Exhibit 10.1

 

WITHOUT PREJUDICE

SUBJECT TO CONTRACT

DATED NOVEMBER 20, 2006

1-800 CONTACTS, INC.

and

GRAHAM DAVID MULLIS

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COMPROMISE AGREEMENT

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Bird & Bird

90 Fetter Lane

London

EC4A 1JP

Tel: 020 7415 6000

Fax: 020 7415 6111

Ref: WDW/ARD/CONTS.0001

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THIS AGREEMENT is made the        day of November 2006

BETWEEN:

(1)                                  1-800 CONTACTS, Inc., a Delaware
Corporation of 66 E. Wadsworth Park Drive, Draper Utah 84020 (the “Company”);

and

(2)                                  Graham David Mullis whose address is 8
Badger Way, Ewshot, Farnham, Surrey, GU10 5TE, United Kingdom (“you/your”)

who shall together be called the “Parties”.

OPERATIVE PROVISIONS:

1                  Termination of Employment

1.1.                    You were employed under the Contract and your Employment
will terminate on 20 November 2006 (the Termination Date).  You will receive
salary and benefits up to and including the Termination Date as normal.  After
the Termination Date you will receive payment in lieu of your 10 days’ accrued
but untaken pro rata holiday pay.  The payments referred to in this Clause will
be subject to your usual PAYE Deductions.

1.2.                    You are required to conduct a handover of your duties
prior to 20 November 2006. You warrant that you will perform the handover and
any duties assigned to you diligently and co-operatively.

1.3.                    During the handover of your duties and through the
Termination Date you:

1.3.1.                     must not attend any premises of the Company or any
other Group Company without the prior written consent of the Company;

1.3.2.                     must not, except in accordance with the public
announcements made by the Company in relation to your termination, contact any
customer supplier or business contact of the Company (except where you have the
Company’s permission to do so as part of your efforts to find alternative work)
or undertake any work on behalf of the Company or any other Group Company
without the prior written consent of the Company;

1.3.3.                     must not contact or have any dealings with any staff
of the Company or any other Group Company other than for purely social reasons
without the Company’s prior written consent;

1.3.4.                     must not contact the press or other media or make any
statement to them regarding your Employment or your prospective termination;

1.3.5.                     must not make any statement which is inconsistent
with the external announcement at Appendix 3 to any customers, suppliers and
business contacts of the Company regarding your Employment or your prospective
termination without the Company’s prior written consent;

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1.3.6.                     will remain subject to your obligations of fidelity
and confidentiality already in force and

1.3.7.                     shall be deemed to have taken all holiday which
accrues from 11 November 2006 up to the Termination Date.

1.4.                    You confirm that there are no contractual claims
outstanding at the Termination Date, other than under this Clause 1.

2                  Expenses

2.1.                    You should submit your final expenses claim to the
Company within five days of Completion. You will be reimbursed, upon prior
written approval, for any expenses reasonably and necessarily incurred in the
proper performance of your duties on compliance with the Company’s expenses
policy.

3                  Payments

3.1.                    The Company will on behalf of itself and all Protected
Persons make a payment to you without admission of liability as compensation in
respect of the Specific Claims (the “Termination Payment”) consisting of:

3.1.1.                     £155,675 pursuant to Clause 4(b)(i) of the Contract,
payable in 12 monthly instalments from 20 November 2006 to 19 October 2007 and
your continued membership of the Group scheme or a similarly designated health
insurance scheme until 19 October 2007 (or the commencement of any Work,
whichever is earlier) subject to the rules of that scheme;

3.1.2.                     a prorated bonus payment relating to the 2006 STI
Plan which will be equal to 21% of your STI eligible pay in 2006 (calculated
based upon no payment for the 2006 financial performance of Clearlab and payment
at target performance against the remaining three goals in the 2006 revised goal
statement provided to you separately) prorated by 11/12 (representing 11 months
worked) and less the £16,695 previously paid to you for the Company’s July
Event, payable on or after 9 February 2007;

3.1.3.                     twelve equal monthly payments of £1,063.48 in respect
of contributions to the Pension Scheme pursuant to Clause 4(b)(i) of the
Contract, which shall be paid on the same basis as that which was applied prior
to the Termination Date;

3.1.4.                     £30,000 in compensation for loss of office and the
termination of the Employment due to redundancy within 14 days of the
Termination Date.  The Company will issue your form P45 before making payment. 
This payment will be paid without deduction of income tax in accordance with
section 403 of the Income Tax (Earnings and Pensions) Act 2003.

