<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 28, 1997 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 30045
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 June 28, 1997 was 20,709,160.
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
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PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
December 28, 1996 and June 28, 1997 3
Condensed Consolidated Statements of Operations -
Three Months Ended June 29, 1996 and June 28, 1997,
and Six Months Ended June 29, 1996 and
June 28, 1997 4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 29, 1996 and June 28, 1997 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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<PAGE>
PART I
FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
NATIONAL VISION ASSOCIATES, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 28, 1996 and June 28, 1997
(000's except share information)
<TABLE>
<CAPTION>
December 28, June 28,
1996 1997
------------ -------
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,110 $ 1,669
Accounts receivable (net of allowance: 1996-$353; 1997-$402) 4,164 5,425
Inventories 23,970 23,046
Store preopening costs (net of accumulated amortization: 1996-$605; 1997-$585) 240 260
Other current assets 944 692
------- -------
Total current assets 30,428 31,092
------- -------
PROPERTY AND EQUIPMENT:
Equipment 38,573 39,865
Furniture and fixtures 17,136 18,562
Leasehold improvements 13,178 13,610
Construction in progress 1,669 1,502
------- -------
70,556 73,539
Less accumulated depreciation (27,206) (31,695)
------- -------
Net property and equipment 43,350 41,844
------- -------
ORGANIZATION COSTS (net of accumulated amortization: 1996-$503; 1997-$435) 108 42
------- -------
OTHER ASSETS AND DEFERRED COSTS (net of accumulated amortization:
1996-$226; 1997-$282) 378 913
ASSIGNMENT AGREEMENT AND INTANGIBLE ASSETS (net of accumulated
amortization: 1997-$353) 4,252
------- -------
$74,264 $78,143
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 8,283 $ 9,290
Accrued expenses and other current liabilities 8,343 9,684
Current portion - long-term debt 185
------- -------
Total current liabilities 16,626 19,159
------- -------
LONG-TERM DEBT 26,500 20,000
------- -------
LONG-TERM DEBT RELATED TO ASSIGNMENT AGREEMENT AND INTANGIBLE ASSETS 3,915
DEFERRED INCOME TAX LIABILITIES 1,232 1,871
------- -------
<PAGE>
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,
20,644,752 and 20,709,160 shares issued and outstanding as
of December 28, 1996 and June 28, 1997, respectively 206 207
Additional paid-in capital 42,166 42,184
Retained deficit (8,393) (5,120)
Cumulative foreign currency exchange rate translation (4,073) (4,073)
------- -------
Total shareholders' equity 29,906 33,198
------- -------
$74,264 $78,143
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
Page 3 of 14
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<PAGE>
<TABLE>
<CAPTION>
NATIONAL VISION ASSOCIATES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000's except per share information)
(Unaudited)
Three Months Ended Six Months Ended
------------------------- -------------------------
June 29, June 28, June 29, June 28,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $40,525 $44,512 $80,658 $88,874
COST OF GOODS SOLD 19,133 20,654 37,824 40,797
------- ------- ------- -------
GROSS PROFIT 21,392 23,858 42,834 48,077
SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES 19,202 20,793 38,620 41,764
------- ------- ------- -------
OPERATING INCOME 2,190 3,065 4,214 6,313
OTHER EXPENSE, NET 507 391 1,164 879
------- ------- ------- -------
INCOME BEFORE PROVISION FOR
INCOME TAXES 1,683 2,674 3,050 5,434
PROVISION FOR INCOME TAXES 431 1,054 805 2,161
------- ------- ------- -------
NET INCOME $ 1,252 $ 1,620 $ 2,245 $ 3,273
======= ======= ======= =======
NET INCOME PER COMMON SHARE $ 0.06 $ 0.08 $ 0.11 $ 0.16
======= ======= ======= =======
</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
------------------------
June 29, June 28,
1996 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,245 $ 3,273
------- -------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,658 5,197
Provision for deferred income tax expense 650 639
Changes in assets and liabilities:
Receivables (1,340) (1,261)
Inventories (2,491) 924
Store preopening costs (115) (280)
Other current assets (692) 253
Accounts payable, accrued expenses and other current liabilities 1,310 2,348
------- -------
Total adjustments 1,980 7,820
------- -------
Net cash provided by operating activities 4,225 11,093
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,592) (2,985)
Organization costs (23) 27
Proceeds from sale of French operations 3,400
Change in other assets (113) (590)
Assignment Agreement and intangible assets (4,605)
------- -------
Net cash provided by (used in) investing activities 1,672 (8,153)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayment on bank line of credit (6,000) (6,500)
Long-term debt related to Assignment Agreement and intangible assets 4,100
Net proceeds from issuance of common stock 3 19
Net repayment on long-term debt and capital leases (275)
------- -------
Net cash provided by (used in) financing activities (6,272) (2,381)
------- -------
Effect of foreign currency exchange rate changes 158
------- -------
NET INCREASE (DECREASE) IN CASH (217) 559
CASH AND CASH EQUIVALENTS, beginning of period 1,307 1,110
------- -------
CASH AND CASH EQUIVALENTS, end of period $ 1,090 $ 1,669
======= =======
</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 28, 1997
(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 January 3, 1998. Certain amounts in the June 29, 1996 and
December 28, 1996 condensed consolidated financial statements have been
reclassified to conform to the June 28, 1997 presentation.
