<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period Commission File
ended June 29, 1996 Number 0-20001
NATIONAL VISION ASSOCIATES, LTD.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1910859
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
296 Grayson Highway 30245
Lawrenceville, Georgia (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(770) 822-3600
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
The number of shares of Common Stock of the registrant
outstanding as of July 17, 1996 was 20,623,996.
The Exhibit Index is located at page 13.
- ---------------------------------------------------
Page 1 of 14
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NATIONAL VISION ASSOCIATES, LTD.
FORM 10-Q INDEX
Page of
Form 10-Q
---------
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
December 30, 1995 and June 29, 1996 3
Condensed Consolidated Statements of Operations -
Three Months Ended July 1, 1995 and June 29, 1996,
and Six Months Ended July 1, 1995 and
June 29, 1996 4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended July 1, 1995 and June 29, 1996 5
Notes to Condensed Consolidated Financial
Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
PART II - OTHER INFORMATION
- ---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
Page 2 of 14
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PART I
FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
NATIONAL VISION ASSOCIATES, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 30, 1995 and June 29, 1996
(000's except share information)
<TABLE>
<CAPTION>
December 30, June 29,
1995 1996
------------ -------
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,307 $ 1,090
Accounts receivable (net of allowance: 1995-$339; 1996-$448) 2,674 4,329
Receivable from sale of French operations 3,774
Inventories 21,376 23,867
Store preopening costs (net of accumulated amortization: 1995-$775; 1996-$879) 880 482
Assets held for sale 445
Other current assets 1,011 1,711
------- -------
Total current assets 31,467 31,479
------- -------
PROPERTY AND EQUIPMENT:
Equipment 37,038 37,574
Furniture and fixtures 16,283 16,780
Leasehold improvements 12,615 12,912
Construction in progress 2,266 2,161
------- -------
68,202 69,427
Less accumulated depreciation (19,155) (22,810)
------- -------
Net property and equipment 49,047 46,617
------- -------
ORGANIZATION COSTS (net of accumulated amortization: 1995-$529; 1996-$587) 182 148
------- -------
OTHER ASSETS AND DEFERRED COSTS (net of accumulated amortization:
1995-$190; 1996-$212) 654 1,196
------- -------
$81,350 $79,440
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 8,537 $ 9,033
Accrued expenses and other current liabilities 8,007 9,402
Current portion of capital lease obligations 158 46
Current portion of capital lease obligations due to related parties 322 218
------- -------
Total current liabilities 17,024 18,699
------- -------
LONG-TERM DEBT 38,000 32,000
------- -------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value; 5,000,000 shares authorized, none issued -- --
Common stock, $.01 par value; 100,000,000 shares authorized,
20,586,505 and 20,621,196 shares issued and outstanding as
of December 30, 1995 and June 29, 1996, respectively 206 206
Additional paid-in capital 42,147 42,159
Retained deficit (11,873) (9,630)
Cumulative foreign currency exchange rate translation (4,154) (3,994)
------- -------
Total shareholders' equity 26,326 28,741
------- -------
$81,350 $79,440
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
Page 3 of 14
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<TABLE>
<CAPTION>
NATIONAL VISION ASSOCIATES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000's except per share information)
(Unaudited)
Three Months Ended Six Months Ended
------------------------- -------------------------
July 1, June 29, July 1, June 29,
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $35,725 $40,525 $72,893 $80,658
COST OF GOODS SOLD 16,586 19,133 33,252 37,824
------- ------- ------- -------
GROSS PROFIT 19,139 21,392 39,641 42,834
SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES 17,314 19,202 36,097 38,620
------- ------- ------- -------
OPERATING INCOME 1,825 2,190 3,544 4,214
OTHER EXPENSE, NET 775 507 1,326 1,164
------- ------- ------- -------
INCOME BEFORE PROVISION FOR
INCOME TAXES 1,050 1,683 2,218 3,050
PROVISION FOR INCOME TAXES 240 431 572 805
------- ------- ------- -------
NET INCOME $ 810 $ 1,252 $ 1,646 $ 2,245
======= ======= ======= =======
NET INCOME PER COMMON SHARE $ 0.04 $ 0.06 $ 0.08 $ 0.11
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
Page 4 of 14
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<TABLE>
<CAPTION>
NATIONAL VISION ASSOCIATES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(000's)
Six Months Ended
------------------------
July 1, June 29,
1995 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,646 $ 2,245
------- -------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,901 4,658
Changes in assets and liabilities:
Accounts receivable (1,715) (1,340)
Inventories 751 (2,491)
Store preopening costs (439) (115)
Other current assets (298) (700)
Assets held for sale 401 8
Provision for deferred taxes 650
Accounts payable, accrued expenses and other current liabilities (535) 1,310
------- -------
Total adjustments 3,066 1,980
------- -------
Net cash provided by (used in) operating activities 4,712 4,225
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (6,782) (1,592)
Organization costs (111) (23)
Proceeds from sale of French operations 3,400
Change in other assets 161 (113)
------- -------
Net cash provided by (used in) investing activities (6,732) 1,672
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayment) on bank line of credit 4,000 (6,000)
Net proceeds from issuance of common stock 6 3
Net repayment on long-term debt and capital leases (325) (275)
------- -------
Net cash provided by (used in) financing activities 3,681 (6,272)
------- -------
Effect of foreign currency exchange rate changes (776) 158
------- -------
NET INCREASE IN CASH 885 (217)
CASH AND CASH EQUIVALENTS, beginning of period 2,400 1,307
------- -------
CASH AND CASH EQUIVALENTS, end of period $ 3,285 $ 1,090
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
Page 5 of 14<PAGE>
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NATIONAL VISION ASSOCIATES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
June 29, 1996
(Unaudited)
-----------
(1) BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared by National Vision Associates, Ltd. (the "Company")
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations. Although management believes that the
disclosures are adequate to make the information presented not
misleading, it is suggested that these interim condensed consolidated
financial statements be read in conjunction with the Company's most
recent audited financial statements and notes thereto. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary for a fair presentation of the financial position,
results of operations, and cash flows for the interim period presented
have been made. Operating results for the interim periods presented are
not necessarily indicative of the results that may be expected for the
year ending December 28, 1996. Certain amounts in the July 1, 1995 and
December 30, 1995 condensed consolidated financial statements have been
reclassified to conform to the June 29, 1996 presentation.
Effective as of January 1, 1995, the Company changed its year end to a
52/53 week retail calendar with the fiscal year ending on the Saturday
closest to December 31. Pursuant to such calendar, financial information
for 1996 is presented for the 13-week period and 26-week period ended
June 29. Due to various statutory and other considerations,
international operations were not changed to this 52/53 week calendar.
To allow for more timely consolidation and reporting, international
operations are reported using a fiscal year ended November 30.
The net effect of these changes is not material to the condensed
consolidated financial statements.
(2) RELATED-PARTY TRANSACTIONS
During the three months ended July 1, 1995 and June 29, 1996, the
Company made lease payments of approximately $76,000 and $114,000,
respectively, to a lease finance company which is owned by a
shareholder/director of the Company. The Company made payments of
approximately $60,000 and $26,000 during the three months ended
July 1, 1995 and June 29, 1996, respectively, for insurance purchased
through an agency in which a director of the Company has a substantial
ownership interest. During the three months ended July 1, 1995 and
June 29, 1996, the Company made payments of approximately $700,000
and $182,000, respectively, for store fixtures to a company which
made certain installment payments to the spouse of the Company's
Vice Chairman, pursuant to an agreement entered into in 1992. At this
time, management does not intend to acquire store fixtures from such
company in the future.
Page 6 of 14
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(3) NET INCOME PER COMMON SHARE
Net income per common share is computed based on the weighted average
number of common stock and common stock equivalent shares outstanding
during the period. Options granted to purchase common stock have been
included in the calculation of the shares used in computing per share
information as if they were outstanding as of the date of grant, using
the treasury stock method. The weighted average number of common shares
outstanding used in the calculation is as follows (000's):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ------------------------
July 1, June 29, July 1, June 29,
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding 20,658 20,723 20,648 20,682
====== ====== ====== ======
</TABLE>
Page 7 of 14
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's results of operations in any period are
significantly affected by the number and mix of vision centers opened
and operating during such period. At June 29, 1996, the Company operated
328 vision centers, versus 318 vision centers at July 1, 1995. Since
July 1, 1995, the Company has closed or disposed of 37 locations.
