<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
NATIONAL VISION ASSOCIATES, LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
NATIONAL VISION ASSOCIATES, LTD.
296 GRAYSON HIGHWAY
LAWRENCEVILLE, GEORGIA 30245
(770) 822-3600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1997
To the Shareholders:
The Annual Meeting of Shareholders of National Vision Associates, Ltd., a
Georgia corporation, will be held at the Gwinnett Civic and Cultural Center,
Duluth, Georgia, on Tuesday, April 29, 1997, at 11:00 a.m., for the following
purposes:
1. To elect a Board of six Directors to serve for the ensuing year.
2. To approve the Restated Non-Employee Director Stock Option Plan.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record at the close of business on Monday, February
24, 1997, will be entitled to vote at this meeting.
A proxy statement and a proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date, and return the proxy promptly in the
enclosed business reply envelope. If you attend the meeting, you may, if you
wish, withdraw your proxy and vote in person.
By order of the Board of Directors,
MITCHELL GOODMAN
Secretary
Lawrenceville, Georgia
March 7, 1997
PLEASE COMPLETE AND RETURN THE ENCLOSED
PROMPTLY SO THAT YOUR VOTE MAY BE RECORDED AT
THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE> 3
NATIONAL VISION ASSOCIATES, LTD.
PROXY STATEMENT
GENERAL
The Board of Directors (the "Board") of National Vision Associates, Ltd., a
Georgia corporation (the "Company"), is soliciting the enclosed proxy for use at
the 1997 Annual Meeting of Shareholders (the "Meeting") to be held on April 29,
1997. Only shareholders of record at the close of business on February 24, 1997,
will be entitled to vote at the Meeting. On February 24, 1997, the Company had
issued and outstanding 20,652,160 shares of Common Stock ("Common Stock").
The Company's principal executive offices are located at 296 Grayson
Highway, Lawrenceville, Georgia 30245. The approximate date on which this proxy
statement and the accompanying proxy are being first sent to shareholders is
March 7, 1997.
VOTING
Each of the 20,652,160 shares of Common Stock outstanding as of the record
date entitles the holder to notice of, and vote on, each matter to be presented
at the Meeting or any adjournments thereof. Each share is entitled to one vote.
Except for the election of directors, the affirmative vote of the holders of a
majority of the voting shares of Common Stock present in person or by proxy at
the Meeting is required for approval of each matter expected to be acted upon at
the Meeting. Directors are elected by a plurality of the votes cast by the
shares entitled to vote. An automated system administered by the Company's
transfer agent tabulates the votes. Abstentions and "broker non-votes" (i.e.,
proxies from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
as to a matter with respect to which the brokers or nominees do not have
discretionary power to vote) will be treated as present for purposes of
determining the presence of a quorum, but will otherwise have no effect on the
election of directors. For purposes of determining approval of a matter
presented at the Meeting other than the election of directors, abstentions will
be deemed present and entitled to vote and will, therefore, have the same legal
effect as a vote "against" a matter presented at the Meeting. Broker non-votes
will be deemed not entitled to vote on the subject matter as to which the
non-vote is indicated and will, therefore, have no legal effect on the vote on
that particular matter.
REVOCABILITY OF PROXIES
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. It may be revoked by
filing with the Secretary of the Company an instrument of revocation or by the
presentation at the Meeting of a duly executed proxy bearing a later date. It
may also be revoked by attendance at the Meeting and election to vote in person.
SOLICITATION
The Company will bear the entire cost of preparing, assembling, printing
and mailing this proxy statement, the accompanying proxy and any additional
material which may be furnished to shareholders by the Company. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries and
custodians to forward to beneficial owners of stock held in their name. The
solicitation of proxies will be made by the use
<PAGE> 4
of the mails and through direct communication with certain shareholders or their
representatives by officers, directors and employees of the Company, who will
receive no additional compensation therefor.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive an annual retainer of
$10,000. Non-employee directors who also serve on committees receive additional
compensation as follows: for each committee meeting attended, the Chairman of
the committee receives $2,000, and each committee member receives $1,000. Non-
employee directors are also eligible to participate in the Non-Employee Director
Stock Option Plan, which will terminate in July 1997. Under this stock option
plan, the four non-employee directors (Messrs. David I. Fuente, Ronald J. Green,
Campbell B. Lanier, III, and J. Smith Lanier, II) serving on the date of
adoption of this plan (July 1992) were each granted an option to purchase 30,000
shares of common stock on the date of adoption and are entitled to automatic
grants of additional options to purchase 7,500 shares upon each anniversary of
the adoption date. All option grants are at exercise prices no less than the
"fair market value" of a share of Common Stock on the date of grant. All options
vest 50 percent on the second anniversary of the grant date and 25 percent on
each of the third and fourth anniversaries of the grant date, or 100 percent
upon the death of the director. At the Meeting, the shareholders will be asked
to approve the Restated Non-Employee Director Stock Option Plan (see Proposal
2).