(2) RELATED-PARTY TRANSACTIONS
During the three months ended June 29, 1996, the Company made lease
payments of approximately $114,000 to a lease finance company which is
owned by a shareholder/director of the Company. The Company made payments
of approximately $26,000 and $0 during the three months ended June 29,
1996 and June 28, 1997, respectively, for insurance purchased through an
agency in which a director of the Company has a substantial ownership
interest. During the three months ended June 29, 1996, the Company made
payments of approximately $182,000 for store fixtures to a company which
had made certain installment payments to the spouse of the Company's Vice
Chairman, pursuant to an agreement entered into in 1992.
(3) ASSIGNMENT AGREEMENT AND INTANGIBLE ASSETS
In January 1997, the Company completed various transactions related to
its relationship with each of Eyecare Leasing, Inc. ("ELI"), which had
recruited optometrists for the Company pursuant to a consulting agreement,
and Stewart-Phillips, Inc. ("SPI"), which had recruited optometrists
practicing adjacent to the Company's vision centers in California. The
transactions involved the termination of such consulting agreement and the
transfer of certain responsibilities to the Company. Aggregate payments
received by ELI and SPI under the arrangement in 1996 were $1.4 million.
The aggregate cost of the transactions was $4.6 million, which has been
capitalized as an intangible asset and will be amortized over the remaining
life of the vision center leases. The Company made a lump sum payment of
$500,000 at closing and entered into promissory obligations for the balance,
payable over a 12-year period at 6.4% interest.
Page 6 of 14
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(4) PROVISION FOR INCOME TAXES
The effective income tax rate on consolidated pre-tax income in the
second quarter of 1997 is 40%, which represents a tax provision of 39% on
domestic earnings. Due to the Company's current tax net operating loss
carryforward position, current year earnings will not be subject to regular
Federal Income Tax. However, the Company will be subject to Federal
Alternative Minimum Tax and state income tax, which will result in the
Company making cash payments approximating 27% of consolidated pre-tax
earnings.
(5) 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
----------------------- ------------------------
June 29, June 28, June 29, June 28,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding 20,723 20,773 20,682 20,776
====== ====== ====== ======
</TABLE>
SFAS Statement No. 128 "Earnings Per Share" is effective for financial
statements for both interim and annual periods ending after December 15,
1997. Management anticipates that the statement, which revises the
calculation of earnings per share, will not have a material effect on the
computation of per share earnings.
(6) FIXED INTEREST RATE HEDGE
The Company uses a fixed interest rate swap agreement to reduce its
exposure to interest rate fluctuations. Under existing accounting standards,
this activity is accounted for as a hedging activity.
The intent of this activity is to convert the variable interest rate
debt based on LIBOR to fixed rate debt, thereby eliminating the financial
risk of unexpected interest rate increases which drive up the variable
interest rate and increase the Company's interest expense.
The Company accounts for the swap by recording the effect of the swap
into the Company's accounts. The swap is settled every 90 days.
Page 7 of 14<PAGE>
<PAGE>
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 28, 1997, the Company operated
357 vision centers, versus 328 vision centers at June 29, 1996.
Three Months Ended June 28, 1997 (the "Current Period") Compared
to Three Months Ended June 29, 1996 (the "Prior Period")
CONSOLIDATED RESULTS
NET SALES. Net sales during the Current Period increased to $44.5
million from $40.5 million for the Prior Period due to a 5.5% increase
in comparable domestic store sales as well as to the increase in the number
of operating domestic vision centers from 312 as of June 29, 1996 to 333 as
of June 28, 1997. Average weekly net sales per domestic vision center
increased from $9,900 during the Prior Period to $10,100 during the Current
Period. Average weekly net sales for vision centers open less than one
year was lower than the average for vision centers opened less than one
year in the Prior Period.
Continued success of "life style" selling programs, improved merchandising
and product presentation, as well as continued focus on customer service,
contributed to the sales improvement. In addition, sales under managed
care programs increased from the Prior Period.
Net sales from international operations increased from $870,000 in the
three-month period ending May 31, 1996 to $1 million in the comparable period
ending May 31, 1997. The increase was due primarily to new store openings.
GROSS PROFIT. For the Current Period, gross profit increased
to $23.9 million from $21.4 million in the Prior Period. This
increase was primarily due to the increase in net sales described
above. Gross profit percentage increased from 52.8% in the Prior Period
to 53.6% in the Current Period. Gross margin percentage was positively
affected by increased revenue from independent optometrists as a result
of transactions which closed in January 1997. (See Note 3 to
consolidated financial statements.)
Page 8 of 14<PAGE>
<PAGE>
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES ("SG&A expense").
SG&A expense (which includes both store operating expenses and
home office overhead) increased to $20.8 million in the Current
Period from $19.2 million for the Prior Period, reflecting
operating expenses of the additional vision centers. As a
percentage of net sales, SG&A expense was 46.7% in the Current
Period, compared to 47.4% for the Prior Period. The decrease
was due primarily to improved efficiencies at store level partially
offset by increases in administrative expenses related to responsibilities
assumed upon the termination of the optometric consulting agreement.
(See Note 3 to consolidated financial statements.)
OPERATING INCOME. Operating income for the Current Period
increased by 40% to $3.1 million from $2.2 million in the Prior
Period. The Company's international operations (24 vision
centers) generated an operating profit of $7,000 in the three months
ended May 31, 1997, as opposed to an operating loss of $20,000
in the comparable period a year ago. Such operating results do not
include any allocation of corporate overhead, interest or taxes.