Three Months Ended June 29, 1996 (the "Current Period") Compared
to Three Months Ended July 1, 1995 (the "Prior Period")
CONSOLIDATED RESULTS
NET SALES. Net sales during the Current Period increased to
$40.5 million from $35.7 million for the Prior Period due to an increase
in comparable store sales as well as to the increase in the number of
operating domestic vision centers (excluding those in Venture stores)
from 264 as of July 1, 1995 to 312 as of June 29, 1996. Average weekly
net sales per vision center increased by 9% from $8,800 during the
Prior Period to $9,600 during the Current Period. Such increase was
due to the increase in same store sales as well as to the closure
in late 1995 and early 1996 of poor performing vision centers in
Mexico and vision centers located in Venture stores.
For the Current Period comparable domestic store sales increased
6% versus the Prior Period. Management believes that new merchandising
programs, coupled with improved in-store presentation of inventory,
contributed to this increase.
Net sales from international operations decreased from $2.1 million
in the three-month period ending May 31, 1995 to $870,000 in the
comparable period ending May 31, 1996, because of the sale of the
Company's French operations and closure of certain Mexican vision
centers in 1995 and 1996.
GROSS PROFIT. For the Current Period, gross profit increased
to $21.4 million from $19.1 million in the Prior Period. This
increase was primarily due to the increase in net sales described
above. Gross profit percentage was reduced by the merchandising
programs described above, which caused certain shifts in product
mix. As enhancements to these programs have been implemented,
gross margin percentage has improved. Such percentage
decreased from 53.6% in the Prior Period to 52.8% in the Current
Period.
Page 8 of 14<PAGE>
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SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES ("SG&A expense").
SG&A expense (which includes both store operating expenses and
home office overhead) increased to $19.2 million in the Current
Period from $17.3 million for the Prior Period, reflecting
operating expenses of the additional vision centers. As a
percentage of net sales, SG&A expense was 47.4% in the Current
Period, compared to 48.5% for the Prior Period. The decrease
was attributable to the disposition of poor performing locations,
and to improved efficiencies in the operation of administrative
offices.
OTHER EXPENSE. The decrease in other expense to $507,000,
compared to $775,000 in the Prior Period, is due to reduced
interest expense, resulting from the reduction by the Company
of its outstanding borrowings under its credit facility, as well
as a reduction in interest rates.
OPERATING INCOME. Operating income for the Current Period
increased by 20% to $2.2 million from $1.8 million in the Prior
Period. The Company's international operations (16 vision
centers) generated an operating loss of $20,000 in the three months
ended May 31, 1996, as opposed to an operating loss of $355,000
in the comparable period a year ago. (See note 1 to consolidated
financial statements.) The operating loss does not include
allocated corporate overhead, interest, and taxes. The reduction
in operating loss was due to the sale of the Company's French
operations and the closure of eight unprofitable locations in
Mexico.
PROVISION FOR INCOME TAXES. The effective income tax rate in
the Current Period is comparable to that in the Prior Period. Given
the successful completion of the sale of the unprofitable Venture
domestic operations in the first quarter of 1996, the Company has
reassessed the realizability of domestic net operating loss
carryforwards and accordingly reduced the valuation allowance in
the first and second quarters. The Company expects to further
reduce the allowance through 1996 if domestic earnings continue
to improve.
NET INCOME. Net income was $1.25 million, or $0.06 per share, as
compared to net income of $810,000, or $0.04 per share, in the
Prior Period.
Page 9 of 14<PAGE>
<PAGE>
Six Months Ended June 29, 1996 (the "Current Period") Compared to
Six Months Ended July 1, 1995 (the "Prior Period")
CONSOLIDATED RESULTS
NET SALES. Net sales during the Current Period increased to
$80.7 million from $72.9 million for the Prior Period. Average
weekly net sales per vision center increased from $9,000 during
the Prior Period to $9,400 during the Current Period. Strong
comparable store sales in the second quarter along with the
dispositions and closures discussed above contributed to this
increase. Because of the dispositions and closures described above,
net sales from international operations decreased from $4.4 million
in the six-month period ended May 31, 1995 to $2.1 million in the
comparable period ended May 31, 1996.
GROSS PROFIT. For the Current Period, gross profit increased
to $42.8 million from $39.6 million in the Prior Period. This
increase was primarily due to the increased net sales described
above. Gross profit as a percentage of sales declined from
54.4% in the Prior Period to 53.1% in the Current Period. This
percentage was reduced by the merchandising programs described
above, which caused certain shifts in product mix. As enhancements
to these programs have been implemented, gross margin percentage
has improved.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES ("SG&A expense").
SG&A expense (which includes both store operating expenses and
home office overhead) increased to $38.6 million in the Current
Period from $36.1 million for the Prior Period, reflecting
operating expenses of the additional vision centers. As a
percentage of net sales, SG&A expense was 47.9% in the Current
Period, compared to 49.5% for the Prior Period. Cost reductions
from the dispositions and closures previously discussed, along
with improved administrative efficiencies, contributed to the
reduced SG&A expense.
OTHER EXPENSE. The decrease in other expense to $1.2 million,
compared to $1.3 million in the Prior Period, is due to lower
interest expense. The decrease in interest expense results from
reduced borrowings under the Company's credit facility, coupled
with a reduction in interest rates.
OPERATING INCOME. Operating income for the Current Period
increased by 19% to $4.2 million from $3.5 million in the Prior
Period. International operations generated an operating loss
(which excludes allocated corporate overhead, interest, and taxes)
of $360,000 for the six months ended May 31, 1996 as opposed to
an operating loss of $737,000 in the comparable period a year ago.
The loss for the six-month period ending May 31, 1996 is
disproportionately higher than the loss for the three-month
period ending on the same date because the six-month period
includes the last month of calendar 1995, before the Company sold
its unprofitable locations in France and closed certain unprofitable
locations in Mexico. (See note 1 to consolidated financial
statements.)
Page 10 of 14
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PROVISION FOR INCOME TAXES. The effective income tax rate in
the Current Period is comparable to that in the Prior Period.
Given the successful completion of the sale of the unprofitable
Venture domestic operations in the first quarter of 1996, the
Company has reassessed the realizability of domestic net
operating loss carryforwards and accordingly reduced the
valuation allowance in the first and second quarters. The
Company expects to further reduce the allowance through 1996
if domestic earnings continue to improve.
NET INCOME. Net income was $2.2 million, or $0.11 per share,
as compared to net income of $1.6 million, or $0.08 per share, in the
Prior Period.
RISK FACTORS. The Company's financial results depend significantly
on comparable store sales, gross margins and on SG&A expense. The
first two factors depend in large part upon the Company's merchandising
and marketing programs. Through the end of the second quarter of 1996,
these programs have increased the Company's market share and have
exerted pressure on gross margin percentage. The Company continues to
evaluate and enhance these programs.
LIQUIDITY AND CAPITAL RESOURCES
As of June 29, 1996, the Company anticipates opening 13 domestic
vision centers during the last two quarters of 1996. Average
costs to open domestic vision centers have approximated $132,000
for fixed assets, $35,000 for inventory, and $20,000 for
preopening expenses. The Company currently plans to open 5
more vision centers in Mexico in 1996. Substantially all of
the initial investment required for the new vision centers in
Mexico, including inventory, equipment and fixtures, will be
supplied from vision centers previously closed.
In the opinion of management, internally generated funds, as well as
funds available under the Company's line of credit, will be sufficient
to fund ongoing operating costs associated with its current vision
centers and costs for additional vision centers scheduled to be opened
in 1996. At June 29, 1996, the Company had borrowed $32 million
under its $45 million credit facility. Management believes that, during
1996, the Company should be able to further reduce long-term debt, subject
to operating results and the opening schedule of vision centers.
