Exhibit 10.8

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of December 1, 2002
between 1-800 CONTACTS, INC., a Delaware corporation (the “Company”), and Graham
David Mullis (the “Executive”).  This Agreement shall be deemed to be effective
as of December 1, 2002 (the “Effective Date”), subject to the Company’s
background check being verified to the Company’s good faith satisfaction.

 

In consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Employment.  The Company shall employ
Executive, and Executive hereby accepts employment with the Company, upon the
terms and conditions set forth in this Agreement, for the period beginning on
the Effective Date and ending as provided in paragraph 4 hereof (the “Employment
Period”).

 

2.                                       Position and Duties.

 

(a)                                  During the Employment Period, Executive
shall serve as President, 1-800 CONTACTS International Division, for the Company
and shall have the normal duties, responsibilities and authority of such
position.  In addition, Executive shall spend at least six months in Singapore
beginning December 2002 to assist in the operations at the Clearlab facility.

 

(b)                                 Executive shall report to the Company’s
Chief Executive Officer and such other persons as the board of directors (“the
Board”) may direct from time to time, and Executive shall devote his best
efforts and his full business time and attention (except for permitted vacation
periods and reasonable periods of illness or other incapacity) to the business
and affairs of the Company and its Subsidiaries (as hereinafter defined). 
Executive shall perform his duties and responsibilities to the best of his
abilities in a diligent, trustworthy, businesslike and efficient manner.

 

(c)                                  For purposes of this Agreement,
“Subsidiaries” shall mean any corporation owned by the Company, directly or
through one or more Subsidiaries.

 

3.                                       Base Salary and Benefits.

 

(a)                                  During the first year of the Employment
Period, Executive’s base salary shall be 175,000 GBP per annum (the “Base
Salary”), which salary shall be payable in regular installments in accordance
with the Company’s general payroll but paid on the 1st day of each Month. 
Thereafter, the Base Salary shall be such higher rate as the Board may designate
from time to time.  As used in this Agreement, the term “Base Salary” shall be
deemed to include any such increases as may be designated from time to time by
corporate management.  During the Employment Period, Executive shall be entitled
to participate in all of the Company’s employee benefit programs for which

 

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management employees of the Company and its Subsidiaries are generally eligible
(including the Company’s stock option program).

 

(b)                                 In addition to the Base Salary, the Board
will award an annual bonus of up to 10% of the Executive’s Base Salary to
Executive following the end of each fiscal year during the Employment Period
upon the Company achieving certain operating targets as determined by the Board
at the beginning of each fiscal year during the Employment Period.

 

(c)                                  At the execution of this Agreement,
Executive shall receive 87,500 GBP (the “Signing Bonus”) which shall be paid on
or before December 16, 2002; provided however, that should Executive resign his
employment or be terminated for Cause prior to May 31, 2003, he shall repay the
pro rata portion of the Signing Bonus to the Company.

 

(d)                                 In addition to the Base Salary and any
bonuses payable to Executive pursuant to this paragraph, Executive shall be
entitled to the following benefits during the Employment Period:

 

(i)                                     20,000 stock options at a strike price
of $25.00 (USD) which shall vest 25% per year for four years with a five year
life, see Exhibit A;

(ii)                                  A maximum of four weeks vacation each year
(20 working days) with salary in addition to the statutory bank holidays of the
UK country, subject to additional vacation time either upon executive approval
or according to the Company vacation policy; and

(iii)                               Reimbursement for travel, entertainment and
other business expenses reasonably incurred by Executive; and

(iv)                              32,115 GBP travel budget for personal trips
back to the UK or for family to visit in Singapore during the period specified
in 3(c) above;

(v)                                 Life insurance provided by Company in amount
equal to four times Executive’s Base Salary; and

(vi)                              Payment of all medical premiums for spouse and
children up to the age of 18 years; and

(vii)                           The Company will make 50% matching contributions
of up to 6% of Executive’s annual Base Salary to an approved personal pension
plan nominated by Executive, i.e. total matched contribution dollars of up to 3%
of Executives annual Base Salary (consistent with Company’s current 401k plan).