OTHER EXPENSE. The decrease in other expense to $391,000,
compared to $507,000 in the Prior Period, is due to reduced
interest expense, resulting primarily from the reduction of
outstanding borrowings under the Company's credit facility.
PROVISION FOR INCOME TAXES. The effective income tax rate on
consolidated pre-tax income in the Current Period is 40%, which represents
a tax provision of 39% on domestic earnings. Due to the Company's current
tax net operating loss carryforward position, current year earnings will
not be subject to regular Federal Income Tax. However, the Company will
be subject to Federal Alternative Minimum Tax and state income tax, which
will result in the Company making cash payments approximating 27% of
consolidated pre-tax earnings.
NET INCOME. Net income was $1.6 million, or $0.08 per share, as
compared to net income of $1.3 million, or $0.06 per share, in the
Prior Period.
Page 9 of 14<PAGE>
<PAGE>
Six Months Ended June 28, 1997 (the "Current Period") Compared to
Six Months Ended June 29, 1996 (the "Prior Period")
CONSOLIDATED RESULTS
NET SALES. Net sales during the Current Period increased to
$88.9 million from $80.7 million for the Prior Period. Average
weekly net sales per vision center increased from $9,400 during
the Prior Period to $9,800 during the Current Period. Comparable store
sales for domestic vision centers increased 6.0% in the Current Period
versus the Prior Period. Management believes that new merchandising
programs, coupled with improved product presentation and customer
service, contributed to this increase.
Net sales from international operations decreased from
$2.1 million in the six-month period ended May 31, 1996 to $1.9
million in the comparable period ended May 31, 1997. The decrease was
due primarily to the sale and closure in 1996 of certain vision centers,
offset in part by the addition of eight new stores in the Mexico
operation during the second half of 1996 and during 1997.
GROSS PROFIT. For the Current Period, gross profit increased
to $48.1 million from $42.8 million in the Prior Period. This
increase was primarily due to the increased net sales described
above. Gross profit as a percentage of sales increased from
53.1% in the Prior Period to 54.1% in the Current Period. Gross
margin percentage was positively affected by increased revenue from
independent optometrists as a result of transactions which closed
in January 1997. (See Note 3 to consolidated financial statements.)
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES ("SG&A expense").
SG&A expense (which includes both store operating expenses and
home office overhead) increased to $41.8 million in the Current
Period from $38.6 million for the Prior Period, reflecting
operating expenses of the additional vision centers. As a
percentage of net sales, SG&A expense was 47.0% in the Current
Period, compared to 47.9% for the Prior Period. The percentage
decrease was due primarily to improved efficiencies at store level
partially offset by increases in administrative expenses related to
responsibilities assumed upon the termination of the optometric
consulting agreement. (See Note 3 to consolidated financial
statements.)
OPERATING INCOME. Operating income for the Current Period
increased to $6.3 million, a 50% increase over $4.2 million in the
Prior Period. International operations generated an operating profit
(which excludes allocated corporate overhead, interest, and taxes)
of $32,000 for the six months ended May 31, 1997 as opposed to
an operating loss of $360,000 in the comparable period a year ago.
OTHER EXPENSE. The decrease in other expense to $879,000, compared
to $1.2 million in the Prior Period, is due to lower interest expense.
The decrease in interest expense results primarily from reduced
borrowings under the Company's credit facility.
Page 10 of 14
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<PAGE>
PROVISION FOR INCOME TAXES. The effective income tax rate on
consolidated pre-tax income in the Current Period is 40%, which represents
a tax provision of 39% on domestic earnings. Due to the Company's current
tax net operating loss carryforward position, current year earnings will
not be subject to regular Federal Income Tax. However, the Company will
be subject to Federal Alternative Minimum Tax and state income tax, which
will result in the Company making cash payments approximating 27% of
consolidated pre-tax earnings.
NET INCOME. Net income was $3.3 million, or $0.16 per share,
as compared to net income of $2.2 million, or $0.11 per share, in the
Prior Period.
LIQUIDITY AND CAPITAL RESOURCES
As of June 28, 1997, the Company anticipates opening 44 domestic
vision centers during the last two quarters of 1997. Average
costs to open domestic vision centers have approximated $145,000
for fixed assets, $35,000 for inventory, and $22,000 for
preopening expenses. The Company currently plans to open three
more vision centers in Mexico in 1997. Substantially all of
the initial investment required for the new vision centers in
Mexico, including inventory, equipment and fixtures, will be provided
from current operations as well as from vision centers previously closed.
In the opinion of management, internally generated funds, as well as
funds available under the Company's credit facility, 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 1997 and 1998. At June 28, 1997, the Company had borrowed $20 million
under its $45 million credit facility versus outstanding borrowings of
$32 million as of June 29, 1996. Given the number of new store openings
anticipated in the second half of the year, management does not foresee
a significant reduction in debt for the remainder of 1997.
As of July 1997, the Company entered into a successor credit facility.
The terms of the new credit facility are substantially the same as the
Company's previous credit facility. Among various changes, the new facility
provides for a maturity date of July 15, 1999, the elimination of restrictions
on the Company's investment in non Wal-Mart operations, as well as amendments
to certain financial covenants.
NEW FINANCIAL ACCOUNTING STATEMENTS
In July, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income", and SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information." These statements address the reporting and
display of changes in equity that result from transactions and other
economic events, excluding transactions with owners, and the reporting of
segment information. Management has not evaluated the impact of these
statements on the financial statements.