Page 11 of 14
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PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
At the 1996 Annual Meeting of Shareholders (held on May 7,
1996), the shareholders voted upon and approved management's
nominees for directors and the Company's Restated Stock Option and
Incentive Award Plan (the "Restated Plan"). The voting was as follows:
<TABLE>
<CAPTION>
DIRECTORS VOTES FOR VOTES VOTES WITHHELD ABSTENTIONS BROKER
AGAINST NON-VOTES
<S> <C> <C> <C> <C>
David I. Fuente 15,841,885 763,660
Ronald J. Green 16,091,477 514,068
Campbell B. Lanier, III 16,083,177 522,368
J. Smith Lanier, II 16,089,098 516,447
Sandra M. Buffa 16,080,599 524,946
James W. Krause 16,088,981 516,564
Edward G. Weiner 15,998,830 606,715
Restated Plan 9,875,268 995,997 62,872
</TABLE>
Page 12 of 14
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The following exhibits are filed herewith or incorporated by reference:
<TABLE>
<CAPTION>
Exhibit
Number
------
<S> <C>
Amended and Restated Articles of Incorporation of the Company 3.1*
Amended and Restated By-Laws of the Company 3.2*
Amended and Restated Articles of Incorporation of the Company
(included as Exhibit 3.1) 4.1*
Amended and Restated By-Laws of the Company
(included as Exhibit 3.2) 4.2*
Specimen Common Stock Certificate 4.3*
Statement Regarding Computation of Per Share Earnings 11**
Restated Stock Option and Incentive Award Plan 10.48**++
Financial Data Schedule 27**
*Incorporated by reference to the Company's Registration Statement on
Form S-1, registration number 33-46645, filed with the Commission on
March 25, 1992, and amendments thereto.
**Filed with this Form 10-Q.
++Management contract or compensatory plan or arrangement in which a
director or named executive officer participates.
</TABLE>
(b) Reports on Form 8-K.
The registrant filed no report on Form 8-K during the three months ended
June 29, 1996.
Page 13 of 14
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
NATIONAL VISION ASSOCIATES, LTD.
By: /s/Sandra M. Buffa
Sandra M. Buffa
Senior Vice President, Finance
(Chief Financial Officer)
July 30, 1996
Page 14 of 14<PAGE>
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EXHIBIT 10.48
NATIONAL VISION ASSOCIATES, LTD.
RESTATED STOCK OPTION AND
INCENTIVE AWARD PLAN
February 27, 1996
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NATIONAL VISION ASSOCIATES, LTD.
RESTATED STOCK OPTION AND INCENTIVE AWARD PLAN
TABLE OF CONTENTS
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION. . . . .. . . . . . . . . .1
1.1 Establishment of the Plan. . . . . . . . . . . . .. . . . . . . . . .1
1.2 Purposes of the Plan . . . . . . . . . . . . . . . . . . . . . . . . .1
1.3 Duration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 3. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . .5
3.1 The Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3.2 Authority of the Committee . . . . . . . . . . . . . . . . . . . . . .5
3.3 Committee Decisions Binding. . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 4. SHARES SUBJECT TO THE PLAN. . . . . . . . . . . . . . . . . . . .5
4.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . .5
4.2 Lapsed Grants or Awards. . . . . . . . . . . . . . . . . . . . . . . .6
4.3 Adjustments in Number of Plan Shares . . . . . . . . . . . . . . . . .6
ARTICLE 5. ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . . . . . . .6
ARTICLE 6. STOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . .6
6.1 Grant of Options . . . . . . . . . . . . . . . . . . . . . . . . . . .6
6.2 Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .7
6.3 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
6.4 Duration of Options. . . . . . . . . . . . . . . . . . . . . . . . . .7
6.5 Exercise of Options. . . . . . . . . . . . . . . . . . . . . . . . . .7
6.6 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
6.7 Termination of Employment Due to Death, Disability or Retirement . . .8
6.8 Termination of Employment for Other Reasons. . . . . . . . . . . . . .9
6.9 Nontransferability of Options. . . . . . . . . . . . . . . . . . . . .9
ARTICLE 7. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . .9
7.1 Grant of SAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
7.2 Award Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.3 Exercise of SARs . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-i-
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ARTICLE 8 STOCK AWARDS - RESTRICTED AND UNRESTRICTED . . . . . . . . . . . 10
8.1 Award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.2 Restricted Period; Lapse of Restrictions . . . . . . . . . . . . . . 11
8.3 Rights of Restricted Stock Holder; Limitations Thereon . . . . . . . 11
8.4 Delivery of Unrestricted Shares. . . . . . . . . . . . . . . . . . . 12
8.5 Nonassignability of Restricted Stock . . . . . . . . . . . . . . . . 12
ARTICLE 9. PERFORMANCE SHARES . . . . . . . . . . . . . . . .. . . . . . . 12
9.1 Grant of Performance Shares. . . . . . . . . . . . . . . . . . . . . 12
9.2 Value of Performance Shares. . . . . . . . . . . . . . . . . . . . . 13
9.3 Earning of Performance Shares. . . . . . . . . . . . . . . . . . . . 13
9.4 Form and Timing of Payment of Performance Shares . . . . . . . . . . 13
9.5 Termination of Employment Due to Death,
Disability or Retirement or by the
Company Without Cause. . . . . . . . . . . . . . . . . . . . . . . 14
9.6 Termination of Employment for Other Reasons. . . . . . . . . . . . . 14
9.7 Nontransferability . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 10. BENEFICIARY DESIGNATION. . . . . . . . . . . . . . . . . . . . 14
ARTICLE 11. DEFERRALS. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 12. RIGHTS OF PARTICIPANTS . . . . . . . . . . . . . . . . . . . . 15
12.1 Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12.2 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 13. CHANGE IN CONTROL. . . . . . . . . . . . . . . . . . . . . . . 15
13.1 Occurrence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
13.2 Definition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
13.3 Pooling of Interests Accounting . . . . . . . . . . . . . . . . . . 17
ARTICLE 14. AMENDMENT, MODIFICATION AND TERMINATION. . . . . . . . . . . . 17
14.1 Amendment, Modification and Termination . . . . . . . . . . . . . . 17
14.2 Grants or Awards Previously Granted . . . . . . . . . . . . . . . . 17
14.3 Compliance With Code Section 162(m).. . . . . . . . . . . . . . . . 18
ARTICLE 15. WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . . . . 18
15.1 Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . 18
15.2 Share Withholding . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 16. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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ARTICLE 17. LEGAL CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . 18
17.1 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . 18
17.2 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
17.3 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . 18
17.4 Regulatory Approvals and Listing. . . . . . . . . . . . . . . . . . 19
17.5 Securities Law Compliance . . . . . . . . . . . . . . . . . . . . . 19
17.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
17.7 Disputes and Expenses . . . . . . . . . . . . . . . . . . . . . . . 19
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NATIONAL VISION ASSOCIATES, LTD.
Restated Stock Option and Incentive Award Plan
ARTICLE 1. Establishment, Purpose, and Duration
1.1 Establishment of the Plan. National Vision Associates, Ltd., a
Georgia corporation (hereinafter referred to as the "Company"), hereby
establishes a stock option and incentive award plan known as the "National
Vision Associates, Ltd. Restated Stock Option and Incentive Award Plan" (the
"Plan"), as set forth in this document. The Plan permits the grant of
Non-qualified Stock Options and Incentive Stock Options, and the award of
Stock Appreciation Rights, Stock Awards (restricted or unrestricted), and
Performance Shares.
Subject to the approval of the Plan by the Company's shareholders, the
Plan shall become effective on February 27, 1996 (the "Effective Date") and
shall remain in effect as provided in Section 1.3. Any Award or Grant made
under this Plan prior to shareholder approval of the Plan shall be void unless
the Plan is approved by shareholders at the next meeting of shareholders of
the Company.
1.2 Purposes of the Plan. The purposes of the Plan are to promote
greater stock ownership in the Company by those employees who are principally
responsible for its future growth and continued success; to more closely link
the personal interests of Participants to those of the Company's
shareholders; and to provide flexibility to the Company in its ability to
motivate, attract and retain the services of Participants upon whose
judgment, initiative and special effort the continued success of the Company
depends.