3.2.                    The payments referred to in Clauses 3.1.1 to 3.1.2 above
shall be subject to PAYE Deductions.

3.3.                    You agree that you are solely responsible for and fully
and effectively indemnify the Company and all Group Companies against any demand
for tax and employee national insurance contributions (whether payable in the
United Kingdom or elsewhere) arising out of or in connection with any liability
to pay (or deduct) tax or national insurance contributions in respect of the
payments and benefits set out in this Agreement, together with any interest,
penalties, reasonable costs, damages or

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expenses which the Company or any other Group Company may incur in connection
with such a demand, provided always that you shall have an opportunity to make
reasonable representations to the HM Revenue and Customs before the Company
makes payment against any demand. This indemnity does not apply to PAYE
Deductions deducted by the Company.

4                  Pension and Other Benefits

4.1.                    Your entitlements to any benefits not provided for in
this Agreement cease with effect from the Termination Date.

4.2.                    You will receive a statement of your entitlements under
the Pension Scheme and the available options for dealing with those
entitlements.

4.3.                    It is agreed that neither the Company nor any other
Group Company shall have any liability to you for any act, omission or default
of any of the insurers or providers of any of benefits provided to you.

5                  References and Statements

The Parties have agreed to the internal and external announcement at Appendix 3.
The Parties agree that subject to legal obligations or as selectively required
during negotiations to sell the ClearLab business to third parties, any other
statements (made to third parties, the business press, customers, press and
employees) shall be consistent with Appendix 3.

6                  Company Property

6.1.                    You undertake that on or before Completion you will
return to Nick Williams at the Company in good condition and without
modification all property belonging to the Company or any other Group Company
which is or has been in your possession, custody or control, except as otherwise
agreed in this Agreement.

6.2.                    To avoid doubt, the property to be returned shall
include: all confidential information, documents, books, manuals, records,
surveys, diagrams, specifications, plans, memos, reports, minutes,
correspondence, files, emails, papers, customer documentation, samples, computer
print-outs, mobile telephones, software, computers, computer discs or any other
medium for storing information, laptops, any other type of electronic equipment,
materials, credit or charge cards, keys and security access cards, passwords and
access codes of any description, and all other property of or relating to the
business or affairs of the Company or any other Group Company or any of their
officers, employees, workers, clients, customers, suppliers or agents.

6.3.                    Your obligations under this Clause include the return of
all copies, drafts, reproductions, notes, extracts or summaries of the items
listed above howsoever made and in all existing formats.  You shall if requested
by the Company confirm your compliance with your obligations under this Clause
in writing.

7                  Warranties and Undertakings

7.1.                    You warrant that there are no sums or loans outstanding
from you to the Company or any other Group Company and there is no fact or
circumstance under which any payment is due or could become due from the Company
or any other Group Company to you other than under the terms of this Agreement.

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7.2.                    You warrant that you have not committed any breach of
any duty, including fiduciary duty, in relation to the Company or any other
Group Company and that as at the date of Completion you are not aware of any
such breach by any director or employee of the Company or any other Group
Company.

7.3.                    You undertake that on signing this Agreement you will
immediately tender your resignation from all directorships and other offices
which you hold with the Company and all Group Companies and on Completion
deliver to the Company a letter in the form set out in Appendix 2.  You also
undertake to execute all documents (in such form as the Company requests) and to
do all such acts and things as may be necessary to give effect to such
resignation(s).

7.4.                    The Company confirms that you remain covered under its
Director’s and Officers liability insurance on the same basis as immediately
prior to the Termination Date.

8                  Restrictions

8.1.                    In consideration of a payment of £1,000 (subject to PAYE
Deductions) by the Company, you undertake to the Company that:

8.1.1.                     the obligations which apply after the termination of
employment in Clauses 5 and 6 of the Contract will continue to have full force
and effect and you undertake to comply with them following the Termination Date;

8.1.2.                     you will keep confidential the terms of this
Agreement and the circumstances giving rise to it, other than in confidence to
your immediate family and professional advisors and except so far as disclosure
may be required by any Court or other competent authority;

8.1.3.                     except in compliance with an Order of a Court of
competent jurisdiction you will not assist in any manner at all any person or
entity to make or continue any claim (including legal proceedings) against any
Protected Person;

8.1.4.                     you will not without the prior written consent of the
Company directly or indirectly i) do or omit to do anything; or ii) make or
cause to be made (through any act or omission) any comment or statement
concerning your Employment, its termination or otherwise; which might reasonably
be expected to have a negative or detrimental effect on the commercial
objectives of the Company or any Group Company, any business products or
services of the Company or any other Group Company or the reputation of any
Protected Person.  To avoid doubt this restriction shall also apply to comments
and statements made in or to the press and all other media (including internet),
whether or not intended for publication or broadcast.