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 1997 Annual Meeting of Shareholders (held on April 29,
1997), the shareholders voted upon and approved management's
nominees for directors and the Company's Restated Non-Employee
Director Stock Option 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>
David I. Fuente 15,369,061 259,326
Ronald J. Green 15,594,556 33,831
Campbell B. Lanier, III 15,589,349 39,038
J. Smith Lanier, II 15,591,749 36,638
Sandra M. Buffa 15,592,549 35,838
James W. Krause 15,377,360 33,713
Restated Plan 15,228,575 292,555 107,257
</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*
Form of Common Stock Certificate 4.1**
Amended and Restated Articles of Incorporation of the Company 4.1***
Restated Non-Employee Director Stock Option Plan 10.52****
Statement Regarding Computation of Per Share Earnings 11****
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.
**Incorporated by reference to the Company's Registration Statement on
Form 8-A filed with the Commission on January 17, 1997.
***Incorporated by reference to the Company's Form 8-K filed with the
Commission on January 17, 1997.
****Filed with this Form 10-Q.
(b) Reports on Form 8-K.
The registrant filed no report on Form 8-K during the three months ended
June 28, 1997.
</TABLE>
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 15, 1997
Page 14 of 14
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NATIONAL VISION ASSOCIATES, LTD.
RESTATED NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
ARTICLE I
Purpose, Scope and Administration of the Plan
1.1 Purpose. The purpose of the Plan is to promote the long-term
success of NATIONAL VISION ASSOCIATES, LTD. by providing financial incentives
to non-employee directors who are in positions to make significant
contributions toward such success. The Plan is designed to attract and
retain individuals of outstanding ability to serve as directors of NATIONAL
VISION ASSOCIATES, LTD. and to encourage such directors to acquire a
proprietary interest in NATIONAL VISION ASSOCIATES, LTD., to continue service
as directors of NATIONAL VISION ASSOCIATES, LTD., and to render superior
performance during such service. The Plan restates the Non-Employee Director
Stock Option Plan adopted by the Board in July 1992 and approved by the
shareholders of the Company in May 1993.
1.2 Definitions. Unless the context clearly indicates otherwise, for
purposes of this Plan the following terms have the following meanings:
(a) "1997 Annual Meeting" means the annual meeting of shareholders
of the Company scheduled to be held on April 29, 1997, or any
adjournment thereof.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation Committee of the Board.
(e) "Common Stock" means the Common Stock of the Company, par value
$.01 per share.
(f) "Company" means National Vision Associates, Ltd., a Georgia
corporation.
(g) "Disability," as applied to a Grantee, means that the Grantee
(1) has established to the satisfaction of the Committee that
the Grantee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous
period of not less than 12 months, and (2) has satisfied any
requirement imposed by the Committee in regard to evidencing
such disability.
1<PAGE>
<PAGE>
(h) "Effective Date" shall have the meaning specified in Section
1.5.
(i) "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.
(j) "Grant Date," as used with respect to a particular Option,
means the date as of which such Option is granted.
(k) "Grantee" means the Non-Employee Director to whom an Option
is granted.
(l) "Non-Employee Director" means any duly elected member of the
Board who does not constitute an "employee" of the Company
for purposes of Section 422 of the Code.
(m) "Option" means an option granted under this Plan.
(n) "Option Agreement" means the agreement between the Company
and a Grantee under which the Grantee is granted an Option.
2<PAGE>
<PAGE>
(o) "Option Period" means, subject to Article II hereof, with
respect to any Option, the period beginning on the date an
Option first becomes exercisable and ending at such time not
later than the tenth anniversary of the Grant Date, during
which the Option may be exercised.
(p) "Plan" means the National Vision Associates, Ltd. Restated
Non-Employee Director Stock Option Plan as set forth herein
and as amended from time to time.
(q) "Shares" means shares of Common Stock.
1.3 Aggregate Limitation.
(a) The aggregate number of Shares with respect to which Options
may be granted shall not exceed 500,000 Shares, subject to
possible adjustment in accordance with Section 3.1.
(b) Any Shares to be delivered by the Company upon the exercise of
Options shall, at the discretion of the Committee, be issued
from the Company's authorized but unissued shares of Common
Stock or transferred from any available Common Stock held in
treasury.
(c) In the event any Option expires or otherwise terminates prior
to being fully exercised, new Options may be granted hereunder
for the Shares with respect to which the expired or terminated
Option was not exercised.
1.4 Administration of the Plan.
(a) The Plan shall be administered by the Committee which shall
have the authority:
(1) To interpret and construe the provisions of the Plan and
to establish rules and regulations related to it;
(2) To prescribe the terms and conditions of the Option
Agreements in accordance and consistent with the
requirements of the Plan; and
(3) To make all other determinations necessary or advisable
to administer the Plan in a proper and effective manner.
(b) All decisions and determinations of the Committee in the
administration of the Plan and on questions or other matters
concerning the Plan or any Option shall be final, conclusive
and binding on all persons, including, without limitation,
the Company, the shareholders and directors of the Company
and any persons having any interest in any Options which may
be granted under the Plan.
3<PAGE>
<PAGE>
1.5 Effective Date and Duration of Plan. The Plan shall be submitted
to the shareholders of the Company for adoption in accordance with the
Georgia Business Corporation Code and, if adopted by a majority of all
outstanding shares entitled to vote thereon at the 1997 Annual Meeting,
shall become effective as of the date of adoption by the shareholders (the
"Effective Date"). Unless previously terminated by the Board, the Plan
(but not any then outstanding Options which have not yet expired or
otherwise terminated) shall terminate on the tenth anniversary of the
Effective Date. The restatement of this Plan shall have no effect whatsoever
on any options heretofore granted pursuant to the Plan, all of which shall
remain in full force and effect pursuant to this Plan.