MEETINGS OF THE BOARD OF DIRECTORS
During 1996, there were six meetings of the Board.
AUDIT COMMITTEE
The Audit Committee consists of two directors: Campbell B. Lanier, III
(Chairman) and J. Smith Lanier, II who was appointed to the Committee effective
August of 1996. The Audit Committee held two meetings in 1996. The Audit
Committee is responsible for recommending the appointment of independent
auditors, reviewing with the independent auditors the scope and results of the
audit engagement, establishing and monitoring the Company's financial policies
and control procedures, reviewing and approving related party transactions and
reviewing and monitoring the provision of non-audit services by the Company's
auditors.
COMPENSATION COMMITTEE
The Compensation Committee consists of three directors: David I. Fuente
(Chairman) (who was appointed to the Committee effective August 1996), Ronald J.
Green and Campbell B. Lanier, III. The committee held five meetings in 1996. The
committee is responsible for establishing salaries, bonuses, and other
compensation for the Company's officers and awarding stock options.
The Board has no nominating committee.
In 1996, all directors (except for Mr. Fuente) attended at least 75 percent
of the meetings of the Board and all committees of the Board of which they were
members.
2
<PAGE> 5
ELECTION OF DIRECTORS
(PROPOSAL 1)
The directors of the Company are elected annually to serve until the next
annual meeting of shareholders and until their respective successors are
elected. The authorized number of directors of the Company is presently fixed at
six. All the nominees are currently directors.
Each proxy executed and returned by a shareholder will be voted as
specified thereon by the shareholder. If no specification is made, such proxy
will be voted for the election of the nominees named below to constitute the
entire Board. In the event that any nominee withdraws or for any reason is not
able to serve as a director, the proxy will be voted for such other person as
may be designated by the Board as a substitute nominee, but in no event will the
proxy be voted for more than six nominees. The management of the Company has no
reason to believe that any nominee will not serve if elected.
The Company's By-Laws contain an advance notice procedure for the
nomination of candidates for election to the Board. Notice of proposed
shareholder nominations for election of directors must be given to the Secretary
of the Company not less than 14 days nor more than 50 days prior to the meeting
at which directors are to be elected, unless the notice of meeting is given less
than 21 days prior to the meeting, in which case the notice of nomination must
be submitted not later than the 7th day following the day on which the notice of
meeting was mailed to shareholders. The notice of nomination must contain
information about each proposed nominee, including age, address, principal
occupation, financial standing, plans or ideas for managing the affairs of the
Company, the number of shares of stock of the Company beneficially owned by such
nominee and such other information as would be required to be disclosed under
the Securities Exchange Act of 1934 (the "Exchange Act"), in connection with any
acquisition of shares by such nominee or with the solicitation of proxies by
such nominee for his election as a director. Information must also be disclosed
by and about the shareholder proposing to nominate that person. The chairman of
a shareholder meeting may refuse to acknowledge the nomination of any person not
made in compliance with the foregoing procedure.
The foregoing summary description of the By-Laws is not intended to be
complete and is qualified in its entirety by reference to the text of the
By-Laws.
INFORMATION CONCERNING DIRECTORS
The following information is provided, as of February 14, 1997, regarding
the nominees for election as directors:
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
- ---- --- --------------------------
<S> <C> <C>
James W. Krause............................ 52 Chairman of the Board, President and Chief
Executive Officer and Director
Sandra M. Buffa............................ 44 Senior Vice President, Finance, Treasurer
and Director
David I. Fuente............................ 51 Director
Ronald J. Green............................ 49 Director
Campbell B. Lanier, III.................... 46 Director
J. Smith Lanier, II........................ 69 Director
</TABLE>
Mr. Krause joined the Company in April 1994 as President and Chief
Executive Officer and a director. From 1980 until joining the Company, he was
President and General Manager of the automotive and international divisions of
Sherwin-Williams Company.
3
<PAGE> 6
A director since June 1993, Ms. Buffa served as Senior Vice President
Finance and Administration from June 1993 through May 1994, at which time she
was given her current title. From November 1992 to June 1993, Ms. Buffa was the
Chief Financial Officer of Applause Inc., a company which designs and is a
wholesale distributor to the retail gift market. From 1985 until November 1992,
she was employed by Seattle Holdings Corporation, where she served as Chief
Financial Officer. During 1992, she also served as president of PSS, Inc. (OTC).
A director since April 1992, Mr. Fuente has been Chairman of the Board and
Chief Executive Officer of Office Depot, Inc. since 1987.
A director since December 1990, Mr. Green has been a partner in the
accounting firm of Stephen M. Berman & Associates, Atlanta, Georgia, since 1980.
A director since October 1990, Mr. Campbell B. Lanier, III is Chairman of
the Board and Chief Executive Officer of ITC Holding Company, a
telecommunications services company located in West Point, Georgia. He is also
Chairman, Chief Executive Officer and director of Intercel, Inc. He also serves
as a director of each of Mindspring Enterprises, Inc. and K&G Men's Center, Inc.