8.1.5.                     you continue to owe a duty of confidentiality to the
Company and you shall not after the Termination Date use or disclose or
negligently permit disclosure of any trade secret or confidential information
concerning the business, finances, dealings, transactions, affairs, or any trade
or secret process of any Protected Person which has come to your attention
during your Employment, to any person or entity save (i) as may be required by
law or by any regulatory body; or (ii) as such information may be in the public
domain (otherwise than by your default); or (iii) to your professional advisers
to the extent required to receive professional advice, and you shall use your
reasonable endeavours to prevent such use or disclosure or (iv) to any private
equity houses, VCs or brokers with whom you are required or directed by the
Company to discuss in confidence the possibility of purchasing the Clear Lab
assets;

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8.1.6.                     To avoid doubt and without prejudice to the
generality of this Clause 8, the following is a non-exhaustive list of matters
which are considered confidential and must be treated as such by you:

(a)           non public financial data e.g. management accounts;

(b)                                 information which has been supplied to you
in confidence during and in connection with your Employment;

(c)                                  information which has been supplied to the
Company or any other Group Company in confidence;

(d)                                 information relating to the commercial
activities of the Company or any other Group Company (regardless of its format)
specifically that relating to the development and technical aspects of the
products and services of the Company or any other Group Company;

(e)                                  information concerning all aspects of the
engagement, employment and termination of personnel;

(f)                                    information concerning any litigation
proposed, in progress or settled; and

(g)                                 information regarding the actual or proposed
sale of the Clearlab business and / or any of its assets or IPR’s, and any
connected plans, strategies, proposals, advices or other information or item(s)
which should otherwise be reasonably regarded as possessing a quality of
confidence or as having commercial value or use in relation to the business
activities of the Company or any Group Company;

8.1.7.                     the provisions of Clauses 7 and 8 of the Contract
shall no longer apply but you instead undertake that you will not in any
Relevant Capacity except with the prior written consent of the Company (save as
the beneficial owner of shares or other securities of a body corporate whose
shares are quoted on a recognized Stock Exchange and which when aggregated with
shares or securities beneficially owned by your spouse/partner and/or children,
total no more than one per cent of any single class of shares or securities in
such body corporate) do the following:

(a)                                  for twelve months from the Termination
Date, 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 within any geographical area (i) in which the
Company manufactures, sells or offers or promotes for sale any of the Company’s
products and (ii) with which you have had material involvement during the
Relevant Period or about which activities you come into contact with
confidential information during the Employment.  To avoid doubt, Menicon is
regarded as a competitor of the Company for these purposes and the Company will
only give consent in relation to Menicon if it successfully acquires the
Clearlab business to the Company’s total satisfaction and if the Company is
totally satisfied with your involvement, cooperation, assistance and integrity
in relation to such sale; or

(b)                                 for  12 months following the Termination
Date, directly or indirectly through another entity (i) solicit, interfere with
or endeavour to entice away from employment or engagement with the Company or
any other Group Company (or procure or assist the solicitation, interference
with or enticement of) any Employee, or do any act whereby such Employee is
encouraged to terminate

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their employment or engagement, with the Company or any other Group Company,
whether or not such person would by reason of terminating their service with the
Company or that other Group Company commit a breach of his contract or
employment or engagement or (ii) induce or attempt to induce any customer,
supplier, licensee, licensor, franchisee or other business relation of the
Company or any Group Company to cease doing business with the Company or such
Group Company or in any way interfere with the relationship between any such
customer, supplier, licensee, licensor, franchisee or other business relation
and the Company or any Group Company (including, without limitation, making any
negative statements or communications about the Company or any Group Company) in
a way that does or may reasonably be expected to damage such relationship with
the Company or any Group Company or cause any financial loss.

