxley

 

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

 

 
|   | NATIONAL VISION,  INC. |
|--------|------------------------|
|   |                   |
|   |  By:              |   |   |
|   |                   |   |   |
|   |                   | President and Chief Executive Officer |
|   |                   |   |
|   |                   |   |
|   |                   |   |
|   |                   | Name of Grantee: |
|        |                        |  |  |  |

 

4

----

 

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 whichthe Average Price (as defined below) exceeds the Fair Market Value (as definedbelow).

 

Average Price:  the average closing sale price of the commonstock of the Company (as reported by the American Stock Exchange or the primarystock exchange or over the counter market upon which the common stock of theCompany is then traded) during the 20 consecutive trading days ending on June29, 2007.

 

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

 

VoluntaryTermination: termination of employment with the Company thatis 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’stitle and status in effect prior to the Change in Control, or an adversealteration in the nature or status of the Grantee’s responsibilities at theCompany from those in effect immediately prior to the Change in Control (otherthan any such alteration primarily attributable to the fact that the Companymay no longer be a public company);

 

(ii) areduction by the Company of the Grantee’s base salary from such salary ineffect prior to the Change in Control;

 

(iii)the relocation of the Company’s principal executive offices to a locationoutside of the Atlanta, Georgia metropolitan area, or the Company’s requiringthe Grantee to be based anywhere other than the Company’s principal executiveoffices, except for required travel on the Company’s business to an extentsubstantially consistent with the Grantee’s present business travelobligations;

 

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

 

5

----

 

installmentof deferred compensation under any deferred compensation program of theCompany, 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 whichthe Grantee participates immediately prior to the Change in Control, which ismaterial to the Grantee’s total compensation, including but not limited to theCompany’s annual bonus plan, 2004 Equity Incentive Plan, or any predecessor orsubstitute plans adopted prior to the Change in Control, unless an equitablearrangement (embodied in an ongoing substitute or alternative plan) has beenmade with respect to such plan, or the failure by the Company to continue theGrantee’s participation in such plan (or in such substitute or alternativeplan) on a basis not materially less favorable, both in terms of the amount ofbenefits provided and the level of the Grantee’s participation relative toother participants, as existed at the time of the Change in Control; or

 

(vi)  the failure by the Company to continue toprovide the Grantee with benefits substantially similar to those enjoyed by theGrantee under any of the Company’s life insurance, medical, health and accidentor disability plans in which the Grantee was participating at the time of theChange in Control, the taking of any action by the Company which would directlyor indirectly materially reduce any of such benefits or deprive the Grantee ofany material fringe benefit enjoyed by the Grantee at the time of the Change inControl.

 

A termination shall notbe considered a Voluntary Termination if such termination is the result ofCause, Disability, or death of the Grantee. The Grantee’s continued employment shall not constitute consent to, or awaiver of rights with respect to, any act or failure to act relating toVoluntary 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 inmaterial injury to the Company, or (ii) the Grantee’s material breach of thisAgreement, or (iii) the Grantee’s conviction of a felony or crime involving moralturpitude.  A termination of the Granteefor “Cause” based on clause (i) or (ii) of the preceding sentence shall takeeffect thirty (30) days after the Company gives written notice of suchtermination to the Grantee specifying the conduct deemed to qualify as Cause,unless the Grantee shall, during such 30-day period, remedy the events orcircumstances constituting Cause to the reasonable satisfaction of theCompany.  A termination for Cause basedon clause (iii) above shall take effect immediately upon giving of thetermination notice.

 

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

 

6

----