1.3 Duration of the Plan. The Plan shall commence on the Effective
Date, and shall remain in effect, subject to the right of the Board to amend
or terminate the Plan at any time pursuant to Article 14, until the day prior
to the tenth (10th) anniversary of the Effective Date.
ARTICLE 2. Definitions
Whenever used in the Plan the following terms shall have the meanings
set forth below and, when the meaning is intended, the initial letter of the
word is capitalized:
(a) "Award" means, individually or collectively, any award under
this Plan of Stock Appreciation Rights, Stock Awards, or
Performance Shares.
(b) "Award Agreement" or "Option Agreement" means an agreement
entered into by each Participant and the Company, setting
forth as applicable, the terms and provisions applicable
to Awards or Grants made to Participants.
(c) "Beneficial Owner" or "Beneficial Ownership" shall have the
meaning ascribed to such term in Rule 13d-3 under the
Exchange Act.
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(d) "Board" means the Board of Directors of the Company.
(e) "Cause" means: (i) with respect to the Company or any
Subsidiary which employs the Participant or for which the
Participant primarily performs services, the commission by
the Participant of an act of fraud, embezzlement, theft
or proven dishonesty, or any other illegal act or practice
(whether or not resulting in criminal prosecution or
conviction), or any act or practice which the Committee
shall, in good faith, deem to have resulted in the
Participant's becoming unbondable under the Company's or
the Subsidiary's fidelity bond; (ii) the willful engaging
by the Participant in misconduct which is deemed by the
Committee, in good faith, to be materially injurious to
the Company or any Subsidiary, monetarily or otherwise;
or (iii) the willful and continued failure or habitual
neglect by the Participant to perform his duties with
the Company or the Subsidiary substantially in accordance
with the operating and personnel policies and procedures
of the Company or the Subsidiary generally applicable to
all their employees. For purposes of this Plan, no act
or failure to act by the Participant shall be deemed to
be "willful" unless done or omitted to be done by the
Participant not in good faith and without reasonable belief
that the Participant's action or omission was in the best
interest of the Company and/or the Subsidiary.
Notwithstanding the foregoing, if the Participant has entered
into an employment agreement that is binding as of the date
of employment termination, and if such employment agreement
defines "Cause," then the definition of "Cause" in such
agreement shall apply to the Participant in this Plan.
"Cause" under either (i), (ii) or (iii) shall be determined
by the Committee.
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(g) "Committee" means the committee appointed by the Board to
administer the Plan with respect to Grants or Awards, as
specified in Article 3.
(h) "Common Stock" means the common stock of the Company.
(i) "Company" means National Vision Associates, Ltd., a Georgia
corporation, or any successor thereto, as provided in Article
16.
(j) "Director" means any individual who is a member of the Board.
(k) "Disability" shall have the meaning ascribed to such term in
the Company's long-term disability plan covering the
Participant, or in the absence of such plan, a meaning
consistent with Section 22(e) (3) of the Code.
(l) "Effective Date" shall have the meaning ascribed to such term
in Section 1.1.
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(m) "Employee" means any full-time, salaried employee of the
Company, or of any Subsidiary.
(n) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor act thereto.
(o) "Fair Market Value" shall be determined as follows:
(i) If, on the relevant date, the Shares are traded on a
national or regional securities exchange or on the
NASDAQ National Market System and closing sale prices
for the Shares are customarily quoted, on the basis
of the quoted closing sale price or, if there is no
such sale on the relevant date, then on the last
previous day on which a sale was reported;
(ii) If, on the relevant date, the Shares are not listed on
any securities exchange or traded on the NASDAQ
National Market System, but the Shares otherwise are
publicly traded and reported by NASDAQ (but closing
sale prices for the Shares are not customary quoted),
on the basis of the mean between the closing bid and
asked quotations in such other over-the-counter
market as reported by NASDAQ; but, if there are no
bid and asked quotations in the over-the-counter
market as reported by NASDAQ on that date, then the
mean between the closing bid and asked quotations
in the over-the-counter market as reported by
NASDAQ on the last previous day such bid and asked
prices were quoted; and
(iii) If, on the relevant date, the Shares are not publicly
traded as described in (i) or (ii), on the basis of
the good faith determination of the Committee.
(p) "Grant" means, individually or collectively, any grant under
this Plan of Non-qualified Stock Options or Incentive Stock
Options.
(q) "Incentive Stock Option" or "ISO" means an option to purchase
Shares granted under Article 6 which is designated by the
Committee as an Incentive Stock Option and is intended to
meet the requirements of Section 422 of the Code.
(r) "Insider" shall mean an Employee who is, on the relevant date,
an officer or a director, or a ten percent (10%) beneficial
owner of any class of the Company's equity securities that
is registered pursuant to Section 12 of the Exchange Act,
all as defined under Section 16 of the Exchange Act.
(s) "Named Executive Officer" means a Participant who, as of the
date of vesting and/or payout of an Award or Grant, is one
of the group of "covered employees," as defined in the
regulations promulgated under Code Section 162(m), or any
successor statute.
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(t) "Non-qualified Stock Option" or "NQSO" means an option to
purchase Shares granted under Article 6, and which is not
intended to meet the requirements of Code Section 422.
(u) "Option" means an Incentive Stock Option or a Non-qualified
Stock Option.
(v) "Option Price" means the price, as determined by the Committee,
at which a Share may be purchased by a Participant pursuant
to an Option.
(w) "Participant" means an Employee who has an outstanding Grant
or Award made under the Plan.
(x) "Performance Share" means an Award granted to an Employee,
as described in Article 9 hereof.
(y) "Retirement" shall have the meaning ascribed to such term in
the pension plan for Employees, but if there is no such plan
at the relevant date, "Retirement" shall mean, with respect
to an Employee, termination of employment by the Employee
on or after (i) age 65 or (ii) age 55 after completion of
at least 10 years of service with the Company.
(z) "Restricted Stock" means restricted Shares awarded in
accordance with the terms of Article 8 and the other
provisions of the Plan.
(aa) "SAR Award Value" means, as applied to an SAR granted
independent of an Option, such amount which may be greater
than 100% but not less than 100% of the Fair Market Value
of a Share on the date the SAR is granted, as shall be fixed
by the Committee.
(ab) "Shares" means shares of Common Stock.
(ac) "Stock Award" means Shares (whether restricted or
unrestricted) awarded under the provisions of Article 8 of
the Plan.
(ad) "Stock Appreciation Right" or "SAR" means an Award of the
right to receive an amount based upon an increase in the
Fair Market Value of the Shares, as described in Article 7
hereof.
(ae) "Subsidiary" means any corporation, partnership, joint
venture or other entity in which the Company has a majority
voting interest, either direct or indirect. With respect
to a Participant, the term shall refer to the Subsidiary
for which the Participant primarily performs services.
(af) "Threatened Change in Control" means any pending tender
offer for the outstanding Shares, or any pending bona fide
offer to acquire the Company by merger or consolidation,
or any other pending action or plan to effect a Change in
Control (as defined in Section 13.2) of the Company.
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ARTICLE 3. Administration
3.1 The Committee. The Plan shall be administered by the
Compensation Committee of the Board, or by any substitute Committee appointed
by the Board that is granted authority to administer the Plan, said
Committee or substitute Committee consisting of two (2) or more Directors.
All members of the Committee must meet the "disinterested administration"
requirements of Rule 16b-3 under the Exchange Act and the "outside
director" requirements of Code Section 162(m). Qualified members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board.
3.2 Authority of the Committee. Subject to the provisions of the
Plan, the Committee shall have full and exclusive power to select Employees
who shall participate in the Plan (who may change from year to year);
determine the size and types of Awards or Grants; determine the terms and
conditions of Awards or Grants in a manner consistent with the Plan
(including vesting provisions and the duration of the Awards or Grants);
construe and interpret the Plan and any agreement or instrument entered into
under the Plan; establish, amend or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 14) amend
the terms and conditions of any outstanding Award or Grant to the extent
such terms and conditions are within the discretion of the Committee as
provided in the Plan. Further, the Committee shall make all other
determinations which may be necessary or advisable in the Committee's
opinion for the administration of the Plan.