 

4.                                       Termination.

 

(a) The Employment Period shall continue until the earliest of (i) Executive’s
resignation upon 60 days’ advance written notice; (ii) Executive’s death,
disability or other incapacity, which cannot be reasonably accommodated, (as
determined by the Board in its good faith judgment); (iii) the Board’s
termination of Executive’s employment for Cause; or (iv) the Board’s termination
of Executive’s employment without Cause.

 

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(b) In the event of Executive’s termination without Cause or his resignation
based on the Company’s material breach of this Agreement, which breach has not
been cured within 30 days of written notice from Executive, Executive shall be
entitled to receive (i) 85% of his Base Salary and the health and life insurance
premiums described in paragraph 3(d) for a period of 12 months thereafter, and
(ii) following the end of the fiscal year in which Executive’s employment is
terminated and the determination of the amount of bonus to which Executive would
have been entitled if he remained employed by the Company or its Subsidiaries
for the entire fiscal year (the “Bonus Amount”), (A) 50% of the Bonus Amount if
such termination occurs in the first six months of such fiscal year or (B) 100%
of the Bonus Amount if such termination occurs in the second six months of such
fiscal year.

 

(c)                                  For purposes of this Agreement, “Cause”
shall mean (i) the willful and continued failure by Executive to perform his
duties of the position set forth herein or his continued failure to perform
duties reasonably requested or reasonably prescribed by the Board, (ii) the
engaging by Executive in conduct which is materially monetarily injurious to the
Company or any of its Subsidiaries, (iii) gross negligence or willful misconduct
by Executive in the performance of his duties which results in, or causes,
material monetary harm to the Company or any of its Subsidiaries, or (iv)
Executive’s commission of a felony or other civil or criminal offense involving
moral turpitude.  In the case of (i), (ii) and (iii) above, finding of Cause for
termination shall be made only after reasonable notice to Executive and an
opportunity for Executive, together with counsel (if requested by executive), to
be heard before the Board.

 

5.                                       Confidential Information.  Executive
acknowledges that the information, observations, data, strategic and development
plans, financial condition, business plans, co-developer identities, business
records, customer lists, clients and suppliers, project records, market reports,
employee lists and business manuals, policies and procedures, information
relating to processes, technologies of theory and all other information which
may be disclosed or obtained by Executive while employed by the Company and its
Subsidiaries concerning the business or affairs of the Company or any other
Subsidiary (“Confidential Information”) are the property of the Company or such
Subsidiary.  Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive’s acts or omissions.  Executive
shall deliver to the Company at the termination of the Employment Period, or at
any other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies or reproductions thereof) relating to the Confidential Information,
Work Product (as defined below) or the business of the Company or any Subsidiary
which he may then possess or have under his control.

 

6.                                       Inventions and Patents.  In accordance
with UCA §34-39-1 et. seq., Executive acknowledges that any invention or part
thereof conceived, developed, reduced to practice, or created by Executive which
is:

(a) conceived, developed, reduced to practice, or created by Executive:

(i) within the scope of his employment;

 

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(ii) on Company’s or its Subsidiaries’ time; or

(iii) with the aid, assistance, or use of any of Company’s or its Subsidiaries’
property, equipment, facilities, supplies, resources, or intellectual property;

(b) the result of any work, services, or duties performed by Executive for
Company or its Subsidiaries;

(c) related to the industry or trade of the Company or its Subsidiaries; or

(d) related to the current or demonstrably anticipated business, research, or
development of the Company or its Subsidiaries is an (“Employment invention”)
and belongs to the Company or such Subsidiary.

(e)  (“Intellectual property”) means any and all patents, trade secrets,
know-how, technology, confidential information, ideas, copyrights, trademarks,
and service marks and any and all rights, applications, and registrations
relating to them.

(f) Executive shall promptly disclose such Employment invention to the Board and
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).

 

7.                                       Non-Compete

 

(a)                                  In further consideration of the
compensation to be paid to Executive hereunder, Executive acknowledges that in
the course of his employment with the Company he shall become familiar with the
Company’s trade secrets and with other Confidential Information concerning the
Company and its Subsidiaries and that his services shall be of special, unique
and extraordinary value to the Company and its Subsidiaries.  Therefore,
Executive agrees that, during the Employment Period and for 12 months
thereafter, (the “Noncompete Period”), he shall not directly or indirectly
manage, control, participate in, consult with, advise, render services for, or
in any manner engage in any activity competing with the businesses of the
Company or its Subsidiaries within any geographical area in which the Company or
its Subsidiaries or the Executive has manufactured, provided, sold or offered or
promoted for sale any of the Company’s products.