ARTICLE II
Stock Options
2.1 Grant of Options. On the date of the 1997 Annual Meeting and on
the date of each subsequent annual meeting of shareholders of the Company,
each person who is a Non-Employee Director immediately after such meeting
of shareholders shall be granted an Option to purchase 7,500 Shares,
provided, that if on any such subsequent date the Shares available for
grant under the Plan are insufficient to cover such levels of grants, then
each such director shall be granted Options to purchase that number of
Shares which is equal to the number of Shares available for grant hereunder
divided by the number of Non-Employee Directors then serving as directors.
Any person elected to the Board subsequent to the 1997 Annual Meeting at a
time other than at any other annual meeting of shareholders who becomes a
Non-Employee Director shall, upon the date of such election, be granted
an Option to purchase a whole number (rounded downward) of Shares
determined by multiplying 7,500 by a fraction, the numerator of which
shall be the number of days between the date of such election and the date
which is the first anniversary of the date of the last preceding annual
meeting of shareholders and the denominator of which shall be 365.
2.2 Option Requirements.
(a) An Option shall be evidenced by an Option Agreement
specifying the number of Shares that may be purchased upon
its exercise and containing such other terms and conditions
consistent with the Plan as the Committee shall determine.
(b) No Option shall be granted on or after the tenth anniversary
of the Effective Date.
4<PAGE>
<PAGE>
(c) Options shall become vested and exercisable with respect to
50% of the Shares subject to such Option on the second
anniversary of the Grant Date thereof, 25% of such Shares on
each of the third and fourth anniversaries thereof, and 100%
immediately upon the death of the Grantee.
(d) An Option shall expire by its terms at the expiration of the
Option Period and shall not be exercisable thereafter.
(e) The Option price per Share shall be equal to the Fair Market
Value of a Share on the Grant Date.
(f) Unless the Committee provides otherwise in the Option
Agreement, an Option shall not be transferable other than by
will or the laws of descent and distribution and, during the
Grantee's lifetime, an Option shall be exercisable only by
the Grantee, or if the Grantee is disabled and the Option
remains exercisable, by his or her duly appointed guardian or
other legal representative.
(g) Notwithstanding the Option Period applicable to an Option
granted hereunder, such Option, to the extent that it has not
previously been exercised, shall terminate upon the earliest
to occur of (1) the expiration of the applicable Option
Period as set forth in the Option Agreement granting such
Option, (2) the expiration of 90 days after the Grantee's
retirement or termination from service on the Board for any
reason other than Disability or death, or (3) the expiration
of six months after the death or Disability of the director
entitled to the Option.
(h) A person electing to exercise an Option shall give written
notice of such election to the Company, in such form as the
Committee may require, accompanied by payment in the manner
determined by the Committee, of the full purchase price of
the shares of Common Stock for which the election is made.
Payment of the purchase price shall be made in cash or in
such other form as the Committee may approve, including Shares
valued at their Fair Market Value on the date of exercise of
the Option.
(i) Upon the occurrence of a Change in Control, and except as
provided in the Option Agreement or Section 2.2(j), all
outstanding, unvested Options shall become fully vested and
immediately exercisable.
For purposes of the Plan, a "Change in Control" shall be
deemed to have occurred if:
5<PAGE>
<PAGE>
(1) 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, directly and/or indirectly,
more than 50% of the then outstanding Shares or more
than 50% of the assets of the Company; or
(2) more than 35% of the then outstanding Shares 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
(3) 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
(4) 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.
(j) No Option 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 above shall not apply in
a transaction involving a Change in Control if both of the
following circumstances exist:
(1) The provisions contained in Section 2.2(i) create
conditions which would preclude the use of pooling of
interests accounting, and
(2) The completion of the transaction is subject to the use
of pooling of interests accounting.
ARTICLE III
General Provisions
3.1 Adjustment Provisions.
(a) In the event of (1) any dividend payable in Shares; (2) any
recapitalization, reclassification, split-up or consolidation
of, or other change in, the Common Stock; or (3) an exchange
6<PAGE>
<PAGE>
of the outstanding Shares, in connection with a merger,
consolidation or other reorganization of or involving the
Company or a sale by the Company of all or a portion of its
assets, for a different number or class of shares of stock or
other securities of the Company or for shares of the stock or
other securities of any other corporation, then the Committee
shall, in such manner as it shall determine in its sole
discretion, appropriately adjust the number and class of
shares or other securities which shall be subject to Options
and/or the purchase price per Share which must be paid
thereafter upon exercise of any Option. Any such adjustments
made by the Committee shall be final, conclusive and binding
upon all persons, including, without limitation, the Company,
the shareholders and directors of the Company and any
persons having any interest in any Options.
(b) Except as provided in paragraph (a) immediately above,
issuance by the Company of shares of stock of any class or
securities convertible into shares of stock of any class
shall not affect the Options.
3.2. Additional Conditions. Any Shares issued or transferred under any
provision of the Plan may be issued or transferred subject to such conditions,
in addition to those specifically provided in the Plan, as the Committee or
the Company may impose.