For the purpose of this Clause 8.1.7:

Employee means any employee, director, consultant or independent contractor of
the Company or any other Group Company at the Termination Date or who was such
an employee, director, consultant or independent contractor at any time in the
Relevant Period and in each case who worked, or provided services as a
contractor or consultant, in a senior executive, managerial, sales, marketing,
technical or commercial capacity or who has or had during the Relevant Period
information relating to the business of the Company or any other Group Company
or contact with any Customer, and with whom you had material dealings in the
performance of your duties during the Relevant Period;

Relevant Capacity means either alone or jointly with another or others, whether
as principal, agent, consultant, director, partner, shareholder, independent
contractor, employee or in any other capacity, whether directly or indirectly,
through any other person, firm or company, and whether for your own benefit or
that of others; and

Relevant Period means the period of 12 months preceding the Termination Date.

9                  Settlement

9.1.                    You accept the payments to you and the performance of
the obligations set out above in full and final settlement of the Specific
Claims and all and any claims or rights of action you may have now or may have
in the future against the Company, all and any Group Companies and any Protected
Person (however arising) in connection with or arising from your Employment and
its termination, the holding and/or loss of any office, or any other related or
connected matter, including any claims arising out of or in connection with the
Stock Option Agreements and including without limitation any claims that you may
have in any jurisdiction in the world under statute, contract, common law or
European law including in particular any such claims that you are not aware of
and/or could not be aware of at Completion.

9.2.                    This Agreement shall not prevent you issuing High Court
or County Court proceedings in respect of accrued pension rights or any personal
injury of which you are not aware or could not reasonably have been aware at
Completion, but it shall prevent you issuing proceedings in respect of such
matters in an Employment Tribunal.  You warrant that as at Completion you are
not aware of any circumstances that might give rise to any personal injury claim
against any Protected Person.

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9.3.                    This Agreement is in particular (but without limitation)
intended to address the Specific Claims.  It is agreed that you have notified
the following possible claims to the Company:

·              Unfair dismissal;

·              Automatically unfair dismissal;

·              Breach of contract;

·              Unlawful deductions from wages;

·              Whistleblowing.

9.4.                    You warrant that having made all reasonable enquiries
you are not aware of any other claim or grounds for a claim against the Company
or any other Protected Person in relation to any matters (howsoever arising)
other than the Specific Claims and the claims notified by you to the Company.

9.5.                    It is agreed that the Compromise Agreement Conditions
will be satisfied on Completion.

9.6.                    The Termination Payment and the benefits referred to in
this Agreement excluding any payment for the Restrictions in Clause 8 above are
made on condition that (i) you have not as at Completion received any approach
that may lead to Work, received or accepted any offer of Work or commenced Work;
(ii) you have not withheld or failed to disclose any breach of the Contract
(express or implied) or any material fact concerning the performance of your
duties regarding the Company or any other Group Company; (iii) you do not
initiate or continue any legal complaint, process or claim against any Protected
Person in connection with your Employment or the matters settled by this
Agreement other than to enforce the terms of this Agreement or any agreements
entered into with the Company after the date of this Agreement; and (iv) you are
not in breach of any of your material obligations under this Agreement or any
warranty given by you in this Agreement (including without limitation Clause
8.1.5 above) and you do not in future breach any such material obligation or
warranty which is intended to apply after the Termination Date or Completion.

9.7.                    If you breach any of the conditions in Clause 9.6 above
then the Company: (i) may terminate this agreement forthwith; (ii) will have no
obligation to pay any sums or benefits due under this Agreement but not yet paid
as at the date of the breach; and (iii) shall be entitled to demand immediate
repayment of all or any part of any sum or benefit given to you in connection
with this Agreement (whether or not it was otherwise due under the Contract) as
may be appropriate in the circumstances.  To avoid doubt, this Clause shall not
prejudice the Company’s right to take action against you in connection with any
breach of this Agreement giving rise to any further remedy (including but not
limited to a claim in damages) or any right to claim additional sums from you
and it shall not apply where it is necessary for you to initiate a legal process
or claim against the Company in relation to the enforcement of this Agreement or
against an appropriate Protected Person in relation to personal injury or
accrued pension rights.