A director since October 1990, Mr. J. Smith Lanier, II is Chairman and
Chief Executive Officer of J. Smith Lanier & Co., an insurance sales company. He
is also a director of Interface, Inc. Mr. Lanier is the uncle of Campbell B.
Lanier, III.
EXECUTIVE OFFICERS
The following table sets forth, as of February 14, 1997, certain
information regarding the executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
- ---- --- --------------------------
<S> <C> <C>
James W. Krause............................ 52 Chairman of the Board, President and Chief
Executive Officer
Michael J. Boden........................... 49 Vice President, Sales and Marketing
Sandra M. Buffa............................ 44 Senior Vice President, Finance and Treasurer
Mitchell Goodman........................... 43 Vice President, General Counsel and Secretary
D. Michael Lampman......................... 56 Vice President, Operations
Angus C. Morrison.......................... 40 Vice President, Corporate Controller and Assistant
Treasurer
Robert W. Stein............................ 41 Vice President, Human Resources
Patric L. Welch............................ 46 Vice President, Professional Services
</TABLE>
For a description of the business experience of Mr. Krause and Ms. Buffa,
see "Information Concerning Directors."
Mr. Boden joined the Company in June 1995 as Vice President, Sales and
Marketing. From 1992 until joining the Company, he served as Vice
President -- Store Operations of This End Up Furniture Company. From 1985
through 1991, he was employed by Zale Corporation as Vice President -- Store
Operations.
Mr. Goodman joined the Company as General Counsel and Secretary in
September 1992 and was named a Vice President in November 1993. He was Vice
President, General Counsel and Secretary of NuVision, Inc., an optical retailer,
from 1985 to April 1992 and was engaged in the private practice of law from that
time until commencing employment with the Company.
4
<PAGE> 7
Mr. Lampman joined the Company in October 1993 as Vice President, Retail
Operations. From 1985 until joining the Company, he was Vice President of
Optical, Shop Ko Stores, Inc.
Mr. Morrison joined the Company in February of 1995 as Vice President,
Corporate Controller. From 1993 until joining the Company, he was Controller and
Senior Financial Officer of the Soap Division of The Dial Corp. He was
Controller and Senior Financial Officer of the food division of the same company
from 1989 through 1992.
Mr. Stein joined the Company as Director of Human Resources in May 1992. In
January 1993, he was appointed Vice President, Human Resources. Previously, he
was Vice President Human Resources of NuVision, Inc. from 1984 until joining the
Company.
Mr. Welch joined the Company as Director Eastern Region in November 1994
and was appointed Vice President, Professional Services in February 1997. He was
District Manager of D.O.C. Optics Corp. from 1993 until joining the Company.
Previously, he was Regional Vice President of NuVision, Inc., where he was
employed from 1986 until 1993.
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The Company is not aware of any person who, on February 10, 1997, was the
beneficial owner of five percent (5%) or more of outstanding shares of Common
Stock, except as set forth below.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNERSHIP OF CLASS
-------------------- --------
<S> <C> <C>
Rayna C. Weiner............................................. 2,538,152(a) 12.3%
Edward G. Weiner............................................ 2,090,650(a)(b) 10.1%
WisdomTree Capital Management, Inc.......................... 1,413,170(c) 6.9%
</TABLE>
- ---------------
(a) Includes 159,948 shares owned by a trust of which Ms. Weiner is the trustee
and her daughter the beneficiary. Ms. Weiner's address is 712 West Paces
Ferry Road, Atlanta, Georgia. Ms. Weiner is the spouse of Mr. Weiner.
(b) Includes (i) 143,373 shares not directly owned by Mr. Weiner but with
respect to which he retains sole voting power pursuant to voting agreements
with terms generally through the year 2000; (ii) 159,948 shares that Mr.
Weiner owns but which he may be obligated to transfer to one individual,
while retaining sole voting power for eight years from the date of the
transfer; and (iii) 35,000 shares that Mr. Weiner owns but which he may be
obligated to transfer to a director of the Company and another individual.
Mr. Weiner's address is 600 Golden Harbor Drive, Boca Raton, Florida.
(c) Based on a Schedule 13D filed by the reporting person, whose address is 1633
Broadway, 38th Floor, New York, New York.
5
<PAGE> 8
The following table sets forth information, as of February 10, 1997,
concerning beneficial ownership by all directors and nominees, by each of the
executive officers named in the Summary Compensation Table below, and by all
directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNERSHIP OF CLASS
-------------------- --------
<S> <C> <C>
Campbell B. Lanier, III..................................... 897,780(1)(2) 4.4%
J. Smith Lanier, II......................................... 274,110(2)(3) 1.3%
James W. Krause............................................. 248,896(4) 1.2%
Ronald J. Green............................................. 109,849(2)(5) *
Sandra M. Buffa............................................. 105,000(6) *
David I. Fuente............................................. 92,375(2)(7) *
D. Michael Lampman.......................................... 45,750(8) *
Mitchell Goodman............................................ 42,546(9) *
Michael J. Boden............................................ 3,077 *
All directors and executive officers as a group (12
persons).................................................. 1,883,194 8.9%
</TABLE>
- ---------------
(1) Includes 69,948 shares owned by a corporation that is jointly controlled by
Mr. Lanier, 750 shares owned by his spouse and 750 shares held in trust for
one of his minor children.
