EXHIBIT 10.1
[Acuity Brands, Inc. Letterhead]
April 26, 2005
Edward H. Bastian
[Address]
Dear Ed:
I am pleased to confirm our offer to you of the position of Senior Vice
President and Chief Financial Officer for Acuity Brands, Inc. ("Acuity" or
"Acuity Brands"). I believe this is an exciting opportunity for you, and I am
confident that you will have a significant impact on the future success of the
Corporation. This letter confirms the details of our offer.
EFFECTIVE DATE
You will assume the duties of your new position effective as of June 1, 2005
(the "Effective Date").
DUTIES
You will be employed on a full-time basis as the Senior Vice President and Chief
Financial Officer for Acuity Brands and will report to the Chairman and Chief
Executive Officer. In that capacity, you will perform the duties and
responsibilities normally associated with that position, including those
described on Exhibit "A" attached hereto.
COMPENSATION
BASE SALARY
Your starting base salary will be $31,250 per month, paid on a monthly basis in
arrears and based on an annual salary of $375,000. Your salary will be reviewed
annually beginning October 2005.
SIGN-ON BONUS
You will receive a sign-on bonus of $250,000, which will be paid in lieu of
relocation expenses. Should you voluntarily terminate your employment with
Acuity Brands, Inc. within three years of the Effective Date, you will be
required to repay the sign-on bonus on a pro rata, after tax basis, assuming a
tax rate of 45%.
ANNUAL INCENTIVE PLAN
You will participate in the Acuity Brands, Inc. Management Compensation and
Incentive Plan, currently providing an annual bonus opportunity of 55% of salary
at target performance, with a maximum opportunity of 110% of salary. Your fiscal
year 2005 bonus will be calculated pro rata based on the number of weeks of your
employment with Acuity Brands during the fiscal year ending August 31, 2005.
ED BASTIAN PAGE 2
LONG-TERM INCENTIVE PLAN
You will participate in the Acuity Brands, Inc. Long-Term Incentive Plan (the
"Plan"). Under the terms of the Plan you will have the opportunity for awards
calculated as a percentage of your base salary and determined by your position
in Tier 1 of the award structure, by the performance of Acuity Brands, and by
your contribution to that performance. Your base salary multiplied by 90% will
be used as the starting point for any annual award that may be granted beginning
in fiscal year 2006, adjusted for the performance of Acuity Brands for the
fiscal year ended August 31, 2005 and your individual performance for the
portion of the year you are employed.
You will receive a one-time initial award under the Plan of 25,000 time-vesting
restricted shares, which will vest in four equal annual installments beginning
one year from the Effective Date, and a stock option for 25,000 shares, which
will vest in three equal annual installments beginning one year from the
Effective Date and will have an exercise price equal to the fair market value
(closing price) of Acuity Brands common stock on the Effective Date.
RETIREMENT PLANS
You will be eligible to participate in the Acuity Brands, Inc. 401(k) Plan,
which currently includes a company match of 60% of deferrals up to 6% of salary,
subject to applicable federal limitations.
You will be eligible to participate in the Acuity Brands, Inc. 2002 Supplemental
Executive Retirement Plan (the "SERP"), as it may be revised or replaced to
comply with Section 409A of the Internal Revenue Code. Your benefits under the
SERP will be determined pursuant to the standard provisions of the SERP in
accordance with the effective date of your eligibility.
DEFERRED COMPENSATION PLAN
You will be eligible to participate in the Acuity Brands, Inc. Supplemental
Deferred Savings Plan (the "SDSP" or "Plan") under the standard provisions of
the Plan or such subsequent deferred compensation plan that may be adopted to
comply with Section 409A of the Internal Revenue Code. Under the current
provisions of the SDSP, you may defer up to 50% of your annual cash compensation
(base salary and bonus), which earns interest at the prime rate. (As an
executive officer with eligibility for the SERP, you will not be eligible to
receive the company contribution or match under the SDSP.)
MEDICAL, LIFE INSURANCE, AND OTHER EMPLOYEE BENEFITS
You will be eligible to participate in the medical, dental, life insurance,
disability, and other benefit programs generally made available to employees of
Acuity Brands, which include:
Medical
Prescription Drug Plan
Life Insurance
Short-Term Disability
Long-Term Disability
Flex Benefit Program
Voluntary Dental Program
Voluntary EyeMed Program
VACATION
You will be entitled to four (4) weeks vacation per calendar year.
ED BASTIAN PAGE 3
EMPLOYMENT AT WILL/SEVERANCE PAYMENTS/CHANGE IN CONTROL
Your employment will be at will and may be terminated by either Acuity Brands,
Inc. or by you at any time for any reason, with or without notice. Except in the
event of a termination in connection with a Change in Control of Acuity Brands,
Inc. (as defined in the Severance Protection Agreement that will cover you), you
will be covered by a Severance Agreement consistent with those provided other
senior vice presidents of the Corporation, which provides you a severance
benefit in the event your employment in this position is terminated for any
reason other than voluntary termination (including early or normal retirement),
termination upon death or Disability, or termination by Acuity Brands for Cause.
The terms Cause and Disability used in this paragraph will be defined in the
Severance Agreement.
With respect to Change in Control situations, you will be covered by a Severance
Protection Agreement with the same provisions as are generally applicable to
officers of Acuity Brands at a multiple of two times base salary. In the event
of your termination in connection with a Change in Control that entitles you to
benefits under the Severance Protection Agreement, you will receive the greater
of the payments and benefits provided under the Severance Protection Agreement
or the severance payment described above.
The base salary, annual incentive, long-term incentive, nonqualified retirement
benefits, and any severance payment will be structured to provide the tax
deductibility to Acuity Brands, Inc. of the payments and benefits under the
Internal Revenue Code of 1986.
We look forward to your joining Acuity Brands and to a long and mutually
satisfactory relationship. This letter outlines your employment relationship
with Acuity Brands; if you agree with the employment terms as outlined above,
please sign and date both copies of this letter agreement and return one copy to
me at your earliest convenience.
Sincerely,
/s/ Vernon J. Nagel
Vernon J. Nagel
Chairman and Chief Executive Officer
ACCEPTED AND AGREED TO THIS
26th day of April, 2005
/s/ Edward H. Bastian
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Edward H. Bastian