9.8                     You agree that the Termination Payment includes any sum
which might have been payable in respect of any sum which might have been
payable in respect of contractual damages, the basic award and the compensatory
award and any injury to feelings award and that if you are found to be entitled
to any award or compensation in relation to any of the Specific Claims, that it
would not be just or equitable for a Court or Employment Tribunal to grant any
further award or compensation to you in respect of any/or all of the

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Specific Claims and that the Tribunal or Court should set off against any award
or compensation all payments or benefits made by the Company under this
Agreement

10            Legal Advice

10.1.            You warrant and confirm that you have received independent
legal advice as to the terms and effect of this Agreement and in particular your
ability to pursue the Specific Claims, from a relevant independent adviser,
namely Howard Hymanson   of Tarlo Lyons (the “Adviser”) who is a solicitor of
the Supreme Court, holding a current practising certificate and whose firm has
in place a contract of insurance or an indemnity provided for numbers of a
professional body covering the risk of a claim by you in respect of any loss
arising in consequence of such advice.

10.2.            You represent and warrant that:

10.2.1.               you have instructed the Adviser to advise whether you have
or may have any claims, including statutory claims, against the Company arising
out of or in connection with your employment or its termination;

10.2.2.               you provided the Adviser with all available information
which the Adviser required or may have required in order to advise whether you
have any such claims; and

10.2.3.               the Adviser has advised you that on the basis of the
information made available by you, your only claims or particular complaints
against the Company are the potential claims listed in Clause 9.3 above, and
that you have no other claim of any type against the Company or any Group
Company.

10.3.            The Company will pay up to the sum of £2,000 plus VAT as a
contribution towards your legal costs incurred for advice received from the
Adviser in respect of this Agreement.  Payment will be made directly to the
Adviser’s firm upon receipt by the Company of a copy invoice addressed to you
and marked payable by the Company for the appropriate amount, showing VAT
separately.

10.4.            You will procure that the Adviser completes the Adviser’s
Certificate at Appendix 1 to this Agreement.

11            Third Parties

11.1.              The Contracts (Rights of Third Parties) Act 1999 shall apply
to this Agreement to the extent (but no more) as set out in this clause.  Any
Third Party shall be entitled to enforce the benefits conferred on it by clauses
6, 7, 8, or 9 of this Agreement.  The consent of a Third Party shall not be
required for the variation or termination of this Agreement, even if that
variation or termination affects the benefits conferred on any Third Party.  For
the purposes of this Agreement Third Party shall mean any Group Company or any
officer, partner, employee or agent of the Company or any Group Company.

12            Miscellaneous

12.1.              This Agreement is in substitution for all previous agreements
or arrangements relating to your employment (whether written, oral or implied)
all of which shall be deemed to have been terminated by mutual consent as from
Completion.

12.2.              You acknowledge that you have not relied on any
representation or undertaking by the Company (whether written or oral) in
entering into this Agreement, except as expressly incorporated in this
Agreement.

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12.3.              This Agreement and any agreement concluded in relation to it
are to be construed in accordance with and subject to English Law.  The
proposals contained in it are made without any admission of liability. Any
dispute regarding this Agreement shall be subject to the exclusive jurisdiction
of the Courts of England and Wales.

12.4.              References in this Agreement to any statute or statutory
provision includes a reference to that statute or statutory provision as from
time to time amended extended or re-enacted.

12.5.              This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.  This Agreement shall be binding upon receipt by you
and the Company of facsimile signatures.

13            Restricted Stock Agreement

13.1                           You agree that upon Completion, the Restricted
Stock Agreement dated March 27 2006 (“Stock Agreement”) will terminate and you
will have no further rights under that Stock Agreement.  In consideration for
forfeiting and waiving all of your rights under the Stock Agreement you will be
granted 25,000 shares of the Company’s common stock, par value $0.1 per share
(“the Shares”).  This grant is expressly subject to each of the following
vesting restrictions set forth in this Clause 13:

13.1.1                  The Shares will vest only if you comply with all terms
of this Agreement and co-operate to the Company’s complete satisfaction (such
assessment to be made reasonably) with its management team and advisors and any
other relevant third party in providing such reasonable assistance as the
Company may request to support any transaction or transactions to which the
Company or any Group Company is a party.

13.1.2                  The Shares will vest only upon the occurrence of the
events set forth in subparagraph 13.1.2.1 or subparagraph 13.1.2.2:

13.1.2.1                                                         one-third of
the Shares will vest if the Company enters into an agreement, arrangement, or
understanding with an Unrelated Entity pursuant to which the Company’s “flat
pack” technology is sold, licensed, or transferred to that Unrelated Entity and
such transaction closes;

one-third of the Shares will vest if there is a Change in Control of the
ClearLab Group without the Company’s “flat pack” technology being sold,
licensed, or transferred to an Unrelated Entity;

one-third of the Shares will vest on 20 November 2007;

or

13.1.2.2                                                         two-thirds of
the Shares will vest if the Company enters into an agreement, arrangement, or
understanding with an Unrelated Entity pursuant to which the Company’s “flat
pack” technology is sold, licensed, or transferred to that Unrelated Entity,
such transaction closes,  and there is a Change in Control of the ClearLab
Group;

one-third of the Shares will vest on 20 November 2007.