(2) Includes 39,375 shares which this individual has the right to acquire under
the Company's Non-Employee Director Stock Option Plan.
(3) Includes 1,800 shares owned by Mr. Lanier's wife, as to which he disclaims
beneficial ownership.
(4) Includes 225,000 shares which this individual has the right to acquire under
the Company's Restated Stock Option and Incentive Award Plan.
(5) Includes 9,000 shares owned by Mr. Green's children.
(6) Includes 75,000 shares which this individual has the right to acquire under
the Company's Restated Stock Option and Incentive Award Plan.
(7) Includes 25,000 shares which Mr. Fuente has the right to acquire from Mr.
Weiner pursuant to a stock option agreement.
(8) Includes 33,750 shares which this individual has the right to acquire under
the Company's Restated Stock Option and Incentive Award Plan.
(9) Includes 39,818 shares which this individual has the right to acquire
pursuant to the Company's Restated Stock Option and Incentive Award Plan,
and 2,728 shares owned by Mr. Goodman's wife, as to which he disclaims
beneficial ownership.
* Less than 1%.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and holders of more than ten percent (10%) of Common Stock to
file with the Securities and Exchange Commission (the "Commission") initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. The Company believes that, during 1996,
its officers, directors and holders of more than ten percent (10%) of Common
Stock complied with all Section 16(a) filing requirements with the exception of
Mr. Weiner and Mrs. Weiner. In 1996, Mr. Weiner filed a Form 5 with the
Commission, disclosing one unreported gift transaction. Mrs. Weiner failed to
file a Form 3 relating to one transaction. In
6
<PAGE> 9
making these statements, the Company has relied upon the written representations
of its directors and officers and upon copies of reports furnished to the
Company.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received from the Company by the
Company's President and Chief Executive Officer, and the Company's four most
highly compensated officers other than the President and Chief Executive Officer
(all such individuals, collectively, the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------------ ---------------------
NAME AND OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS/SARS (#) COMPENSATION ($)
------------------ ---- ---------- --------- ---------------- --------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James W. Krause............... 1996 307,000 177,000 143,000(1) 50,000 20,000(2)
Chairman of the Board, 1995 299,000 -0- 135,000(3) 50,000 20,000(2)
President and Chief 1994 212,000(4) 106,000 57,000(5) 450,000
Executive Officer
Sandra M. Buffa............... 1996 192,000 104,000 264,000(6) 15,000
Senior Vice President, 1995 192,000 -0- 73,000(7) 15,000
Finance and Treasurer 1994 182,000 -0- 33,000(8) -0-
Michael J. Boden.............. 1996 178,000 97,000 15,000
Vice President, 1995 96,000(4) 9,600 47,000(9) 50,000
Sales and Marketing
D. Michael Lampman............ 1996 164,000 73,000 15,000
Vice President,............. 1995 160,000 -0- 72,000(10) 15,000
Operations 1994 151,000 13,600 19,000(8) 15,000
Mitchell Goodman.............. 1996 135,000 75,000 17,000(11) 15,000
Vice President, General 1995 126,000 -0- 17,000(11) 15,000
Counsel and Secretary 1994 111,000 10,000 13,228
</TABLE>
- ---------------
(1) $83,000 represents reimbursement of relocation expenses; $60,000 represents
tax reimbursement payments on the foregoing.
(2) The Company has executed a "split dollar" insurance agreement with Mr.
Krause. The annual premium (payable by the Company) is $20,000. The term
life portion of this premium is $2,500; the non-term life portion is
$17,500.
(3) $89,000 represents reimbursement of relocation expenses; $42,000 represents
tax reimbursement payments on the foregoing.
(4) Executive employed by Company only for a portion of this calendar year.
(5) $26,000 of this amount represents reimbursement of relocation expenses
incurred by Mr. Krause; $31,000 was for replacement of a country club
membership, which benefit had been provided by Mr. Krause's previous
employer.
(6) $162,000 represents reimbursement of relocation expenses; $102,000
represents tax reimbursement payments on the foregoing.
(7) $49,000 represents reimbursement of relocation expenses; $24,000 represents
tax reimbursement payments for the foregoing.
7
<PAGE> 10
(8) Reimbursement of duplicate housing expenses.
(9) $30,000 represents reimbursement of relocation expenses; $17,000 represents
tax reimbursement payments for the foregoing.
(10) $62,000 represents reimbursement of relocation expenses; $10,000 represents
tax reimbursement payments for the foregoing.