3.3 Committee Decisions Binding. All determinations and decisions
made by the Committee pursuant to Section 3.2 above shall be final,
conclusive and binding on the Company and the Participants, their estates
and beneficiaries.
ARTICLE 4. Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section
4.3, the gross number of Shares available for Awards or Grants shall be
three million three hundred fifty thousand (3,350,000) Shares. These Shares
may, in the discretion of the Company, be either authorized but unissued Shares
or Shares purchased by the Company on the open market.
The following rules shall apply for purposes of the determination of the
number of Shares available for Grant or Award:
(a) The number of Shares underlying any outstanding Stock
Option, SAR, or Stock Award shall be counted against
the gross number of Shares authorized to be issued
under the Plan regardless of its vested status.
(b) The Committee shall determine the appropriate number
of Shares to deduct against the gross number of
Shares available hereunder in connection with the
award of Performance Shares.
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4.2 Lapsed Grants or Awards. If any Award or Grant is canceled,
terminates, expires or lapses for any reason, any Shares subject to such
Award or Grant shall again be available for issuance under the Plan.
4.3 Adjustments in Number of Plan Shares. In the event of any
change in corporate capitalization (such as a stock split or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company, any
reorganization [whether or not such reorganization comes within the definition
of such term in Code Section 368] or any partial or complete liquidation of
the Company) and to prevent dilution or enlargement of rights under this
Plan, an adjustment, as the Committee shall in its sole discretion determine
to be appropriate and equitable, shall be made in the number and class of
Shares which may be delivered under the Plan and in the number and class of
and/or price of Shares subject to outstanding Awards or Grants; provided,
however, that the number of Plan Shares subject to any Award or Grant shall
always be a whole number and the Committee shall make such adjustments as
are necessary to insure Awards or Grants of whole Shares.
ARTICLE 5. Eligibility and Participation
Any key Employee of the Company, or of any Subsidiary, whose judgment,
initiative and efforts contribute or may be expected to contribute materially
to the successful performance of the Company and its Subsidiaries shall be
eligible to receive an Award or Grant. In determining the Employees to whom
such an Award or Grant will be made, the Committee shall take into account
the duties and responsibilities of the respective Employees, their present
and potential contributions to the success of the Company and its
Subsidiaries, and such other factors as the Committee shall deem relevant in
connection with accomplishing the purposes of the Plan.
No person who is a member of the Committee shall be eligible to receive
an Award or Grant while so serving. Any person who is a Director, but who is
not an Employee, shall not be eligible to receive an Award or Grant.
ARTICLE 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Employees from time to time, as determined by
the Committee. The Committee shall have sole discretion in determining the
number of Shares underlying each Option granted to a Participant; provided,
however, that in the case of any ISO granted under the Plan, the aggregate
Fair Market Value (determined at the time such Option is granted) of the
Shares as to which ISOs are exercisable for the first time by the Participant
during any calendar year (under the Plan and all other incentive stock option
plans of the Company and any Subsidiary) shall not exceed $100,000.
The Committee may grant a Participant ISOs, NQSOs or a combination
thereof, and may vary such Grants among Participants. In no event, however,
shall any Employee who owns (within the meaning of Section 424(d) of the
Code), at the time he would otherwise be granted an Option, stock of the
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Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company be eligible to receive an
Incentive Stock Option hereunder.
The maximum number of Shares subject to Options which can be granted
under the Plan during a 12-month period to any Participant that is a Named
Executive Officer is 500,000 Shares; provided, however, that the maximum
number of Option Shares available for grant to a Participant during any 12-month
period shall be correspondingly reduced by the number of Shares underlying
any SAR awarded under Article 7 hereof to the Participant during the same
period.
6.2 Option Agreement. Each Option granted under the Plan shall
be evidenced by an Option Agreement that shall specify the Option Price, the
duration of the Option, the number of Shares to which the Option pertains and
such other provisions as the Committee shall determine. The Option Agreement
shall further specify whether the Option is intended to be an ISO within the
meaning of Code Section 422, or an NQSO, which is not intended to fall under
the provisions of Code Section 422.
6.3 Option Price. The Option Price for each ISO granted under this
Article 6 shall be not less than the Fair Market Value of a Share on the date
the ISO is granted. The Option Price of each Share underlying a NQSO shall
be established by the Committee, but in no event shall such price be less than
eighty-five percent (85%) of the Fair Market Value (or such higher percentage
of Fair Market Value as may be established by Internal Revenue Service rules
or regulations as the limit for granting discounted stock options without
causing immediate tax consequences to the Participant) of a Share on the date
the Option is granted.
6.4 Duration of Options. Each Option shall expire at such time as
the Committee shall determine at the time of grant; provided, however, that
no Options shall be exercisable later than the tenth (10th) anniversary of
its grant.
6.5 Exercise of Options. Options shall be subject to such vesting
schedules and exercise periods, and other restrictions and conditions, as the
Committee shall in each instance approve, which need not be the same for each
Grant or for each Participant. Except as the Committee may otherwise provide,
Options granted under this Plan shall not generally be exercisable prior to six
(6) months following the date of grant.
6.6 Payment. Options shall be exercised by the delivery of a
written notice of exercise to the Company, setting forth the number of Shares
with respect to which the Option is to be exercised, accompanied by full
payment for the Shares. The Option Price upon exercise of any Option shall be
payable to the Company in full either: (a) in cash, or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time
of exercise equal to the total Option Price (provided that the Shares which are
tendered must have been held by the Participant for the period required by law,
if any, prior to their tender to satisfy the Option Price), or (c) by a
combination of (a) and (b). The Committee also may allow cashless exercises,
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subject to applicable securities law restrictions, or by any other means which
the Committee determines to be consistent with the Plan's purpose and
applicable law.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in
the Participant's name, Share certificates in an appropriate amount based
upon the number of Shares purchased under the Option(s).
6.7 Termination of Employment Due to Death, Disability or
Retirement. Unless otherwise provided by the Committee in the Option
Agreement, the following rules shall apply in the event of the Participant's
termination of employment due to death, Disability or Retirement:
(a) Termination by Death. In the event the Participant
dies while actively employed, all outstanding
unvested Options granted to that Participant shall
immediately vest, and thereafter all vested Options
shall remain exercisable at any time prior to
their expiration date, or for one (1) year after
the date of death, whichever period is shorter, by
(i) such person(s) as shall have been named as the
Participant's beneficiary, (ii) such person(s) that
have acquired the Participant's rights under such
Options by will or by the laws of descent and
distribution, or (iii) the Participant's estate or
representative of the Participant's estate.
(b) Termination by Disability. In the event the employment
of the Participant is terminated by reason of
Disability, all outstanding unvested Options granted
to the Participant shall immediately vest as of the
date the Committee determines the definition of
Disability to have been satisfied, and thereafter
all vested Options shall remain exercisable at any
time prior to their expiration date, or for one (1)
year after the date that the Committee determines the
definition of Disability to have been satisfied,
whichever period is shorter.
(c) Termination by Retirement. In the event the employment
of the Participant is terminated by reason of
Retirement, the Participant shall be entitled to prorata
vesting of all outstanding unvested Options. The
prorata vesting shall be determined by the Committee,
in its sole discretion, and shall be based upon the
length of time that the Participant held the unvested
Options relative to the vesting period for each Grant
of outstanding unvested Options. Upon retirement,
vested Options shall remain exercisable at any time
prior to their expiration date, or for six (6) months
after the effective date of Retirement, whichever
period is shorter.
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6.8 Termination of Employment for Other Reasons. If the employment
of a Participant shall terminate for any reason other than the reasons set
forth in Section 6.7, and subject to the provisions of Article 13 herein, all
Options held by the Participant which are not vested as of the effective date of
his employment termination shall be immediately forfeited to the Company.
However, the Committee, in its sole discretion, shall have the right to
immediately vest all or any portion of such Options, subject to such terms as
the Committee, in its sole discretion, deems appropriate; provided, however,
that the foregoing discretion shall not be applicable with regard to Grants to
Named Executive Officers except to the extent permitted under Code Section
162(m).