 

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13.1.2.3                   for purposes of this Clause 13, a “Change in Control”
means the occurrence of any of the following: (i) the sale of all or
substantially all of the assets of the ClearLab Group, to an Unrelated Entity;
(ii) the sale of all of the outstanding voting securities of an entity holding
all or substantially all of the assets of the ClearLab Group, to an Unrelated
Entity; or (iii) the merger or consolidation of the ClearLab Group, into an
Unrelated Entity;

13.1.2.4                   for purposes of this Clause 13, the “ClearLab Group”
means each of the following entities collectively: (i) ClearLab International
Pte Ltd, a wholly-owned subsidiary of the Company organized in Singapore; (ii)
ClearLab Europe Ltd., a wholly-owned subsidiary of the Company organized in the
United Kingdom; and (iii) ClearLab UK Limited, a wholly-owned subsidiary of the
company organized in the United Kingdom.

13.1.2.5                   for purposes of this Clause 13, an “Unrelated Entity”
shall mean an entity, 50% or more of which is not owned, directly or indirectly,
by the Company, any subsidiary, the existing stockholders of the Company in
approximately the same proportion as before the transaction, or any employee
benefit plan sponsored or maintained by the Company or any subsidiary (including
any trustee of such plan acting as trustee) provided, however, that no entity
shall be an Unrelated Entity if Jonathan C. Coon (including any “person”
controlled by Jonathan C. Coon (as defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended)) owns more than 10% of such entity.

13.2                           If neither Clause 13.1.2.1 nor Clause 13.1.2.2
has been satisfied by December 31, 2007, then none of the Shares shall vest
under any circumstances other than for the one-third that will vest on November
20, 2007 as set out in either Clause 13.1.2.1 or 13.1.2.2.

13.3                           To the extent required by law, the par value of
$0.1 per Share shall be paid by you to the Company in cash or by check.

13.4                           You agree to execute a Restricted Stock Agreement
which the Company shall provide to you, which shall be in substantially the same
form as the Restricted Stock Agreement dated March 27, 2006 between you and the
Company and which shall document the understanding set forth above.

14                                    Completion

14.1               The “without prejudice and subject to contract” nature of
this Agreement shall cease, and the Agreement shall become an open and binding
document on Completion. Should this not occur by 5.30 pm on Monday 20 November
2006, this offer shall lapse.

15                                    Definitions

15.1               In this Agreement the following terms have the following
meanings:

Board

 

means the Board of Directors of the Company or any other Group Company, as
appropriate;

 

 

 

Contract

 

means the contract under which you were employed by the Company and/or any other
Group Company, evidenced (in whole or

 

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 in part) by the Agreement dated 1 December 2002 (as amended);

 

 

 

Completion

 

occurs when the Company or its representative receives both this Agreement
properly executed by, or on behalf of, you and the Adviser’s Certificate
executed by the Adviser;

 

 

 

Compromise Agreement

 

means the conditions regulating compromise agreements in connection with the
Specific Claims, including in particular those contained in:

Conditions

 

 

 

 

1)

Section 203(3) Employment Rights Act 1996;

 

 

 

 

 

 

2)

Section 77(4A) Sex Discrimination Act 1975;

 

 

 

 

 

 

3)

Section 72(4A) Race Relations Act 1976;

 

 

 

 

 

 

4)

Section 288 Trade Unions and Labour Relations (Consolidation) Act 1992;

 

 

 

 

 

 

5)

Schedule 3A Disability Discrimination Act 1995;

 

 

 

 

 

 

6)

Regulation 35 Working Time Regulations 1998;

 

 

 

 

 

 

7)

Part 1, Schedule 4 Employment Equality (Religion Or Belief) Regulations 2003;

 

 

 

 

 

 

8)

Part 1, Schedule 4 Employment Equality (Sexual Orientation) Regulations 2003;

 

 

 

 

 

 

9)

Section 49 National Minimum Wage Act 1998;

 

 

 

 

 

 

10)

Regulation 41 Transnational Information and Consultation of Employees
Regulations 1999;

 

 

 

 

 

 

11)