(11) Represents partial forgiveness of $50,000 loan made in 1992.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants to the named
executive officers by the Company in 1996. In accordance with rules of the
Commission, there are shown the hypothetical gains or "option spreads" that
would exist for the respective options. These gains are based on assumed rates
of annual compound stock price appreciation of 5% and 10% from the date the
options were granted over the full option term.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION ----------------------
NAME GRANTED YEAR(1) ($/SHARE) DATE 5%($)(2) 10%($)(2)
---- ---------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
James W. Krause................ 50,000(3) 15.4% 3.125 2/27/06 98,250 249,250
Michael J. Boden............... 15,000(3) 4.6% 3.125 2/27/06 29,475 74,775
Sandra M. Buffa................ 15,000(3) 4.6% 3.125 2/27/06 29,475 74,775
Mitchell Goodman............... 15,000(3) 4.6% 3.125 2/27/06 29,475 74,775
D. Michael Lampman............. 15,000(3) 4.6% 3.125 2/27/06 29,475 74,775
</TABLE>
- ---------------
(1) The Company granted options covering 324,305 shares to employees in 1996.
(2) These amounts represent assumed rates of appreciation only. Actual gains, if
any, on stock option exercises and holdings of Common Stock are dependent
on the future performance of Common Stock and overall stock market
conditions. There can be no assurance that the amounts reflected in this
table will be achieved.
(3) Grants under the Company's Restated Stock Option and Incentive Award Plan.
Options vest 50% on second anniversary of grant date and 25% on each of the
third and fourth anniversary, subject to continued employment. Expiration
date is 10th anniversary of grant date.
8
<PAGE> 11
AGGREGATED FISCAL YEAR END OPTION VALUES
The following table provides information, as of December 28, 1996,
regarding the number and value of options held by the named executive officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END(#) AT YEAR-END($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
James W. Krause.................................... 225,000 -0-
325,000(1) 50,000
Michael J. Boden................................... -0- -0-
65,000(1) 15,000
Sandra M. Buffa.................................... 75,000 -0-
55,000(1) 15,000
Mitchell Goodman................................... 39,818 -0-
40,182(1) 15,000
D. Michael Lampman................................. 33,750 -0-
46,250(1) 15,000
</TABLE>
- ---------------
(1) Shares represented were not exercisable as of December 28, 1996, and future
exercisability is subject to the executive's remaining employed by the
Company for up to four years from grant date of options.
EMPLOYMENT AGREEMENTS
In 1996, Edward G. Weiner, the Company's then Vice Chairman, was employed
at an annual salary of $165,000 pursuant to an employment agreement with the
Company with a term ending March 1, 2000. In connection with Mr. Weiner's
resignation from the Board in February 1997, the employment agreement was
terminated, and the Company (in exchange for a non-competition agreement) paid
Mr. Weiner an amount equal to a discounted present value of the payments which
would have been made under the employment agreement.
Ms. Buffa is employed pursuant to an employment agreement which provides
for an annual salary and certain other benefits. The agreement further provides
that the Company may at any time terminate the executive's employment upon six
months notice or upon no notice if such termination is for "cause" (as defined).
Pursuant to the employment agreement, Ms. Buffa may not, either during the term
of the agreement or during the six months following employment with the Company,
be associated with any optical retailing business located in any state in which
the Company does business.
Mr. Lampman is employed pursuant to an employment agreement which, in
addition to providing for salary and other benefits, provides that the Company
may at any time terminate his employment upon six months notice, unless such
termination is for cause.
There are agreements between the Company and the named executive officers
which provide severance benefits in the event of termination of employment under
certain circumstances following a change in control of the Company (as defined).
The circumstances are termination by the Company (other than because of death or
disability commencing prior to a threatened change in control (as defined), or
for cause (as defined)), or by an officer as the result of a voluntary
termination (as defined). Following any such
9
<PAGE> 12
termination, in addition to compensation and benefits already earned, the
officer will be entitled to receive a lump sum severance payment equal to up to
three times the officer's annual rate of base salary.
Cause for termination by the Company is the: (i) any act that constitutes,
on the part of the officer, (a) fraud, dishonesty, gross negligence, or willful
misconduct and (b) that directly results in material injury to the Company, or
(ii) the officer's material breach of the agreement, or (iii) the officer's
conviction of a felony or crime involving moral turpitude.
Circumstances which would entitle the officer to terminate as a result of
voluntary termination following a change in control include, among other things:
(i) the assignment to the officer of any duties inconsistent with the officer's
title and status in effect prior to the change in control or threatened change
in control; (ii) a reduction by the Company of the officer's base salary; (iii)
the Company's requiring the officer to be based anywhere other than the
Company's principal executive offices; (iv) the failure by the Company, without
the officer's consent, to pay to the officer any portion of the officer's then
current compensation; (v) the failure by the Company to continue in effect any
material compensation plan in which the officer participates immediately prior
to the change in control or threatened change in control; or (vi) the failure by
the Company to continue to provide the officer with benefits substantially
similar to those enjoyed by the officer under any of the Company's life
insurance, medical, or other plans. The term of each agreement is for a rolling
three years unless the Company gives notice that it does not wish to extend such
term, in which case the term of the agreement would expire three years from the
date of the notice.