3.3 No Right as Shareholder. No Grantee or any other person
authorized to purchase Common Stock upon exercise of an Option shall have
any interest in or shareholder rights with respect to any Shares which are
subject to any Option until such Shares have been issued and delivered to
the Grantee or any such person pursuant to the exercise of such Option.
3.4 Legal Restrictions. If in the opinion of legal counsel for the
Company the issuance or sale of any Shares pursuant to the exercise of an
Option would not be lawful for any reason, including without limitation
the inability of the Company to obtain from any governmental authority or
regulatory body having jurisdiction the authority deemed by such counsel
to be necessary to such issuance or sale, the Company shall not be obligated
to issue or sell any Common Stock pursuant to the exercise of an Option to
the Grantee or any other authorized person unless a registration statement
that complies with the provisions of the Securities Act of 1933, as amended
(the "Act") in respect of such Shares is in effect at the time thereof, or
other appropriate action has been taken under and pursuant to the terms and
provisions of the Act, or the Company receives evidence satisfactory to
such counsel that the issuance and sale of such Shares, in the absence of
an effective registration statement or other appropriate action, would not
constitute a violation of the Act or any applicable state securities law.
The Company is in no event obligated to register any such Shares, to comply
with any exemption from registration requirements or to take any other action
which may be required in order to permit, or to remedy or remove any
prohibition or limitation on, the issuance or sale of such Shares to any
Grantee or other authorized person.
7<PAGE>
<PAGE>
3.5 Rights Unaffected. The existence of the Options shall not affect:
(i) the right or power of the Company or its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business; (ii) any issue of bonds, debentures, preferred or
prior preference stocks affecting the Common Stock or the rights thereof;
(iii) the dissolution or liquidation of the Company, or sale or transfer of
any part of its assets or business; (iv) or any other corporate act of the
Company, whether of a similar character or otherwise.
3.6 Withholding Taxes. As a condition of exercise of an Option, the
Company may, in its sole discretion, withhold or require the Grantee to pay
or reimburse the Company for any taxes which the Company determines are
required to be withheld in connection with the grant or any exercise of an
Option.
3.7 Choice of Law. The validity, interpretation and administration of
the Plan and of any rules, regulations, determinations or decisions made
thereunder, and the rights of any and all persons having or claiming to have
any interest therein or thereunder, shall be determined exclusively in
accordance with the laws of the State of Georgia.
Without limiting the generality of the foregoing, the period
within which any action in connection with the Plan must be commenced shall
be governed by the laws of the State of Georgia, without regard to the place
where the act or omission complained of took place, the residence of any
party to such action or the place where the action may be brought or
maintained.
3.8 Amendment, Suspension and Termination of Plan. The Plan may, from
time to time, be terminated, suspended or amended by the Board in such
respects as it shall deem advisable; provided, however, that no such amendment
shall change the following:
(a) The maximum aggregate number of Shares for which Options may
be granted under the Plan, except as required under any
adjustment pursuant to Section 3.1 hereof;
(b) The Option exercise price, with the exception of any change
in such price required as a result of any adjustment pursuant
to Section 3.1 hereof and with the further exception of
changes in determining Fair Market Value of Shares to conform
with any then applicable provision of the Code or regulations
promulgated thereunder;
(c) The maximum period during which Options may be exercised;
(d) The termination date of the Plan in any manner which would
extend such date; or
8<PAGE>
<PAGE>
(e) The requirements as to eligibility for participation in the
Plan in any material respect.
Provided, that in no event may the Plan be amended more than once every six
months, other than to comport with changes in the Code, the Employee
Retirement Income Security Act or the rules thereunder.
AS APPROVED BY THE BOARD OF DIRECTORS OF NATIONAL VISION ASSOCIATES,
LTD. ON FEBRUARY 12, 1997.
NATIONAL VISION ASSOCIATES, LTD.
By: /s/ James W. Krause
-------------------
9<PAGE>
<PAGE>
NATIONAL VISION ASSOCIATES, LTD.
RESTATED NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
THIS RESTATED NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT (together
with any amendments hereto, hereinafter referred to as the "Agreement"),
made and entered into as of the day or days set forth on Schedule I hereto
(Schedule I hereto and any amendments thereto being hereby incorporated
herein and made a part of this Agreement by this reference) by and between
NATIONAL VISION ASSOCIATES, LTD., a corporation organized under the laws
of the State of Georgia (hereinafter referred to collectively as the
"Corporation"), and the non-employee director of the Corporation designated
on Schedule I hereto (hereinafter referred to as the "Director").
W I T N E S S E T H:
WHEREAS, on April 29, 1997, the Corporation adopted the National Vision
Associates, Ltd. Restated Non-Employee Director Stock Option Plan (the
"Plan"); and
WHEREAS, the Director has been selected as an optionee under the Plan,
and the Corporation desires to grant to the Director an option to purchase
shares of the Corporation's Common Stock, $.01 par value per share (the
"Common Stock"), on the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements and covenants hereinafter set forth and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF OPTION AND TERM. Subject to the terms and conditions of
this Agreement and the terms and conditions of the Plan, which are
incorporated herein by reference and which shall govern in the event of any
inconsistent or contrary term or condition herein, the Corporation hereby
irrevocably grants to the Director the right and option (the "Option") to
purchase the number of shares of the Common Stock set forth on Schedule I
attached hereto (the "Option Shares"), exercisable in accordance with the
provisions of paragraph 2 hereof.
Subject to earlier termination as provided in paragraph 2(e) hereof,
the term of this Option is ten (10) years. In no event may this option be
exercised as to any shares covered hereby after 5:00 p.m. on the date which
immediately precedes the tenth anniversary of the date of this Agreement.