 

(b)                                 In the event Executive plans or desires to
form, obtain employment with or otherwise affiliate with any business in the
contact lens industry during the Noncompete Period, he will first give notice to
the Company of his desire and the Company will then make a good faith assessment
regarding whether and under what circumstances Executive may go forward with
such plans without violating the terms of this Agreement.

 

(c)                                  At its sole option, the Company may extend
the Noncompete Period by an additional 12 months by providing Executive written
notice at least 30 days prior to the expiration of the original Noncompete
Period.  In such an event, Executive will receive 75% of his Base Salary during
the second 12 months of the Noncompete Period.

 

8.                                       Non-Solicitation.  Executive agrees
that during the Employment Period and for 24 months thereafter, Executive shall
not directly or indirectly through another entity (i) hire any person who was an
employee of the Company or any Subsidiary at any time during the three-month
period

 

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prior to the expiration of the Employment Period or (ii) induce or attempt to
induce any customer, supplier, licensee, licensor, franchisee or other business
relation of the Company or any Subsidiary to cease doing business with the
Company or such Subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any Subsidiary (including, without limitation, making any negative
statements or communications about the Company or its Subsidiaries) which
interference causes material monetary damage to the Company or its Subsidiaries.

 

9.                                       Enforcement.  If, at the time of
enforcement of paragraph 5, 6, 7 or 8 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area. Because Executive’s services are unique and because Executive has
access to Confidential Information and Work Product, the parties hereto agree
that money damages would not be an adequate remedy for any breach of this
Agreement.  Therefore, in the event of a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to all
other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce, or prevent any violations of, the provisions hereof
(without posting a bond or other security).  In addition, in the event of an
alleged breach or violation by Executive of paragraph 7, the Noncompete Period
shall be tolled until such breach or violation has been duly cured.  Executive
agrees that the restrictions contained in paragraphs 7 and 8 are reasonable.

 

10.                                 Executive’s Representations.  Executive
hereby represents and warrants to the Company that (i) the execution, delivery
and performance of this Agreement by Executive do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which
he is bound, (ii) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms.  Executive hereby
acknowledges and represents that he fully understands the terms and conditions
contained herein.

 

11.                                 Survival.  Paragraphs 5, 6, 7, 8 and 9 and
paragraphs 11 through 19 shall survive and continue in full force in accordance
with their terms notwithstanding any termination of the Employment Period.

 

12.                                 Notices.  Any notice provided for in this
Agreement shall be in writing and shall be either personally delivered, or
mailed by first class mail, return receipt requested, to the recipient at the
address below indicated:

 

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Notices to Executive:

 

Graham David Mullis
18 Levignen Close
Church Crookham
Fleet
Hampshire
GU52 0TW
UK

 

Notices to the Company:

 

1-800 CONTACTS, INC.
66 E. Wadsworth Park Drive, 3rd Floor
Draper, Utah  84020
Attn:  Board of Directors

 

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.  Any
notice under this Agreement shall be deemed to have been given when so delivered
or mailed.

 

13.                                 Severability.  Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

 

14.                                 Complete Agreement.  This Agreement, those
documents expressly referred to herein and other documents of even date herewith
embody the complete agreement and understanding among the parties and supersede
and preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.

 

15.                                 No Strict Construction.  The language used
in this Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction shall
be applied against any party.

 

16.                                 Counterparts.  This Agreement may be
executed in separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement.

 

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17.                                 Successors and Assigns.  This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive,
the Company and their respective heirs, successors and assigns, except that
Executive may not assign his rights or delegate his obligations hereunder
without the prior written consent of the Company.

 

18.                                 Choice of Law.  All issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of Utah, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Utah or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Utah.

 

19.                                 Amendment and Waiver.  The provisions of
this Agreement may be amended or waived only with the prior written consent of
the Company and Executive, and no course of conduct or failure or delay in
enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

 

1-800 CONTACTS, INC.

 

 

 

 

 

By:

 

 

 

Name: Jonathan Coon

 

Its: Chief Executive Officer

 

 

 

 

 

 

 

 

Graham David Mullis

 

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