REPORT OF THE COMPENSATION COMMITTEE
A. GENERAL
Compensation of the Company's senior management is reviewed by the
Compensation Committee (the "Committee"), which also administers the stock
option program of the Company, and grants stock options thereunder. The
compensation philosophy of the Company is based on the premise that the
Company's achievements result from the coordinated efforts of its employees. The
Company strives to achieve those objectives through teamwork that is focused on
meeting the expectations of customers and shareholders.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance, and to enable the Company to attract,
retain and reward executive officers who contribute to the long-term success of
the Company. The Company's compensation program for executive officers,
including the chief executive officer, is based on the same four principles
applicable to compensation decisions for all employees of the Company:
- The Company pays competitively.
- The Company pays for performance.
- The Company strives for fairness in the administration of pay.
- The Company believes that employees should understand the performance and
pay administration process.
10
<PAGE> 13
Stock Option Program
The purpose of this program is to provide additional incentives to
employees to work to maximize shareholder value. The option program also
utilizes vesting periods to encourage key employees to continue in the employ of
the Company. The Company grants stock options annually to key field and
administrative employees, including executive officers.
B. 1996 COMPENSATION DECISIONS
1. 1996 CASH COMPENSATION
a. Salary Compensation
Salary compensation for the other named executive officers in 1996 was
similar to salary compensation for 1995. Raises were approved on the basis of a
merit grid system (including a report of outside consultants showing salaries
for comparable positions at other companies) applied to all employees of the
Company. Evaluation of performance was subjective and no fixed, relative weights
were assigned to the factors considered.
b. Bonus Compensation
The Company has in place an incentive compensation plan pursuant to which
each executive officer (including the chief executive officer) is entitled to
receive a bonus if the Company meets certain financial goals (based on defined
improvement in earnings per share) and the executive meets defined individual
performance goals. Bonuses were awarded for 1996 on the basis (and to the
extent) of the achievement of these goals.
2. OPTION GRANTS
The Committee has approved a plan whereby its executive officers will each
receive annual grants of stock options. Annual grants were made in February of
1996: Mr. Krause received a grant covering 50,000 shares and each other
executive officer received a grant covering 15,000 shares.
3. INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation in excess of $1,000,000 paid to certain executives of public
companies. Because the 1996 compensation levels of the Company's executive
officers were well below the $1,000,000 threshold the Committee did not, in
1996, adopt any policies or programs with respect to this section of the
Internal Revenue Code.
COMPENSATION COMMITTEE
David I. Fuente (Chairman)
Ronald J. Green
Campbell B. Lanier, III
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<PAGE> 14
PERFORMANCE GRAPH
NOTE: The stock price performance shown on the graph below is not
necessarily indicative of future price performance. The graph takes into account
the 3 for 2 stock split in Common Stock effected in September 1992.
Comparison of Cumulative Total Return
(since May 29, 1992 through December 28, 1996)
among the Company, the NASDAQ Composite
Index, and the NASDAQ Retail Group Index
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
Apr-92 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
National Vision
Associates, Ltd. $100 $300 $84 $43 $35 $53
- ---------------------------------------------------------------------------------------------------------------------------------
NASDAQ Composite
Index $100 $118 $135 $132 $187 $230
- ---------------------------------------------------------------------------------------------------------------------------------
NASDAQ Retail
Group $100 $105 $110 $101 $111 $132
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Returns for NASDAQ Composite Index and NASDAQ Retail Group commence April 30,
1992. The return for National Vision Associates, Ltd. is based on the
Company's adjusted initial offering price of $8.67 on May 19, 1992.
12
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
In 1996, David I. Fuente, Ronald J. Green and Campbell B. Lanier, III
served as members of the Compensation Committee.
CERTAIN TRANSACTIONS
In 1991, approximately $1,700,000 of certain amounts payable by the Company
were transferred, pursuant to a sale-leaseback arrangement, to a partnership
partially owned by Campbell B. Lanier, III, a director of the Company. In
connection with such transfer, the principal amount due was discounted to
approximately $1,625,000 resulting in an effective interest rate of 14%. The
Company made payments of approximately $341,000 in 1996 to such limited
partnership. As of September, 1996, no further payments were owed by the Company
to the partnership. Management of the Company believes such purchases and lease
terms (which have been ratified by the Audit Committee) were comparable to those
that could have been obtained from unaffiliated companies.
The Company paid insurance premiums of approximately $844,000 in 1996 for
insurance policies purchased through an agency in which J. Smith Lanier, II, a
director of the Company, has a substantial ownership interest. The Audit
Committee (which has ratified the purchase of insurance by the Company from this
insurance agency) and management of the Company believe that these premiums are
comparable to those which could have been obtained from unaffiliated companies.
APPROVAL OF THE COMPANY'S
RESTATED NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(PROPOSAL 2)
In 1993, the shareholders of the Company approved the Non-Employee Director
Stock Option Plan (the "Directors Plan") pursuant to which stock options would
be granted to non-employee directors. A total of up to 270,000 shares of Common
Stock may be granted under the Directors Plan. By its terms, the Directors Plan
will terminate in July 1997.