In the event a Participant's employment is terminated by the Company or
Subsidiary for Cause, or such Participant voluntarily terminates his employment
(except for a Participant's voluntary termination that is not for Cause after
a Change in Control), the Participant's right to exercise any then vested
outstanding Options shall terminate immediately upon termination of
employment. If the Participant's employment is terminated by the Company or
Subsidiary without Cause, or the Participant voluntarily terminates other than
for Cause after a Change in Control, any Options vested as of his date of
termination shall remain exercisable at any time prior to their expiration date
or for six (6) months after his date of termination of employment, whichever
period is shorter.
6.9 Nontransferability of Options. Unless the Committee provides
otherwise in the Option Agreement, no Option may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution, and any attempt to sell, transfer,
pledge, assign or otherwise alienate or hypothecate an Option shall be null
and void and of no force or effect, and all Options granted to a Participant
shall be exercisable during his or her lifetime only by such Participant.
ARTICLE 7. Stock Appreciation Rights
7.1 Grant of SAR. Stock Appreciation Rights may be awarded in
conjunction with, or in addition to, any Options granted under the Plan, or
may be awarded under the Plan independent of any Option. Nothing shall
preclude the award on the same day an Option is granted (with or without related
SARs) of SARs independent of an Option. SARs granted in conjunction with,
or in addition to, an Option may be granted either at the time of the Grant
of the Option or any time thereafter during the term of the Option. SARs
awarded in conjunction with an Option shall entitle the holder of the related
Option, upon exercise, in whole or in part, of the SARS, to surrender the
Option, or any portion thereof, to the extent unexercised, and to receive a
number of Shares determined pursuant to Section 7.3 below. Such Option shall,
to the extent so surrendered, cease to be exercisable.
The maximum number of Shares underlying SARs which can be awarded under
the Plan during any 12-month period to any Participant that is a Named
Executive Officer is 500,000 Shares; provided, however, that the maximum
number of Shares available for award to a Participant during any 12-month period
shall be correspondingly reduced by the number of Shares subject to Options
granted to the Participant during the same period.
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7.2 Award Agreement. SARs shall be subject to such terms and
conditions not inconsistent with the Plan as shall from time to time be
approved by the Committee and to the following:
(a) SARs granted in conjunction with an Option shall be
exercisable at such time or times and to the extent,
but only to the extent, that the Option to which they
relate shall be exercisable.
(b) SARs not granted in conjunction with an Option shall be
exercisable at such time or times as may be
determined by the Committee at the time of grant, but
shall be subject to the same restrictions and other
rules as to duration, transferability, and
exercisability that are set out for Options in Article 6
above.
7.3 Exercise of SARs. (a) Upon exercise of SARS, the holder
thereof shall be entitled to receive a number of Shares which have an
aggregate Fair Market Value on the date of exercise equal to the amount by
which the Fair Market Value per share of one Share on the date of such exercise
shall exceed (i) in the case of SARs granted in conjunction with an Option
or in addition to an Option, the Option Price per Share of the related
Option, or (ii) in the case of SARs unrelated to an Option, its SAR Award Value,
in each case multiplied by the number of Shares in respect of which the SARs
shall have been exercised.
(b) All or any part of the obligation arising out of an exercise of
SARS, whether or not such SARs are granted in conjunction with an Option, may
in the sole discretion of the Committee (and consistent with the
requirements of Rule 16b-3 of the Exchange Act) be settled by the payment of
cash equal to the aggregate Fair Market Value of the Shares that would
otherwise have been delivered under subsection (a) above.
(c) To the extent that SARs granted in conjunction with an Option
shall be exercisable and regardless of whether the obligation upon such
exercise shall be discharged by the delivery of Shares or the payment of
cash, the Option in connection with which such SAR shall have been granted shall
be deemed to have been exercised for the purpose of the maximum share
limitation set forth in the Plan.
(d) To the extent that SARs granted in addition to, or independent
of, an Option shall be exercised and regardless of whether the obligation
upon such exercise shall be discharged by the delivery of Shares or the
payment of cash, the number of Shares in respect of which the SARs shall have
been exercised shall be charged against the maximum share limitation set
forth in the Plan.
ARTICLE 8 Stock Awards - Restricted and Unrestricted
8.1 Award. The Committee may from time to time in its discretion
make Stock Awards to Participants and may determine the number of Shares to
be awarded. The Committee shall determine the terms and conditions of, and
the amount of payment, if any, to be made by the Participant for such Stock
Award. An Award of Restricted Stock may require the Participant to pay for
such Shares of Restricted Stock, but the Committee may establish a price
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below Fair Market Value at which the Participant can purchase the Shares of
Restricted Stock. Each Award of Restricted Stock will be evidenced by an Award
Agreement containing terms and conditions not inconsistent with the Plan as
the Committee shall determine to be appropriate in its sole discretion.
The maximum number of Shares that may be awarded under a Stock Award
(whether restricted or unrestricted) to a Named Executive Officer during any
12-month period is 500,000 Shares.
8.2 Restricted Period; Lapse of Restrictions. At the time an Award
of Restricted Stock is made, the Committee shall establish a period or
periods of time (the "Restricted Period") applicable to such Award which,
unless the Committee otherwise provides, shall not be less than six (6) months.
Subject to the other provisions of this Article 8, at the end of the
Restricted Period all restrictions shall lapse and the Restricted Stock shall
vest in the Participant. At the time an Award is made, the Committee may, in
its discretion, prescribe conditions for the incremental lapse of
restrictions during the Restricted Period and for the lapse or termination of
restrictions upon the occurrence of other conditions in addition to or other
than the expiration of the Restricted Period with respect to all or any portion
of the Restricted Stock. Such conditions may, but need not, include without
limitation:
(a) The death, Disability or Retirement of the Employee to
whom Restricted Stock is awarded, or
(b) The occurrence of a Change in Control or Threatened
Change in Control.
The Committee may also, in its discretion, shorten or terminate the Restricted
Period, or waive any conditions for the lapse or termination of restrictions
with respect to all or any portion of the Restricted Stock at any time after
the date the Award is made.
8.3 Rights of Restricted Stock Holder; Limitations Thereon. Upon an
Award of Restricted Stock, a stock certificate (or certificates) representing
the number of Shares of Restricted Stock granted to the Participant shall be
registered in the Participant's name and shall be held in custody by the
Company or a bank selected by the Committee for the Participant's account.
Following such registration, the Participant shall have the rights and
privileges of a shareholder as to such Restricted Stock, including the right
to receive dividends and to vote such Restricted Stock, provided that, the
right to receive cash dividends shall be the right to receive such dividends
either in cash currently or by payment in Restricted Stock, as the Committee
shall determine, and provided further that the following restrictions shall
apply:
(a) The Participant shall not be entitled to delivery of a
certificate until the expiration or termination of
the Restricted Period for the Shares represented by
such certificate and the satisfaction of any and all
other conditions prescribed by the Committee;
(b) None of the Shares of Restricted Stock may be sold,
transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted
Period and until the satisfaction of any and all
other conditions prescribed by the Committee; and
-11-<PAGE>
<PAGE>
(c) All of the Shares of Restricted Stock that have not
vested shall be forfeited and all rights of the
Participant to such Shares of Restricted Stock shall
terminate without further obligation on the part of
the Company, unless the Participant has remained an
Employee, until the expiration or termination of the
Restricted Period and the satisfaction of any and all
other conditions prescribed by the Committee
applicable to such Shares of Restricted Stock. Upon
the forfeiture of any Shares of Restricted Stock,
such forfeited Shares shall be transferred to the
Company without further action by the Participant.
With respect to any Shares received as a result of adjustments under
Section 4.3 hereof and any Shares received with respect to cash dividends
declared on Restricted Stock, the Participant shall have the same rights and
privileges, and be subject to the same restrictions, as are set forth in this
Article 8.
8.4 Delivery of Unrestricted Shares. Upon the expiration or
termination of the Restricted Period for any Shares of Restricted Stock and
the satisfaction of any and all other conditions prescribed by the Committee,
the restrictions applicable to such Shares of Restricted Stock shall lapse and
a stock certificate for the number of Shares of Restricted Stock with respect
to which the restrictions have lapsed shall be delivered, free of all such
restrictions except any that may be imposed by law, to the holder of the
Restricted Stock. The Company shall not be required to deliver any fractional
Share but will pay, in lieu thereof, the Fair Market Value (determined as of
the date the restrictions lapse) of such fractional share to the holder
thereof. Prior to or concurrently with the delivery of a certificate for
Restricted Stock, the holder shall be required to pay an amount necessary to
satisfy any applicable federal, state and local tax requirements as set out
in Article 15 below.