2. OPTION PRICE AND EXERCISE.
(a) Option Price. The purchase price of each share of Common
Stock subject to this Option shall be the amount set forth on Schedule I
hereto, which price represents a value not less than the Fair Market Value
of each such share as of the date of grant of this Option.
1<PAGE>
<PAGE>
(b) Exercise of Option. Subject to the other provisions of this
Agreement, the Director may exercise this Option only to the extent of
one-half (1/2) of the total number of shares subject to such Option, or any
portion thereof, after two (2) years from the date hereof and with respect
to an additional one-fourth (1/4) of the number of such shares, or any
portion thereof, after each succeeding anniversary date hereof, as set
forth on Schedule I hereto.
The right to exercise this Option as to any portion of the shares
covered hereby on or after the respective times provided above is cumulative,
and a failure to exercise any portion of this Option in any year shall not
constitute a lapse of such right during the term of this Option.
Notwithstanding any other provision of this Agreement, no partial exercise
of this Option may be made for less than 50 shares or, if less than 50 shares
are still available for exercise under this Option, the number of such
remaining shares.
(c) Manner of Exercise. This Option may be exercised by
delivering written notice of exercise to the Secretary of the Corporation,
in person, or by mail, postage prepaid, addressed to the attention of the
Secretary of the Corporation at the location at which the Corporation then
maintains its principal office, and if so mailed, the date of mailing will
be considered the date of exercise. Such notice shall be in substantially
the form of Exhibit A attached hereto and shall be accompanied by payment in
full of the total purchase price for the shares being purchased. If approved
by the Committee at the time of such exercise, such payment may be made, in
whole or in part, by transfer and delivery to the Corporation of shares of
Common Stock, free and clear of any liens, encumbrances or charges of any
kind, valued at their Fair Market Value (as defined in the Plan) on the date
of such exercise. The Corporation, in the event of exercise by an
authorized person other than the Director, may require proof of the right
of such person to exercise this Option. As promptly as practicable after
receipt by the Corporation of the aforementioned notice to purchase and the
full purchase price, the Corporation shall cause to be issued to the person
entitled to purchase the shares for which this Option is exercised, stock
certificate(s) for the number of shares of Common Stock being purchased,
which shall evidence fully paid and nonassessable shares.
(d) Person Who May Exercise Option. During the lifetime of the
Director, this Option shall be exercisable only by the Director, or if the
Director is disabled, by his duly appointed guardian or legal representative.
Upon his death, this Option may be exercised by the Director's legal
representative or by a person who receives the right to exercise this
Option under the Director's will or by the applicable laws of descent and
distribution.
(e) Earlier Termination of Option. Notwithstanding the
provisions of subparagraph 2(b) hereof, this Option, to the extent that it
has not previously been exercised, shall terminate upon the earliest to
occur of (i) the expiration of the term of this Option as set forth in
paragraph 1 hereof, (ii) the expiration of 90 days after the Director's
resignation or retirement from service on the Board of Directors of the
Corporation for any reason other than Disability (as defined in the Plan)
or death, or (iii) the expiration of six months after the death or the
Disability (as defined in the Plan) of the Director.
2<PAGE>
<PAGE>
3. TRANSFERABILITY. This Agreement and any rights hereunder shall
be nontransferable and nonassignable by the Director or by any other person
entitled hereunder to exercise any such rights; provided, however, that upon
the death of the Director any rights granted hereunder shall be transferable,
subject to the provisions of subparagraph 2(e) hereof, by the Director's
will or by the applicable laws of descent and distribution.
4. ADJUSTMENT OF SHARES. In the event of (i) any dividend payable
in shares of Common Stock; (ii) any recapitalization, re-classification,
split-up or consolidation of, or other change in, the Common Stock; or
(iii) an exchange of the outstanding shares of Common Stock, in connection
with a merger, consolidation or other reorganization of the Corporation or
a sale by the Corporation of all or a portion of its assets, for a different
number or class of shares of stock or other securities of the Corporation
or for shares of the stock or other securities of any other corporation;
then the Committee shall, in such manner as it shall determine in its sole
discretion, appropriately adjust the number and class of the Option Shares
or the number and class of shares or other securities that shall then be
subject to this Option and/or the purchase price per share which must be
paid thereafter upon exercise of this Option.
5. INVESTMENT REPRESENTATION. The Director hereby represents,
warrants and agrees that:
(a) The offer of shares under this Agreement is made pursuant to
a claim of exemption from the registration provisions of the Securities Act
of 1933, as amended (the "Act") and applicable state securities law;
(b) The Corporation shall not be obligated to issue shares of the
Common Stock upon exercise of this Option until there has been compliance
with any federal, state or foreign laws or regulations which the Corporation
may deem applicable;
(c) The shares that shall be purchased under this Agreement will
be purchased for his own account for investment purposes only and not with a
view to resale or distribution thereof;
(d) The shares subject to this Agreement may be unregistered and,
if so, will be required to be held indefinitely, unless such shares are
subsequently registered or an exemption from registration is then available;
(e) The Corporation is under no obligation to register such
shares, to comply with any such exemption or to supply the Director with any
information to enable him to make routine sales of such shares under Rule
144 or any other rule or regulation of the Securities and Exchange
Commission; and
3<PAGE>
<PAGE>
(f) The transfer agent for the Corporation may be instructed not
to transfer ownership of the stock certificate(s) representing shares
acquired upon any exercise of this Option, unless in the prior written
opinion of counsel reasonably acceptable to the Corporation, such transfer
is lawful under the Act and applicable state securities laws.