The purpose of the Directors Plan is to promote the interests of the
Company and its shareholders by attracting and retaining highly qualified
independent directors through an opportunity to invest in the Company and
participate in its further success.
At its meeting on February 12, 1997, the Board, in order to ensure that the
Company has appropriate long-term incentives for its non-employee directors,
approved (subject to approval by the shareholders at the Meeting) an amendment
and restatement of the Directors Plan (the "Restated Plan"), and directed that
the Restated Plan be submitted to shareholders for their approval at the
Meeting. The Restated Plan, among other things, increases the number of shares
authorized from the 270,000 shares of Common Stock currently provided for under
the Directors Plan to 500,000 shares of Common Stock. The Restated Plan also
extends the term of the Directors Plan for ten years. If approved by the
shareholders, the Restated Plan will be effective as of the date of the Meeting.
13
<PAGE> 16
INCREASE IN AUTHORIZED SHARES
The Directors Plan currently authorizes the issuance of up to 270,000
shares of Common Stock. The following table shows as of December 31, 1996 the
number of shares authorized for issuance under the Directors Plan, the number of
options exercised, the number of shares currently subject to outstanding
options, and the number of shares available for the grant of future options:
<TABLE>
<CAPTION>
NUMBER OF SUBJECT TO AVAILABLE FOR
OPTIONS OUTSTANDING GRANT OF
AUTHORIZED EXERCISED OPTIONS FUTURE OPTIONS
- ---------- --------- ----------- --------------
<S> <C> <C> <C>
270,000................................................ -0- 240,000 30,000
</TABLE>
Thus, as of December 31, 1996, 30,000 shares remain unused under the
Directors Plan and will be available for use under the Restated Plan. (Of the
240,000 shares subject to outstanding options, 150,000 option shares are at
exercise prices of $13.75 and higher.) In addition to the 30,000 shares, it is
proposed that 230,000 new shares be made available under the Restated Plan,
making an aggregate of 260,000 shares available for the grant of future options.
DESCRIPTION OF PLAN
The following is a summary of the material provisions of the Restated Plan
and is qualified in its entirety by reference to the complete text of the
Restated Plan, copies of which will be furnished to any shareholder upon written
request made to the Secretary of the Company.
Under the Restated Plan, full payment of the option price must be made when
an option is exercised. The purchase price may be paid in cash or in such other
form as the Company may approve, including shares of Common Stock valued at
their fair market value on the date of exercise. The proceeds received by the
Company from the sale of shares under the Restated Plan will be used for general
corporate purposes.
The Restated Plan provides for automatic annual grants of options covering
7,500 shares of Common Stock to each non-employee director following the annual
meeting of shareholders each year, commencing with the Meeting. All options vest
50 percent on the second anniversary of the grant date and 25 percent on each of
the third and fourth anniversaries of the grant date, or 100 percent upon the
death of the director. All option grants are at exercise prices no less than the
"fair market value" of a share of Common Stock on the date of grant and are
exercisable for a ten-year period. (Under the current Directors Plan, options
are exercisable for a five-year period.) There are currently four non-employee
directors.
The maximum number of shares of Common Stock for which options may be
granted under the Restated Plan is 500,000, subject to certain anti-dilution
adjustments which may be applied in the discretion of the Compensation
Committee. The Restated Plan is administered by the Compensation Committee.
Unless otherwise provided in the option agreement, options are not transferable
other than by will or applicable laws of descent and distribution.
On February 12, 1997, the closing price per share of Common Stock on the
NASDAQ National Market System was $4.813.
AMENDMENT AND TERMINATION
The Restated Plan may be amended, modified or terminated by the Board,
provided that no amendment may (a) materially modify the eligibility
requirements thereunder, (b) increase the total number of shares allowed to be
issued thereunder, (c) extend the term thereof, (d) change the option exercise
price, or
14
<PAGE> 17
(e) change the maximum period during which options may be exercised. Unless
earlier terminated by the Board or the shareholders, the Restated Plan will
terminate on the tenth anniversary of the date of the Meeting.
CHANGES IN CONTROL
Upon the occurrence of certain change in control events, all options
outstanding under the Restated Plan will become immediately exercisable.
FEDERAL TAX CONSEQUENCES
The following summary of federal income tax consequences with respect to
the Restated Plan is not comprehensive and is based upon laws and regulations
currently in effect. Such laws and regulations are subject to change.
The Company does not realize income upon the grant of options, but is
entitled to take an income tax deduction equal to the amount an optionee
includes in income (if any) when such option is exercised. Optionees realize no
taxable income when granted an option. However, upon exercise of any such
option, optionees must include in income the difference between the option price
and the fair market value of the shares on the date of exercise. All such income
is taxed as ordinary income in the year of exercise. Any gain realized by the
optionee upon a subsequent sale of the shares of Common Stock obtained by the
exercise of an option will be taxed as a capital gain.
