This excerpt taken from the EYE 8-K filed May 18, 2005.
Change in Control Agreements
We are party to change in control agreements, a form of which is filed as Exhibit 10.7 hereto, with each of the executive officers listed on Exhibit 10.8 hereto. The change in control agreements have a term of two years and may be automatically extended for successive one-year terms unless we elect in writing not to extend the term. The change in control agreements provide that, in the event the executives employment is terminated (i) by us without cause or by him or her for good reason within two years after a change in control event occurs, or (ii) prior to a change of control event and it is determined that such termination (x) was at the request of a third party who subsequently effectuates a change of control or (y) otherwise occurred in connection with, or in anticipation of, a change of control that actually occurs, the executive will receive a severance payment equal to one- or two- times (depending on the executives salary grade level) his or her annual compensation. For the purposes of this severance payment calculation, the executives annual compensation is defined as the sum of (i) the higher of the executives then-current base salary or his or her highest annual salary within the five-year period ending at the time of his or her termination plus (ii) a management bonus increment, which is equal to the average of the two highest of the last five bonuses paid by us to the executive, or if no such bonus was paid the then-current annual target bonus rate. The change in control agreements also provide that all of the executives stock options, incentive compensation awards and restricted stock that are outstanding at the time of the termination will immediately become fully exercisable, payable or free from restrictions, respectively. The applicable exercise period for any stock option or other award will continue for the length of the exercise period specified in the grant of the award as determined without regard to the executives termination of employment. In addition, the agreements provide that in the event that any payment or benefits pursuant to the change in control agreements is deemed to constitute an excess parachute payment under Section 280G of the Internal Revenue Code, the executive is entitled to an excise tax gross-up payment to the full extent of his or her corresponding excise tax liability. The executive will also be allowed to continue to participate for one or two years (depending on the
executives salary grade level) following his or her termination in all of our employee benefit plans that were available to him or her before termination. Finally, the agreements provide that if executive is a participant in a defined benefit plan or supplemental employee retirement plan maintained by us, the executives benefit under such plans shall be calculated as if the executive had worked for an additional one or two years (depending on the executives salary grade level). The change in control agreements also provide for confidentiality provisions, and agreement by the executive not to solicit any of our employees for a period of one year following termination of employment.
Item 9.01 Financial Statements and Exhibits.