In regard to the foregoing, the Director understands and agrees that
the certificate(s) evidencing any shares that may be purchased pursuant to
the exercise of this Option which have not been registered under the Act or
any applicable state securities law, may bear an appropriate restrictive
legend in a form determined in the sole discretion of the Corporation.
6. LEGAL RESTRICTIONS. If in the opinion of legal counsel for the
Corporation the issuance or sale of any shares of Common Stock pursuant to
the exercise of this Option would not be lawful for any reason, including
without limitation the inability of the Corporation to obtain from any
governmental authority or regulatory body having jurisdiction the authority
deemed by such counsel to be necessary to such issuance or sale, the
Corporation shall not be obligated to issue or sell any Common Stock
pursuant to the exercise of this Option to the Director or any other
authorized person unless a registration statement that complies with the
provisions of the Act in respect of such shares is in effect at the time
thereof, or other appropriate action has been taken under and pursuant to
the terms and provisions of the Act, or the Corporation receives evidence
satisfactory to such counsel that the issuance and sale of such shares, in
the absence of an effective registration statement or other appropriate
action, would not constitute a violation of the Act or any applicable state
securities law. It is further agreed that the Corporation is in no event
obligated to register any shares, to comply with any exemption from
registration requirements or to take any other action which may be required
in order to permit, or to remedy or remove any prohibition or limitation on,
the issuance or sale of such shares to the Director.
7. NO RIGHTS AS SHAREHOLDER. Neither the Director nor any other
person authorized to purchase Common Stock upon exercise of this Option
shall have any interest in or shareholder rights with respect to any shares
of the Common Stock which are subject to this Option until such shares have
been issued and delivered to the Director or any such person pursuant to
the exercise of this Option.
8. WITHHOLDING TAXES. As a condition of exercise of this Option,
the Corporation may, in its sole discretion, withhold or require the Director
to pay or reimburse the Corporation for any taxes which the Corporation
determines are required to be withheld in connection with the grant or any
exercise of this Option.
9. HEIRS AND SUCCESSORS. This Agreement and all terms and conditions
hereof shall be binding upon the Corporation and its successors and assigns,
and upon the Director and his heirs, legatees and legal representatives.
4<PAGE>
<PAGE>
10. AMENDMENT. The Corporation hereby reserves the right to amend
this Agreement, except that no such amendment shall adversely affect the
rights of the Director hereunder without his written consent.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officer on Schedule I hereto, and the
Director has executed this Agreement on Schedule I hereto, all as of the
date and year set forth on Schedule I hereto.
5<PAGE>
<PAGE>
SCHEDULE I
to
NATIONAL VISION ASSOCIATES, LTD.
RESTATED NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
Director:
Date of Grant: Option Price: $____________ per share
Option Shares Granted:
Vesting Schedule:
Number of Shares May Be Purchased Only On Or After
---------------- ---------------------------------
IN WITNESS WHEREOF, the Corporation has caused this Agreement and this
Schedule I to be executed by its duly authorized officer, and the Director
has executed this Agreement and this Schedule I, all as of _________________.
NATIONAL VISION ASSOCIATES, LTD.
By:_______________________________
President
__________________________________
DIRECTOR
6<PAGE>
<PAGE>
EXHIBIT A
EXERCISE OF STOCK OPTION
The undersigned optionee under that certain National Vision Associates,
Ltd. Restated Non-Employee Director Stock Option Agreement, dated as of
February 12, 1997, as it may be amended (the "Agreement"), hereby exercises
the Option granted under the Agreement for the following number of shares of
Common Stock, $.01 par value, subject to the terms and conditions of the
Agreement:
Number of shares being purchased: _________________
Total purchase price submitted herewith: _________________
___________________________________
(Signature)
___________________________________
(Date)
<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
----------------------- -------------------
June 29, June 28, June 29, June 28,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET INCOME $ 1,252 $ 1,620 $ 2,245 $ 3,273
======= ======= ======== =======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 20,615 20,649 20,608 20,649
Common stock equivalents using
the treasury stock method 108 124 74 127
------- ------- ------- -------
AVERAGE COMMON SHARES
OUTSTANDING AS ADJUSTED 20,723 20,773 20,682 20,776
======= ======= ======= =======
NET INCOME PER COMMON SHARE $ 0.06 $ 0.08 $ 0.11 $ 0.16
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT JUNE 28, 1997 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 28, 1997 (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> JAN-03-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> JUN-28-1997
<CASH> 1,669
<SECURITIES> 0
<RECEIVABLES> 5,827
<ALLOWANCES> 402
<INVENTORY> 23,046
<CURRENT-ASSETS> 31,092
<PP&E> 73,539
<DEPRECIATION> 31,695
<TOTAL-ASSETS> 78,143
<CURRENT-LIABILITIES> 19,159
<BONDS> 0
0
0
<COMMON> 207
<OTHER-SE> 32,991
<TOTAL-LIABILITY-AND-EQUITY> 78,143
<SALES> 88,874
<TOTAL-REVENUES> 88,874
<CGS> 40,797
<TOTAL-COSTS> 40,797
<OTHER-EXPENSES> 41,764
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 879
<INCOME-PRETAX> 5,434
<INCOME-TAX> 2,161
<INCOME-CONTINUING> 3,273
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,273
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