Regulation 40 Information and Consultation of Employees Regulations 2004;

 

 

 

 

 

 

12)

Part 1 Schedule 5 Employment Equality (Age) Regulations 2006,

 

 

 

 

 

as such legislation has been or is amended, extended or re-enacted from time to
time;

 

 

 

Employment

 

means your employment with the Company and/or any other Group Company;

 

 

 

Group Company / Group Companies

 

means the Company, any subsidiary of the Company, any holding company of the
Company and any subsidiary of each such holding company from time to time. A
“subsidiary” or “holding company” is to be construed in accordance with sections
736 and 736A of the Companies Act 1985 as repealed and re-enacted, or as
modified by all other statutes or subordinate legislation concerning companies;

 

 

 

PAYE Deductions

 

means deductions made to comply with Part 11 Income Tax (Earnings and Pensions)
Act 2003 and any obligations to deduct employee National Insurance contributions
together with any other

 

12

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deductions which the Company is required by law to make;

 

 

 

Pension Scheme

 

Means your personal pension with Skandia UK;

 

 

 

Protected Person

 

means the Company, any Group Company and their respective shareholders,
officers, employees, workers and agents;

 

 

 

Specific Claims

 

means any allegation or claim against the Company, any Group Company or any
other Protected Person in connection with any of the following:

 

 

 

 

 

1)

unfair dismissal (including automatic unfair dismissal);

 

 

 

 

 

 

2)

pay in lieu of notice or damages for termination of employment without notice;

 

 

 

 

 

 

3)

any redundancy payment whether statutory or enhanced;

 

 

 

 

 

 

4)

any breach of contract including, but not limited to, any claim in respect of
any share options or any other bonus or commission schemes you participated in
during your Employment;

 

 

 

 

 

 

5)

any unlawful deductions from “wages” (as defined by section 27 Employment Rights
Act 1996) including unpaid holiday pay and/or unpaid sick pay, maternity pay
(statutory or otherwise), bonus or commission;

 

 

 

 

 

 

6)

unlawful race discrimination, victimisation or harassment under the Race
Relations Act 1976;

 

 

 

 

 

 

7)

unlawful sex discrimination, victimisation or harassment under the Sex
Discrimination Act 1975;

 

 

 

 

 

 

8)

any other rights arising under Parts VI, VII and VIII Employment Rights Act
1996, including but not limited to suspension from work, time off work, adoption
leave, paternity leave and flexible working;

 

 

 

 

 

 

9)

unlawful disability discrimination or victimisation under the Disability
Discrimination Act 1995;

 

 

 

 

 

 

10)

any claims under the Employment Equality (Religion or Belief) Regulations 2003;

 

 

 

 

 

 

11)

any claims under the Employment Equality (Sexual Orientation) Regulations 2003;

 

 

 

 

 

 

12)

any claims under the Employment Equality (Age) Regulations 2006;

 

 

 

 

 

 

13)

any claim regarding less favourable treatment or detriment under the Part-time
Workers (Prevention of Less Favourable

 

13

--------------------------------------------------------------------------------

 

 

 

Treatment) Regulations 2000 or the Fixed-Term Employees (Regulations) 2002;

 

 

 

 

 

 

14)

any claim for equal pay under the Equal Pay Act 1970;

 

 

 

 

 

 

15)

breaches of the Working Time Regulations 1998;

 

 

 

 

 

 

16)

breaches of the National Minimum Wage Act 1998;

 

 

 

 

 

 

17)

protected disclosures and/or any claim arising under Part IV A Employment Rights
Act 1996;

 

 

 

 

 

 

18)

any act constituting a detriment in employment under Part V Employment Rights
Act 1996;

 

 

 

 

 

 

19)

any liability arising in relation to statutory minimum procedures under the
Employment Act 2002 and/or the Employment Act 2002 (Dispute Resolution
Regulations) 2004;

 

 

 

 

 

 

20)

any failure to consult trade unions or employee representatives in relation to
the transfer of an undertaking;

 

 

 

 

 

 

21)

any claims under the Information and Consultation of Employees Regulations 2004;

 

 

 

 

 

 

22)

any claim relating to time off or detriment in relation to European Works
Councils arising under the Transnational Information and Consultation of
Employees Regulations 1999;

 

 

 

 

 

 

23)

any other claim arising under or by virtue of the Employment Rights Act 1996 or
the Employment Relations Act 1998;

 

 

 

 

 

 

24)

claims under the Trade Union and Labour Relations (Consolidation) Act 1992;

 

 

 

 

 

 

25)

claims under the European Public Limited-Liability Company Regulations 2004;

 

 

 

 

 

 

26)

tort or breach of statutory duty;

 

 

 

 

 

 

27)

any other claims at common law.