APPROVAL
The current non-employee directors have an interest in the approval of the
Restated Plan since they expect, subject to shareholder approval, to receive
grants of options thereunder.
The Board believes that the Restated Plan will be an important component of
the Company's compensation package because it secures for the Company and its
shareholders the advantages of the incentive inherent in stock ownership on the
part of its independent directors. The Company believes that stock ownership
incentives give such individuals a greater concern for the welfare of the
Company and its future growth and encourage them to continue their association
with the Company. Accordingly, the Board recommends that the shareholders vote
in favor of the Restated Plan.
Voting Requirements. Approval of the Restated Plan will require the
affirmative vote of a majority of the shares of Common Stock represented in
person or by proxy and entitled to vote at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE RESTATED
PLAN, AND THE ENCLOSED PROXY WILL BE VOTED IN THAT MANNER UNLESS THE SHAREHOLDER
EXECUTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY OR ABSTAINS FROM VOTING
ON THIS PROPOSAL.
INFORMATION CONCERNING THE COMPANY'S INDEPENDENT ACCOUNTANTS
The Board has selected the firm of Arthur Andersen LLP, independent public
accountants, to audit the accounts of the Company and its subsidiaries for the
year 1997. Arthur Andersen LLP has served the Company in this capacity since
1990. Representatives of Arthur Andersen LLP are expected to be present at
15
<PAGE> 18
the Meeting and will be afforded an opportunity to make a statement if they so
desire. Such representatives will be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
All proposals of shareholders must be submitted to the Secretary of the
Company no later than November 7, 1997, in order to be considered for inclusion
in the Company's 1998 proxy materials. The Company's By-Laws require notice to
the Board or the President, as the case may be, in advance of any regular
shareholders' meeting, of any shareholder proposals. The By-Laws further require
that in connection with such proposals the shareholders provide certain
information to the Board or the President, as the case may be. The foregoing
summary description of the By-Laws is not intended to be complete and is
qualified in its entirety by reference to the text of the By-Laws.
OTHER MATTERS
The Board is not aware of any matters to come before the Meeting other than
the election of the directors and approval of the Restated Plan. If any other
matter should come before the Meeting, then the persons named in the enclosed
form of proxy will have discretionary authority to vote all proxies with respect
thereto in accordance with their judgment.
VOTING OF PROXIES
On matters coming before the Meeting as to which a choice has been
specified by the shareholders on the proxies, the shares will be voted
accordingly. If no choice is so specified, the shares will be voted FOR the
election of management's nominees for directors and FOR the Restated Plan.
By order of the Board of Directors,
MITCHELL GOODMAN
Secretary
Dated: March 7, 1997
16
<PAGE> 19
[NATIONAL VISION ASSOCIATES, LTD. LOGO]
<PAGE> 20
APPENDIX
NATIONAL VISION ASSOCIATES, LTD.
ANNUAL SHAREHOLDERS MEETING
APRIL 29, 1997
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned does hereby appoint JAMES W. KRAUSE and MITCHELL
GOODMAN and each of them proxies of the undersigned with full power of
substitution in each of them to vote at the annual meeting of shareholders of
the Company to be held on April 29, 1997 at 11:00 A.M., and at any and all
adjournments thereof, with respect to all shares which the undersigned would be
entitled to vote, and with all powers which the undersigned would possess if
personally present. This proxy revokes all prior proxies given by the
undersigned. Without limiting the generality of the foregoing, said proxies
are authorized to vote upon the following matters.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED ON
THE REVERSE SIDE HEREOF AND FOR PROPOSAL 2.
Please sign exactly as your name or names appear on the reverse side. For more
than one owner as shown, each should sign. When signing in a fiduciary
capacity, please give full title. If this proxy is submitted by a corporation,
it should be executed in the full corporate name by a duly authorized officer;
if a partnership, please sign in partnership name by authorized person.
<PAGE> 21
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
NATIONAL VISION For hold Except
ASSOCIATES, LTD. 1. Election of Directors: / / / / / /
Sandra M. Buffa James W. Krause
David I. Fuente Campbell B. Lanier, III
Ronald J. Green J. Smith Lanier, II
RECORD DATE SHARES: NOTE: If you do not wish your shares voted "FOR" a
particular nominee, mark the "FOR ALL EXCEPT" box and
strike a line through that nominee's name. Your shares
shall be voted for the remaining nominees.
With- For All
For hold Except
2. Approval of the Restated / / / / / /
Non-Employee Director
Stock Option Plan.
In their discretion, the proxies are authorized to
vote upon any other business that may properly come
before the meeting or at any adjournment(s) thereof.
Please be sure to sign and date this Proxy. Date ______________________
Shareholder sign here __________________ Co-owner sign here ______________
DETACH CARD DETACH CARD
NATIONAL VISION ASSOCIATES, LTD.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy.
There are a number of issues related to the management and operation of
your Company that require your immediate attention and approval. These
are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
National Vision Associates, Ltd.