8.5 Nonassignability of Restricted Stock. Unless the Committee
provides otherwise in the Award Agreement, no Award of, nor any right or
interest of a Participant in or to any Restricted Stock, or in any instrument
evidencing any Award of Restricted Stock, may be assigned, encumbered or
transferred except, in the event of the death of a Participant, by will or
the laws of descent and distribution.
ARTICLE 9. Performance Shares
9.1 Grant of Performance Shares. Subject to the terms of the Plan,
Performance Shares may be granted to Participants from time to time for no
payment. The Committee shall have complete discretion in determining the
number of Performance Shares granted to each Participant; provided, however,
that unless and until the Company's shareholders vote to change the maximum
number of Performance Shares that may be earned by any one Named Executive
Officer (subject to the terms of Article 14 hereof), none of the Named
Executive Officers may earn more than 500,000 Performance Shares with
respect to any performance period.
-12-<PAGE>
<PAGE>
9.2 Value of Performance Shares. Each Performance Share shall have
a value equal to the Fair Market Value of a Share on the date the Performance
Share is earned. The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will determine the number
of Performance Shares that will be earned by the Participants. The time
period during which the performance goals must be met shall be called a
"performance period." Performance periods shall, in all cases, equal or
exceed two (2) years in length. The performance goals shall be established at
the beginning of the performance period (or within such time period as is
permitted by Code Section 162(m) and the regulations thereunder).
The Committee will select one or more of the following performance
measures for purposes of Awards to Named Executive Officers: total
shareholder return, average return on assets, average return on equity,
average growth in assets, increase in operating earnings per share, increase in
book value per Share, and ratio of operating revenue to operating overhead.
The Committee, in its sole discretion, may assign the relative weights to be
given to each performance measure selected by it. For Participants other than
Named Executive Officers, the Committee may, in its sole discretion, select
such performance measures (from among those described above or other) as it
may deem appropriate, and may assign the relative weights to be given to each
performance measure selected by it. The Committee may, in its sole discretion,
reserve the right to exclude the effect of extraordinary and non-recurring
items from calculations involving any performance measure.
In the event that applicable tax and/or securities laws (including, but
not limited to, Code Section 162(m) and Section 16 of the Exchange Act)
change to permit Committee discretion to alter the governing performance
measures without obtaining shareholder approval of such changes, the Committee
shall have sole discretion to make such changes without obtaining shareholder
approval.
9.3 Earning of Performance Shares. After the applicable performance
period has ended, the Committee shall certify the extent to which the
established performance goals have been achieved. The Committee may increase
or decrease the amount of any Performance Share payment otherwise payable to
a Participant under this Article 9 if, in the Committee's view, the Company's
financial performance during the relevant performance period justifies such
adjustment, whether or not any one or more of the established performance
goals has been achieved; provided, however, that the Committee shall have no
discretion to increase the amount of any Performance Share otherwise payable
to a Named Executive Officer under this Article 9.
9.4 Form and Timing of Payment of Performance Shares. Except as
otherwise provided in Article 13 hereof, payment of earned Performance Shares
shall be made in a single lump sum as soon as practicable after the end of
the performance period to which the Award relates. The Committee, in its sole
discretion, may pay earned Performance Shares in the form of cash or in
Shares (or in a combination thereof) which have, as of the last day of the
performance period, an aggregate value equal to the Fair Market Value of the
earned Performance Shares.
-13-
<PAGE>
<PAGE>
9.5 Termination of Employment Due to Death, Disability or Retirement
or by the Company Without Cause. Unless the Award Agreement provides
otherwise, in the event the employment of a Participant is terminated by
reason of death, Disability or Retirement or by the Company without Cause during
a performance period, the Participant shall be entitled to a prorated payout
with respect to the unearned Performance Shares. The prorated payout shall
be determined by the Committee, in its sole discretion, and shall be based
upon the length of time that the Participant held the unearned Performance
Shares during the performance period relative to the performance period, and
shall be the greater of the target award prorated for the applicable time
period, or the payout earned on the basis of actual performance, measured by the
achievement of the established performance goals prorated to the time of his
termination due to death, Disability or Retirement or by the Company without
Cause.
Payment of earned Performance Shares to Participants whose termination
is due to Retirement or by the Company without Cause shall be made at the
same time payments are made to Participants who did not terminate employment
during the applicable performance period. Payment of earned Performance Shares
to Participants whose termination is due to death or Disability shall be made
as soon as practicable after the Participant's termination.
9.6 Termination of Employment for Other Reasons. Except as provided
in Article 13 and in the Award Agreement, in the event that a Participant's
employment terminates during a performance period for any reason other than
those reasons set forth in Section 9.5 hereof, all unearned Performance Shares
shall be forfeited by the Participant to the Company.
9.7 Nontransferability. Performance Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, a
Participant's Performance Share rights under the Plan shall be exercisable
during the Participant's lifetime only by the Participant or the
Participant's legal representative.
ARTICLE 10. Beneficiary Designation
Each Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his death before he receives
any or all of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company and shall be effective only when filed by the Participant in writing,
with the Company during the Participant's lifetime. In the absence of any
such designation, benefits remaining unpaid at the Participant's death shall
be paid to the Participant's estate.
-14-
<PAGE>
<PAGE>
ARTICLE 11. Deferrals
The Committee may permit a Participant to defer to another plan or
program such Participant's receipt of Shares or cash that would otherwise be
due to such Participant by virtue of the exercise of an Option or SAR, the
vesting of Restricted Stock or the earning of Performance Shares. If any such
deferral election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.
ARTICLE 12. Rights of Participants
12.1 Employment. Nothing in the Plan shall interfere with or limit
in any way the right of the Company or a Subsidiary to terminate any
Participant's employment at any time, nor confer upon any Participant any
right to continue in the employ of the Company or a Subsidiary. For purpose of
the Plan, transfer of employment of a Participant between the Company and any
one of its Subsidiaries (or between Subsidiaries) shall not be deemed a
termination of employment.
12.2 Participation. No Employee shall have the right to be selected
to receive an Award or Grant, or, having been so selected, to be selected to
receive a future Award or Grant.
ARTICLE 13. Change in Control
13.1 Occurrence. Upon (a) the occurrence of a Change in Control, or
upon the termination of a Participant by the Company or a Subsidiary other
than for Cause as a result of a Threatened Change in Control, and (b)
approval of the Committee (in its discretion), and except as provided in the
Award Agreement, Option Agreement or Section 13.3, or as prohibited by the terms
of Article 17 hereof:
(a) All outstanding, unvested Options and SARs granted or
awarded to Participants hereunder (or, in the case of
the termination of a Participant by the Company or a
Subsidiary other than for Cause as a result of a
Threatened Change in Control, to the terminated
Participant) shall become fully vested and
immediately exercisable;
(b) To the extent provided by the Committee in the Award
Agreement, the earning of unearned Performance Shares
will be based upon the target award levels or the
actual performance compared with goals prorated to
the date of the Change in Control or to the date of
the Participant's termination by the Company or
Subsidiary other than for Cause as a result of a
Threatened Change in Control, whichever provides the
greater amount. Unearned Performance Shares outstanding
at the time of a Change in Control or at the time of
a Participant's termination by the Company or Subsidiary
other than for Cause as a result of a Threatened Change
in Control will be fully vested (subject to the
employment requirements in the next sentence) and will
be payable in Common Stock or cash, or a combination
thereof as determined by the Committee. The
Participant will be entitled to payment of vested
-15-<PAGE>
<PAGE>
Performance Shares for a performance period only if
(i) he remains employed by the Company or Subsidiary
(or their respective successors) until the date that
would have been the last day of the performance
period, at which time the payment of the Performance
Shares shall be made, or (ii) prior to the end of the
performance period, (x) his employment is terminated
by the Company or Subsidiary without Cause, (y) he
terminates employment for a reason other than Cause or
(z) he retires (whether early, nominal or late) under
the Retirement Plan, dies or becomes Disabled. In any
of these cases, payment of vested Performance Shares
shall be made as soon as possible after the
Participant ceases active employment.