 

 

 

Stock Option Agreements

 

means the Stock Option Agreements entered into between you and the Company and
dated 1 December 2002 and 13 February 2004 and the Restricted Stock Agreement
entered into between you and the Company and dated 27 March 2006;

 

 

 

Work

 

means any employment, contract for services and/or any activity undertaken by
you with a view to financial reward for a competitor of the Company or any Group
Company or in a business that competes or intends to compete with the Company or
any Group Company.

 

 

14

--------------------------------------------------------------------------------

 

Signed

 

 

 

 

 

For and on behalf of the Company

 

 

 

 

 

 

Dated

 

 

 

 

 

 

 

 

 

 

 

 

Signed

 

 

 

 

 

Graham David Mullis

 

 

 

 

 

 

Dated

 

 

 

 

15

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APPENDIX 1

 

Certificate of Relevant Independent Adviser

Graham David Mullis (the Employee)

We refer to this Agreement between our client (the Employee) and the Company. We
now warrant and confirm that:

1.               our client has received independent legal advice from [Howard
Hymanson of Tarlo Lyons] (the Adviser) as to the terms and effect of the
Agreement in accordance with the Compromise Agreement Conditions (as defined)
and in particular the effect of the Agreement on his ability to pursue his
rights before an Employment Tribunal;

2.               the Adviser has advised the Employee in respect of all of the
claims and prospective proceedings that he has or may have against the Company,
all Group Companies and any other Protected Person (as defined in this
Agreement) out of or in connection with the Employment or its termination;

3.               the Adviser is a Solicitor of the Supreme Court holding a
current practising certificate and that there is in place professional indemnity
or insurance cover in respect of the risk of a claim by the Employee in respect
of loss arising in consequence of the advice given by the Adviser;

4.               we are not employed by or acting in this matter for the Company
or any other Group Company (as defined); and

5.               with effect from the date of this letter, the Compromise
Agreement Conditions (as defined) are satisfied.

Signed:

Name of Adviser: Howard Hymasnon

Firm: Tarlo Lyons

Address: 33 Watchmaker Court, EC1M 4DB

Date:

16

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APPENDIX 2

Resignation Letter

[If an officer of multiple companies]

STRICTLY PRIVATE & CONFIDENTIAL

The Board of Directors

[Company Name]

[Company Address]

[Date]

Dear Sirs

Resignation from Directorships and Other Offices

I write to confirm my resignation, with immediate effect from the date of this
letter, from all directorships and other offices which I hold [within the [NAME]
group of companies], including (without limitation) the following:

[Insert Company Name]

[Insert Group Companies]

and I instruct and irrevocably authorise you, as my agent, to convey and effect
such resignations to each of the relevant companies, by sending a copy of this
letter to the respective Boards of Directors.

I further confirm that I have no cause of action against the Company or any
Group Companies (as defined in Clause [15] of my Compromise Agreement dated
[date]) and hereby waive all and any such claims against it or them, arising
from or connected with the above resignation[s].

Yours faithfully

[Name]

17

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APPENDIX 3

Agreed Internal and External Announcement

External Annoucement:

Release Date:  20 November 2006

“1-800 CONTACTS, with the assistance of its investment banking advisor,
Sonenshine Partners, has completed the first round of its strategic review of
ClearLab. In the last 90 days, the Company has met with numerous third parties
who have expressed interest in AquaSoft Singles and other technology developed
by ClearLab. Based on these discussions, the Company is now committed to a
separation of ClearLab from its U.S. retail business and expects to announce
terms by the end of March 2007.

The Company has also completed over the last several months an extensive review
of ClearLab’s manufacturing operations. Subject to any consultation that may be
necessary under United Kingdom law, the Company is evaluating a consolidation of
ClearLab’s manufacturing, research and development operations which are
currently carried out in the Singapore and United Kingdom manufacturing
facilities.

As part of this potential consolidation, ClearLab’s UK-based President, Graham
Mullis, will not remain with the business. Mr. Mullis will depart from the
Company this month, and Darren Hall, the current head of ClearLab’s Singapore
operations will be promoted to Managing Director of ClearLab to assume his
responsibilities.

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