(c) Unless otherwise provided in the Award Agreement, all
restrictions on an Award of Restricted Stock shall
lapse and such Restricted Stock shall be delivered to
the Participant in accordance with Section 8.4; and
(d) Subject to Article 14 hereof, the Committee shall have
the authority to make any modifications to the Awards
or Grants as determined by the Committee to be
appropriate before the effective date of the Change
in Control or the date of the Participant's
termination by the Company or Subsidiary other than for
Cause as a result of a Threatened Change in Control.
13.2 Definition. For purposes of the Plan, a "Change in Control"
shall be deemed to have occurred if:
(a) 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
(b) more than 35% of the then outstanding shares of Common
Stock 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
(c) 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
-16-<PAGE>
<PAGE>
(d) the occurrence of any other event or circumstance which
is not covered by (a) through (c) above which the
Committee determines affects control of the Company and
constitutes a Change in Control for purpose of the Plan.
13.3 Pooling of Interests Accounting. No Award or Grant shall have a
scheduled vesting date which is earlier than the date two years following the
Effective Date. During the two-year period commencing on the Effective Date,
the acceleration of vesting provided for in Section 13.1 shall not apply in a
transaction involving a Change in Control if both of the following circumstances
exist:
(a) The provisions contained in Section 13.1 create
conditions which would preclude the use of pooling of
interests accounting, and
(b) The completion of the transaction is subject to the use
of pooling of interests accounting.
ARTICLE 14. Amendment, Modification and Termination
14.1 Amendment, Modification and Termination. The Board may, at any
time and from time to time, alter, amend, suspend or terminate the Plan in
whole or in part; provided, that, unless approved by the holders of a
majority of the total number of Shares represented and entitled to vote at a
meeting at which a quorum is present, no amendment shall be made to the Plan
if such amendment would (a) materially modify the eligibility requirements
provided in Article 5; (b) increase the total number of Shares (except as
provided in Section 4.3) which may be granted or awarded under the Plan, as
provided in Section 4.1; (c) extend the term of the Plan; or (d) amend the
Plan in any other manner which the Board, in its discretion, determines
should become effective only if approved by the shareholders even though such
shareholder approval is not expressly required by the Plan or by law. No
amendment which requires shareholder approval in order for the Plan to
continue to comply with Rule 16b-3 under the Exchange Act, including any
successor to such Rule, shall be effective unless such amendment shall be
approved by the requisite vote of shareholders.
14.2 Grants or Awards Previously Granted. No termination, amendment
or modification of the Plan shall adversely affect in any material way any
Award or Grant previously made under the Plan, without the written consent of
the Participant holding such Award or Grant. The Committee shall, with the
written consent of the Participant holding such Award or Grant, have the
authority to cancel Awards or Grants outstanding and grant replacement Awards
or Grants therefor.
-17-
<PAGE>
<PAGE>
14.3 Compliance With Code Section 162(m). It is the intent of the
Board that all Awards or Grants shall comply with the requirements of Code
Section 162(m). In the event changes are made to Code Section 162(m) to
permit greater flexibility with respect to any Award or Grant, the Committee
may, subject to this Article 14, make any adjustments it deems appropriate
in such Award or Grant.
ARTICLE 15. Withholding
15.1 Tax Withholding. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising in connection with an Award or
Grant.
15.2 Share Withholding. With respect to withholding required upon
the exercise of Options, or upon any other taxable event arising as a result
of Awards or Grants which are to be paid in the form of Shares, Participants
may request, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined
equal to the minimum statutory total tax which could be imposed on the
transaction. All such requests shall be irrevocable, made in writing, and
signed by the Participant, and requests by Insiders shall additionally comply
with all legal requirements applicable to Share transactions by such
Participants.
ARTICLE 16. Successors
All obligations of the Company under the Plan, with respect to Awards
or Grants, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 17. Legal Construction
17.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
17.2 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been included.
17.3 Requirements of Law. The making of Awards or Grants and the
issuance of Shares under the Plan shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
-18-
<PAGE>
<PAGE>
17.4 Regulatory Approvals and Listing. The Company shall not be
required to issue any certificate or certificates for Shares under the Plan
prior to (i) obtaining any approval from any governmental agency which the
Company shall, in its discretion, determine to be necessary or advisable,
(ii) the admission of such shares to listing on any national securities
exchange on which the Shares may be listed, and (iii) the completion of any
registration or other qualification of the Shares under any state or federal
law or ruling or regulations of any governmental body which the Company shall,
in its sole discretion, determine to be necessary or advisable.
Notwithstanding any other provision set forth in the Plan, any
"derivative security" or "equity security" offered pursuant to the Plan to
any Insider may not, if required by the then-current Section 16 of the
Exchange Act, be sold or transferred for at least six (6) months after the date
of grant of such Award. The terms "equity security" and "derivative
security" shall have the meanings ascribed to them in the then-current
Rule 16(a) under the Exchange Act.
The Committee may impose such restrictions on any Shares acquired
pursuant to the Plan as it may deem advisable, including, without limitation,
restrictions under applicable federal securities laws, under the requirements
of any stock exchange or market upon which such Shares are then listed and/or
traded and under any blue sky or state securities laws applicable to such
Shares.
17.5 Securities Law Compliance. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provisions of the Plan or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
17.6 Governing Law. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Georgia.
17.7 Disputes and Expenses. After a Change in Control or a
Participant's termination by the Company or Subsidiary other than for Cause
as a result of a Threatened Change in Control, if a Participant affected by
such Change in Control or termination incurs legal fees or other expenses in
seeking to obtain or enforce any rights to benefits under this Plan and is
successful, in whole or in part, in obtaining or enforcing any such rights
through settlement, litigation, arbitration or otherwise, the Company shall
promptly pay the affected Participant's reasonable legal fees and expenses
incurred in enforcing his rights under the Plan.
AS APPROVED BY THE BOARD OF DIRECTORS OF NATIONAL VISION ASSOCIATES,
LTD. ON FEBRUARY 27, 1996.
NATIONAL VISION ASSOCIATES, LTD.
/s/James W. Krause
By: James W. Krause
ATTEST:
/s/Mitchell Goodman
By: Mitchell Goodman
Secretary
-19-
<TABLE>
<CAPTION>
EXHIBIT 11
NATIONAL VISION ASSOCIATES, LTD.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(000's except net income per common share information)
Three Months Ended Six Months Ended
----------------------- -------------------
July 1, June 29, July 1, June 29,
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET INCOME $ 810 $ 1,252 $ 1,646 $ 2,245
======= ======= ======= =======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 20,530 20,615 20,523 20,608
Common stock equivalents using
the treasury stock method 128 108 125 74
------- ------- ------- -------
AVERAGE COMMON SHARES
OUTSTANDING AS ADJUSTED 20,658 20,723 20,648 20,682
======= ======= ======= =======
NET INCOME PER COMMON SHARE $ 0.04 $ 0.06 $ 0.08 $ 0.11
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT JUNE 29, 1996 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 29, 1996 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000868263
<NAME> NATIONAL VISION ASSOCIATES, LTD.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> JUN-29-1996
<CASH> 1,090
<SECURITIES> 0
<RECEIVABLES> 4,777
<ALLOWANCES> 448
<INVENTORY> 23,867
<CURRENT-ASSETS> 31,479
<PP&E> 69,427
<DEPRECIATION> 22,810
<TOTAL-ASSETS> 79,440
<CURRENT-LIABILITIES> 18,699
<BONDS> 0
0
0
<COMMON> 206
<OTHER-SE> 28,535
<TOTAL-LIABILITY-AND-EQUITY> 79,440
<SALES> 80,658
<TOTAL-REVENUES> 80,658
<CGS> 37,824
<TOTAL-COSTS> 37,824
<OTHER-EXPENSES> 38,620
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,164
<INCOME-PRETAX> 3,050
<INCOME-TAX> 805
<INCOME-CONTINUING> 2,245
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,245
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
